How Leading With Empathy Gives Businesses a Competitive Advantage

Jesus de la Garza, an Entrepreneurs’ Organization (EO) member in Monterrey, Mexico, has served on the EO Global Board of Directors and is an entrepreneur, consultant, global public speaker, and workshop facilitator. He is the founder of Monarch Leaders, a consulting firm specializing in working with organizations to build high-performing teams. We asked de la Garza to share why empathy is a critical skill in leadership.

Empathy is not just a nice-to-have quality in business. It’s a strategic advantage that directly impacts your bottom line. There’s a big debate in the leadership world. Some researchers say leaders should project strength and authority to inspire teams. Others believe in empathetic leadership, where vulnerability and connection take center stage. After decades of working with teams across the globe, I’ve identified three essential questions that help illuminate empathy’s role in business: 

1. Is empathy something we activate, or something we are? 

I believe empathy is something every human has. It’s just a matter of activating it. The word itself comes from the Latin empatar, meaning “tied” or being in the same situation. I think of empathy as being “in-path” with someone—walking alongside them on their journey. 

But there’s a common misconception about empathy. The short definition is “putting myself in your shoes.” What’s missing is the second part: You must also get out of those shoes. If you don’t get out, you’re not being empathetic. You’re being absorbed. True empathy requires both connection and separation. You can connect with another person’s situation, but must maintain enough distance to help you find your own solutions.

2. How does empathy affect business results? 

Recent research confirms what I’ve observed for years. Empathy drives business results. According to Deloitte, organizations where employees perceive empathetic leadership experience a three- to four-fold increase in innovation, engagement, retention, and job satisfaction. 

I work with a client who was a very hands-on leader. Everything needed his approval. We started with what I call a “three-minute delay” approach—waiting three minutes before stepping in to solve problems. We gradually extended it to 15 minutes, then 30, and eventually to three days. His realization? “About 95 percent of situations take care of themselves. I don’t have to be involved.” 

All that time he was spending micromanaging is now invested in planning and growth. His business has expanded because he activated empathy—trusting his team rather than controlling every outcome. 

I’ve also observed the opposite. Another client shows zero empathy at the leadership level. They make their numbers every month and exceed budgets. The problem? People only stay for a year or two. They work intensely, collect their bonuses, and leave. This creates a perpetual cycle of training new people and losing institutional knowledge—profitable in the short term but ultimately unsustainable.

3. What obstacles prevent empathy from flourishing? 

I’ve identified three main obstacles to empathy in business: 

• Rushing
  When you’re pushing to hit end-of-month targets, empathy often goes out the window. You focus on results rather than people. 
• Fixating on the end result
  If you’re overly attached to making your numbers by 5 p.m. on the last day of the month, you’re likely to sacrifice empathy for immediate outcomes. 
• Threatening environments
  When team members believe their bonuses or positions are at risk, defensive behavior takes over. This happens because of what I call “the imaginary monster.” When there’s a lack of information, your brain perceives it as a threat and goes to the worst-case scenario. You feed this imaginary monster with your fears until it seems real, but it’s not. It’s just in your imagination. 

Let me share a real example. Recently, a team member approached me for a difficult conversation about a conflict. She wanted to skip the company retreat for a personal trip with friends. Rather than making it about company policy or my authority, I listened to understand her situation. I put myself in her shoes and tried to see what she was going through. 

I gave her some options and resources, but, most importantly, I trusted her ability to solve her issue. Two days later, she found a solution. She said, “I figured it out. I’m going to the retreat, and I’m going with my friends.” She found a way to do both because I didn’t rush her into an immediate decision. Had I been fixated on an immediate answer, I would have created resentment rather than engagement.

The pilot analogy 

I recently learned something fascinating: Pilots don’t actually land planes. They set the proper conditions for gravity to land them. This perfectly illustrates empathetic leadership. You don’t force results through control. You create conditions where natural forces like creativity and commitment can flourish. You set the groundwork for empathy to take its course.

Start with self-empathy

The biggest challenge with empathy is that you must first be self-empathetic. Before you can truly understand others, you need to understand yourself. Many leaders struggle with this. They’re quick to criticize themselves and hold standards they would never impose on others. But self-compassion isn’t weakness. It’s the foundation that makes empathy with others possible. 

When you practice self-empathy, you develop what I call a “thinking partner” relationship with yourself. You create a seamless connection between all aspects of your life—work, family, personal growth—so you’re not constantly switching between different versions of yourself. 

Start small

Choose one team member or one meeting to practice with. As with any skill, empathy strengthens with use. In the age of AI and automation, empathy becomes even more valuable. While algorithms analyze data, they can’t truly connect with human experience. As technology advances, your ability to understand others will differentiate great businesses from merely successful ones. 

By viewing empathy as a strategic advantage rather than just a personality trait, you transform your leadership approach and create sustainable success that benefits everyone—your team, your customers, and ultimately, your bottom line.

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