The Growing Strategic Relevance of Empathy

Last year, influential organizational culture expert Simon Sinek had an enlightening conversation with an executive whose company had just implemented a state-of-the-art AI customer-service system. For all the slick technological capabilities of the tool, capable of fielding thousands of requests at once and had countless answers at the ready, customers hated it. 

“Instead of digging in their heels, they pivoted,” Sinek said in a LinkedIn video. Specifically, the company shelved the AI tool and began providing more training on emotional intelligence and conflict resolution. Soon after, customer satisfaction scores soared. “It’s easy to feel like we’re living in this technological dominated future, but studies show that human skills like empathy, creativity and communication remain the most important workplace expertise,” Sinek explained. “In the future, the skills that machines can’t replace — our care, our reason and our humanity — will be the keys to success.”

Count Sinek among the growing ranks of seasoned business leaders — including Microsoft CEO Satya Nadella, Chanel Global CEO Leena Nair, and Apple Executive Chairman Tim Cook — who are all-in on empathy.

Yes, empathy. And if the term calls to mind warm-and-fuzzy associations — conflict avoidance perhaps, or of endless conversations about feelings — you might want to update your thinking. “Empathy is simply the capacity to understand another person’s perspective and experience, without confusing it for your own,” says Lobna Chérif, a professor and Chair in Resilience at the Royal Military College of Canada. (Chérif also leads a Queen’s Executive Education course on emotional intelligence for leaders.) “It involves a lot more judgment, and a lot more emotional regulation, than most people assume.”

“Empathy is often misunderstood as being kind, soft, overly compassionate and weak — not the stuff of which business success is made,” notes Julian Barling, a professor and Borden Chair of Leadership at Smith School of Business. “But I think precisely because we’re in an era such as we are right now, empathy has become more important than it has ever been.”

Indeed, empathy is no longer simply a nice-to-have trait that comes in handy sometimes, such as when developing rapport with clients or employees, or when trying to take the edge off awkward interactions. It is becoming a strategic business differentiator.

How empathy enhances leaders

Empathy (along with compassion, a closely related tendency involving concern for the suffering of others) is rarely the first thing organizations look for in hiring and promoting leaders, and few consider it a top criterion for success. That’s due for a change in Barling’s view. “We’re conditioned to see competence as a business issue, but we don’t tend to see compassion as a business issue,” Barling says. “I think that we should acknowledge that compassion is, at least, equally important — and I could probably make the argument for it being more important.”

That’s in large part because, as data and AI reshape workplaces, human empathy is one of the few capabilities that robots can’t replicate. While AI has become quite good at projecting sympathy — often more consistently than humans, who are prone to fatigue and impatience — it is far less adept at the more subtle elements of interpersonal relations, such as reading body language, noting facial expressions and voice, picking up on context clues, and identifying cues that aren’t explicitly communicated. And even if the technology does advance to a point at which those nuances can be algorithmically simulated, research suggests people just don’t trust machine-generated empathy. “AI can generate responses that appear empathic and people may sometimes perceive those responses as compassionate. But producing empathic language is not the same as establishing a genuine human relationship, or assuming the relational and ethical responsibilities of leadership,” Chérif says. “What matters is not simply what is said, but the presence, judgment, accountability and genuine engagement behind it.”

Those emphatically human traits allow leaders to read between the lines. People rarely tell their bosses — or their bots — exactly what they think, especially when they’re not yet sure how they feel. “Empathy can make a leader more attentive to what is being said, what is not being said, and how a decision may be experienced by different people,” Chérif explains. “That improves communication, conflict management, coaching and mentoring.” 

Empathy can also help leaders avoid what Chérif describes as a “very common trap” of assuming that because something makes sense in their own minds, that it is clear to others too. “Empathy interrupts that assumption,” she says. “It creates curiosity. ‘What is it that I am not seeing? What could it look like from another person’s perspective?’”

Notably, empathy does not make leadership any simpler. In fact, taking the time to live in others’ shoes makes the job more complicated, Chérif explains. “Once you understand the impact of your decisions on another person, you cannot pretend that that impact does not exist.” It’s also easy for empathic leaders to veer into what leadership expert and former tech executive Kim Scott has dubbed “ruinous empathy” — that is, avoiding difficult feedback or necessary conversations out of fear of upsetting a colleague. “The goal is not to feel everything that others do, but rather to understand their position enough to respond wisely,” she says. 

In Chérif’s view, the strongest empathic leaders maintain strong boundaries and excel at emotional regulation. “They can hold two things at the same time: ‘I understand what this is like for you,’ and ‘This is still what the situation requires,’” Chérif explains. “The challenge is to combine humanity with standards.”

How empathy benefits teams

Perhaps unsurprisingly, the empathy of leaders can strongly influence the functionality of their teams — especially in times of turbulence and change. “With tariffs and technological advances, we’re now in a situation in which many businesses have to change course from week to week,” Barling says. “In an environment that is inherently uncertain, empathy and clarity become critical.” 

Look to the current attention surrounding AI, which is transforming the way work is done in virtually every industry — and making the ground feel awfully wobbly for a lot of people. Research shows that more workers are worried about AI than are excited by it. Nearly 60 per cent of respondents to a recent survey don’t feel confident their boss has a clear plan for how the technology will affect their jobs. Another recent poll found that 74 per cent of the employed adults surveyed are nervous about becoming too dependent on AI at work — more than those fretting about falling behind. Unaddressed, these concerns can corrode team morale and performance. 

But when leaders broach the matter with compassion and understanding, outlooks and behaviours tend to change. In a 2026 survey of 1,000 U.S. employees in six industries, respondents working for organizations with highly empathetic leadership were notably more likely to say AI makes them optimistic about their future than their contemporaries with less emotionally dialled-in bosses.

“If you look at the long history of technology entering the workplace, it’s clear that humanity is what differentiates adoption in organizations,” Barling explains. “The companies that succeed at implementing AI are going to do so in large part because their leaders understand the fears of the people who currently work there.” 

That can take the form of listening to what employees say, observing how they behave and, importantly, giving them space to table questions and air concerns — even those that challenge organizational doctrine. Several studies have established a link between empathetic behaviour in leaders and increased feelings of psychological safety among their employees.

“Empathy changes the quality of interactions,” Chérif says. When people see — and believe — that a leader will genuinely listen and try to understand before judging, they are most likely to bring forward concerns, admit mistakes, ask for help, challenge ideas and offer different perspectives. They’re more likely to admit, for example, that they haven’t tried the new company-wide AI tool because they’re worried they don’t have the skills to use it properly, or that they’re concerned about being replaced by machines. “If a leader cannot understand why employees are resisting a change, the organization can suffer,” Chérif notes. “Empathic leadership can help foster the psychological safety needed for people to speak honestly, which in turn can build trust and strengthen teams.” 

Not for nothing: Employees who feel their bosses are empathic are reportedly more than four times as likely to innovate, and at least twice as likely to feel engaged in their work, than those with less emotionally-attuned leaders.

How empathy accelerates performance

Human dynamics — with their human emotions — are not the only beneficiaries of empathetic leadership. Both Chérif and Barling attest that there are material — and increasingly relevant — business advantages to be gained as well. “Empathy can improve the quality of information and relationships on which organizational performance depends,” Chérif says. 

That’s because empathetic leaders are better able to parse a) what affected parties are going through, and b) how they might receive what’s taking place. As such, empathic leaders tend to unearth organizational opportunities — and threats — that others miss. Sometimes, this amounts to crisis avoidance: Catching a problematic product update before it’s unleashed on customers, for example, or adjusting payment terms to help an important — and newly tariff-affected — supplier maintain steady operations. Other times, the stakes are considerably higher: Chérif points to military contexts, where failing to pick up on human nuances can jeopardize the efficacy of operations and cost lives. Simply put, human empathy can spot gaps that even the most robust AI model cannot — at least, not yet. “A leader who cannot understand how other people are experiencing the situation is making decisions with missing information,” Chérif says. “Empathy creates the ability to put things fully in perspective.”

This can also serve as a valuable check to make sure companies are proceeding in the right direction — and addressing issues that stakeholders really need. “If an organization does not consider the perspectives of its customers or its team members, it is easy for them to end up solving the wrong problems,” Chérif adds.

Still, for those who adhere to Milton Friedman’s maxim that the business of business is business, encouraging more empathy in the office might be tough to sell — especially as the economy charges towards an increasingly automated future. To that, Barling offers a counter-argument: “The goal is not to take away performance, or to make the workplace ‘soft,’” he reasons. “The goal is to enhance current performance levels by humanizing the workplace as much as we can.”