When researchers Rasmus Hougaard and Jacqueline Carter looked at the factors that separated exceptional leaders from the pack, one trait stood out above the rest: compassion.
In surveying over 1,000 business leaders across more than 800 organizations, they found that leaders who exhibited (or were perceived by the team to exhibit) high levels of compassion had teams who scored higher on critical performance dynamics within their organizations. Teams led by compassionate leaders exhibited better intra-team collaboration, stronger commitment to the company, and far lower turnover rates than those led by less-compassionate leaders.
When information and direction flows freely across your organization, the business operates at a much higher level of efficiency: fewer conversations, emails, and meetings are required to generate forward progress on initiatives. However, when your company struggles to disseminate information across teams, the resulting friction costs you time and money because of lower productivity.
The study looked at the level of collaboration between team members in different organizations, and found that compassionate leadership was the common thread among companies with high levels of intra-team collaboration. High levels of compassion, the researchers found, inspired higher levels of trust between team members, who were then more likely to share important information with peers both on and off their team.
Does your team believe that you, as the leader, have their best interests in mind? If so, the research tells us that they'll be much more likely to share and collaborate using information that could be perceived as negative. Who wants to be the bearer of bad news in a company where messengers get shot?
The difference between winning and losing in a market can come down to the level of incremental effort your team is willing to give in pursuit of the company's goals. Are you managing a team of people watching the clock, or one that will run through a brick wall for the business?
Here again, researchers have found that compassion is the essential ingredient when fostering strong commitment between employees and employer. When the leader demonstrates empathy, shows situational awareness, and is perceived to act fairly, employees become more committed to the cause and are therefore more apt to go the extra mile when such a moment presents itself.
When the chips are down, will your team do whatever it takes to deliver a win, or will they do just enough to get by? Your ability to build commitment will increase your ability to inspire commitment and earn that incremental effort.
Lower team turnover
It's hard enough to run a business; excessive employee turnover can make it downright disheartening at times. When I see a company with annual turnover rates north of 35 to 40 percent, I immediately know that something is getting in the way of the relationship between the team and the company.
Research on employee tenure and loyalty tells us that when leaders are perceived to have high levels of compassion, their teams are more likely to stay with the company -- 15 percent more likely, in fact. For a 50 employee company, a 15 percent improvement in employee retention can translate to nearly $400,000 in additional profit per year.
Show me somewhere else in your business you're going to find $400,000 in profit improvement? As a leader, making the investment of time and self-reflection to lead with compassion puts money back in your pocket.
Are you a compassionate leader?