What is empathetic leadership?

At Connected Accountants, people & wellbeing is a core plank of our strategy. The team here wants to be happy, healthy and to thrive. We also want that positive energy to be felt by our customers and the wider community that we operate within. That’s why we paid close attention to Craig Hudson’s recent talk on empathetic leadership and wellbeing, which was highlight of the Xero on Air series.

The link between wellbeing and leadership

This is an area where Xero really does walk the talk. A few examples are the Xero Assistance Programme (XAP), the work done with The Mental Health Foundation of New Zealand to publish the Small Business Wellbeing Report, and of course their own focus and leadership priority towards these issues.

Craig Hudson is the managing director of Xero NZ and hearing him speak about leadership, mental health, wellbeing, and business in general is always an opportunity to grow. He opens with the question: what would you consider the most important resource in your business? His answer, “the people, always the people’. Below is a summary of Craigs advice around leadership, a few compelling statistics, and some useful tools that Xero has provided for you to use in your business.

What is empathetic leadership?

Craig answers this question “To me empathetic leadership means people feel listened to, they feel valued and they feel like they belong. If we can support our people to feel like this every day when they come to work, then they become more connected to the purpose and their productivity and wellbeing ramps up.”  Starting with a definition of empathy, a leader needs to:

  • Recognise, understand and feel the emotions of other people
  • Respond appropriately to the thoughts and feelings of others.

The point is made that leaders often underestimate how much impact they have on their team’s wellbeing and the knock-on effect that has on their work. According to the small business wellbeing report only 48% of small business employers believe happy thriving staff lead to increased productivity and only third of employers feel their staff would benefit from improved wellbeing.

Supporting the point that there is a disconnect, a recent article by Jennifer Moss for HBR  (Preventing burnout is about empathetic leadership) references a survey of 3900 businesses across 11 nations that discovered “that burnout and fatigue are equally concerning for employees working remotely (43%) and those in a physical workplace (43%). Overall, three in five (59%) employees and business leaders say their organization has taken at least some measures to guard against burnout, though nearly a third (29%) of employees wish organizations would act with more empathy”.

How to evolve into a more empathetic leader

Easier said than done, right? Running a small business is not easy and presents constant challenges. Over time the responsibilities can have a negative impact on the health of business owners (according to Xero, 39% say that this is the case). So, begin by looking after your own wellbeing. Give yourself some empathy and respond by taking the necessary positive actions - “leadership begins with you, so walk the talk”. 

Craig’s talk points out that empathy does not come naturally to everyone. It depends on your upbringing, experience and genes. We can all take the steps to improve by consciously choosing to include empathetic traits in our leadership style. His advice is to begin by being curious and taking the time to get to know and understand a diverse range of people. You can then consider what is driving behaviours, and be attuned to anomalies, changes, shifts in behaviour or mannerisms. Take time to get to know your team, build trust by showing vulnerability yourself, and by showing that you are there to support them.  

Xero has a couple of helpful resources that can help with the journey. These include:

  • The Check In – a five step tool that you can use with your team to improve their experience.
  • Xero Assistance Programme (XAP). For Xero starter, standard or premium subscribers, a free and 100% confidential wellbeing support for anything from work, financial or family challenges to depression, drug & alcohol or social problems. For more information email xap@xero.com

Investment in wellbeing leads to better business

For those that are resistant to these ideas, there is a business case that backs the idea that empathy, wellbeing and business success are not mutually exclusive. The benefits are not only derived by businesses but also cascade into the wider community.

Investment in wellbeing affects the bottom line and adds long term value.  Across multiple research documents completed by the Mental Health Foundation of New Zealand, Southern Cross Healthcare Group, and Deloitte they have outlined the financial impacts that wellbeing has had on both businesses and Aotearoa as a whole.

The 4 key findings include:

  • Every dollar spent on mental health services in New Zealand will repay the nation with $3.50 in productivity gains and other savings.
  • New Zealand lost 6.6 million working days and $1.5 billion due to absence in 2019.
  • Organisations that prioritise employee engagement and wellbeing outperform the industry average by approximately 10% on the Financial Times Stock Exchange 100 Index.
  • A Deloitte study in the UK found mental health awareness and proactive intervention can result in a ROI (Return on Investment) of up to £8.40 for every £1 spent, while reactive support can result in an ROI of up to £5.10 for every £1 spent.

All the above findings point to the fact that both staff and leaders with positive mental health and high wellbeing are in a state in which they are able to realise their own potential, can cope with the normal stresses of life, can work productively and fruitfully, and are able to make positive contributions.

You can read into what wellbeing is for staff and leaders and how to support wellbeing in your small business by downloading the Xero - 2019 Small Business Wellbeing Report.


Walking the walk - what we’re doing about wellbeing

Your people strategy and leadership isn’t a set and forget. It is an ongoing commitment to improve and focus on the wellbeing of your team.   

Our way of committing? We now include a session in our quarterly planning day to focus on improving our communications, ensuring that our values are embedded in what we do, planning time to connect as a team, and understanding the views of our whole team. Recently, this has resulted in our business giving the 4 Day Work Week concept a shot, and in making an investment to equip our team with the technology and the tools that they need to be able to be successful.

Our staff wellbeing has a direct correlation to the output of work and the relationships that they will build with you, our client. We recognise the importance of wellbeing in the workplace and will continue to adapt and improve our strategy on it.

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