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Rethinking empathy: It’s not about being nice … it’s about driving profit

4 years ago, Posted in Leadership

 

Even before this summer’s expose on Amazon’s workplace culture, Jeff Bezos never exactly had a reputation as a nice guy. Visionary? Yes. Intense? Absolutely. But not the warm-and-fuzzy type, by a longshot.

Yet it’s impossible to argue with the fact that Bezos makes many of his millions of customers very, very happy. Remember online shopping before Amazon? Buggy sites, tiny selection, endless waits. Now, you click and practically anything shows up at your door in a matter of days, if not hours – like clockwork.

And herein lies a key distinction. While Bezos may or may not be Prince Charming, he’s built an empire based on empathy for his customers – and there may be no more important business virtue.

Some people think of empathy as a touchy-feely, soft skill. It’s not. Empathy is a hard business skill that’s absolutely critical to the bottom line. At core, it’s not about being nice. It’s about feeling someone else’s pain. And there’s a big difference between those two things.

Empathy doesn’t just work for Amazon, of course. Progressive companies, almost without exception, are experts at intuiting customers’ discomfort – and then acting on it. Despite its importance, however, there’s still a lot of confusion about what empathy means in business, how to apply it and how to use it to adapt at critical moments.

Feel customers’ pain before they do

Back in 1999, I was a home builder. My clients on a particular project weren’t happy, for good reason. Our supplier couldn’t get their floors in on time – and they were stuck in a hotel waiting for the job to finish.

This was par-for-the-course for the construction industry, but it was still incredibly frustrating. What was missing was a website where you could order construction materials as easily as you buy books or music – then have everything show up at your door, on time. Customers were desperate for it. So why didn’t it exist?

The most successful companies ask this same kind of question, obsessively. Back in the mid 2000s, for instance, Blackberry had a lock on the phone market for business users and was making inroads with consumers. It took a Steve Jobs (yet another empathetic CEO with a reputation for being a jerk) to see what people really needed wasn’t a clunky office gadget with dozens of tiny buttons but a versatile, app-driven iPhone. Jobs’ famous quote – “A lot of times, people don’t know what they want until you show it to them” – is often seen as pure narcissism, but to me it’s the highest expression of empathy: addressing customer needs before they’re even aware of them.

Invest in a cure for your customers, not a Band-Aid 

Just feeling customers’ pain isn’t enough. Too many entrepreneurs get this far only to slap a quick fix on an existing problem – masking the issue but never getting to its root. Real empathy requires going beyond the Band-Aid and investing in an actual cure. The effort is rarely easy, but getting to the core of the problem often yields huge business rewards.

Take another example: Airbnb. Their business idea of offering travelers an alternative to the stuffy hotel experience was a hit from the start. Despite early success though, their model had some serious flaws: namely, it left homeowners in the lurch if their guests trashed the joint (which initially seemed to be happening with alarming frequency).

Airbnb could have simply ignored this problem, or patched it over with a media campaign. Instead, founder Brian Chesky invested in an actual solution. Beginning in 2012, the company started offering a free, $50,000 insurance policy to all hosts (since expanded to a $1,000,000 “peace of mind” guarantee). Investing in this cure was an extraordinarily risky move, putting the company on the hook for all sorts of possible damages. But it turned out to be a turning point: with trust restored, AirBnB has since gone on to radically disrupt the entire hotel industry and is now valued at more than $25 billion.

I’ll be the first to concede, however, that this is easier said than done – real disruption is scary and lonely. We spent a decade and tens of millions of dollars trying to figure out how to actually connect manufacturers and buyers of home building supplies in one website. It would have been far easier to just build an online big box store – throwing the same old inventory online and calling it revolutionary – but that wouldn’t have solved anything.

Empathy never sleeps 

Empathy isn’t merely a foundation to build a business on; it’s also a way to adapt when the market, inevitably, turns. Without it, it’s far too easy to just keep doing what you’re doing – doubling down on what’s bringing in revenue, without asking whether consumer attitudes are silently shifting.

Examples aren’t hard to find, even at once great companies. Kodak threw everything they had into their old medium while the world went digital, and we know how that ended. Blockbuster insisted on renting videos in bricks-and-mortar stores, even though the Internet opened up far more convenient channels for consumers, leaving Netflix to stream away their customers.

Don’t get me wrong: Being nice can be an important virtue in business, too. But real empathy is something different and deeper. Truly acknowledging and addressing someone else’s pains and frustrations is hard. It requires serious investment and a long runway. Not to mention, it’s not just customers that need to be considered, but employees, suppliers and other stakeholders, too (a lesson Amazon could take to heart).

But entrepreneurs who manage to master the art of empathy have an uncanny habit of disrupting the world they live in. When you can step into the customer’s shoes – and see the world from their perspective, not yours – it’s easier to walk miles ahead of the competition.

Follow me @JeffBooth

MaddieDavidson

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