While it’s true that corporate values are determined by the organizational aspiration, the context in which it operates and what the leaders feel very strongly about, I believe that there’s one value that every single CEO should adopt. This value is very relevant and has universal application across contexts.

Most companies have corporate values. These are principles that guide the behaviour of employees. They spell out the dos and don’ts for employees and how they should behave internally and with external stakeholders such as customers, vendors and others in the community. Globally, many companies are making an effort to embed a values-driven culture. They are spending a lot of money to make employees adopt these values so that it becomes a part of the organizational DNA.

While it’s true that corporate values are determined by the organizational aspiration, the context in which it operates and what the leaders feel very strongly about, I believe that there’s one value that every single CEO should adopt. This value is very relevant and has universal application across contexts.

I believe that empathy is at the centre of everything that gets done in a company.

The value I am talking about is “empathy”. Simply put, it means the ability to think and feel from another person’s point of view. What’s brilliant about empathy is that it includes a wide range of manifestations such as seeing things from others’ perspective, feeling what others are feeling, caring about others and wanting to help them.

So, why do I think companies should establish empathy as a corporate value? It’s because I believe that it is at the centre of everything that gets done in a company. Here’s how.

Empathy for employees

A workplace will be barren if employees believe their leaders treat them like robots. It will be a confluence of disengaged staff waiting to jump ship at the next available opportunity.

Employees want their leaders to feel for them and make efforts to work towards meeting their career aspirations as well as help them when needed. This is only possible when leaders have empathy and can relate to others. In fact, recent research by Development Dimension International found empathy to be the single most important trait which positively impacts a leader’s performance. A leader high in empathy understands others, is genuinely interested in them and gets them involved in organizational processes.

Apple’s iPhone is a great example of a product that was designed with customers’ behaviour in mind. It embedded empathy in product design.

An empathetic leader is non-judgemental and welcomes all views, including those that diverge from his own. He reaches to all for ideas, facilitates collaboration among teams and works with them to achieve the organizational objectives. He also makes sure that employees understand how their contribution impacts the larger purpose of the enterprise. For those who have performance challenges, he coaches them to do better. All these have a positive impact on employee engagement and overall organizational results.

Empathy for customers

Empathy for customers is about being able to understand what they need and how they feel, and then working towards meeting their requirements. This includes how products are designed, how customers experience them and how they are served when in difficulty. Apple’s iPhone is a great example of a product that was designed with customers’ behaviour in mind. It embedded empathy in product design.

Whether you are into financial services or healthcare or selling computers, empathy should be the heart of all customer relationships. This includes responding to customer concerns in an expedient manner and addressing their problems in a timely way. You’ll be much more likely to stick with a bank, for example, if they have efficient and quick processes to deal with lost cards and so on, rather than wasting your time and giving you the run-around.

A lack of empathy is at the root of the emissions scandal at Volkswagen…

Similarly, patients far prefer hospitals where the doctors and nurses follow a culture of empathy. No one likes a doctor who puts on a glum face and fails to appreciate what the patient is going through. Research done by Helen Reiss et al (2011) found physician empathy is an essential attribute of the patient-physician relationship and is associated with better outcomes, greater patient safety and fewer malpractice claims. Apple understands the importance of empathy in customer service and includes it in all training programs for its retail store staff. Not surprisingly customers who visit Apple retail stores like the experience, which bolsters their brand loyalty.

Empathy for other stakeholders

Other stakeholders for an organization include the environment, society, shareholders, regulators, vendors and so on. In all these settings, empathy plays a big role. For example, empathy for the environment is caring about the ecological impact of business practices and acting in accordance. Empathy for regulators is about not looking at them as mere inconveniences. It’s the ability to understand why regulators stipulate what they do. Appreciating things from their point of view can make compliance seem like less of a chore. Empathy with vendors is about understanding their concerns, treating them as extended family and working with them for success of both the parties.

Recent research by Development Dimension International found empathy to be the single most important trait which positively impacts a leader’s performance.

On the flipside, a lack of empathy is at the root of the emissions scandal at Volkswagen wherein the employees believed they could get away with installing software that tricked regulators into believe the vehicles were compliant.

I would like to conclude with research done by UK-based consultancy company Lady Geek, which came up with its Empathy Global Index using data drawn from social medial interactions, CEOs’ approval rating among staff, ratio of women to men, frequency of complaints, ethical lapses, fines etc. In their last report published in November 2015, top performing companies on the empathy index included Microsoft, Facebook, Tesla Motors, Alphabet (Google) and P&G. Writing in Harvard Business Review, Belinda Parmar of Lady Geek said: “Their market capitalization has grown this year by 23.3% compared to a weighted average of 5.2% of all the companies in the index.”

This also establishes the impact of empathy on business. While, these top companies may not have empathy enshrined as a corporate value, I would urge CEOs to go ahead and do just that in order to change the fabric of their enterprise over time.