James River Capital empathy

2020 has been a year for the record books. In addition to a global pandemic, civil unrest, and financial struggles, workers are more stressed-out than ever before. While business leaders can only do so much, it’s your duty to lead with empathy during hard times.

But what does it mean to be an empathetic leader? How can you become more empathetic to your employees’ needs? This is more than having sympathy, which is just showing concern for someone else. Empathy means you have the ability to put yourself into another person’s shoes and feel what they’re feeling.

In the workplace, empathy matters because it shows you care deeply about your team instead of just viewing them as employees.

According to Paul Saunders, the co-founder of James River Capital, today’s series of crises is a test for management. Hard-line management styles fall flat in the face of a harsh reality where your employees are struggling. Paul shares his thoughts on why leaders need to lean into empathy right now, and five tips to cultivate more empathy—even when the going gets rough.

About James River Capital & Paul Saunders

James River Capital

Along with his business partner, Paul Saunders acquired James River Capital back in 1995. In the 25 years since founding the company, Paul has served as CEO and Chairman of the Richmond, Virginia, company.

Today, Paul puts his 30+ years of experience in finance to work for James River Capital’s products. His goal is to find ways to balance investment portfolios, using alternative investments. James River Capital optimizes these products for both risk and returns.

After being a corporate leader himself for over 25 years at James River Capital, Paul knows how hard it can be to constantly cultivate empathy. While empathy requires daily work, he recommends managers use five tips to be strong, empathetic leaders.

Why do we need empathy at work?

After all, “empathy” sounds like a fluffy, ineffective term. But when implemented with finesse, empathy increases trust, productivity, and even employee morale.

In his experience managing the team at James River Capital, Paul understands that empathy is paramount for creating a corporate identity. It’s important because:

  • Empathy helps struggling employees excel: Understand the root cause behind poor performance. Maybe your employee is struggling to pay bills or is going through a divorce. A dose of understanding can help you improve employee morale and work quality.
  • Empathy engages your workforce: Just 31% of Americans say they’re engaged at work. But companies with engaged workers are 21% more profitable!
  • Empathy reduces employee turnover: Studies show 50% of unengaged workers are looking for new jobs. If you make people feel appreciated, they’re much more likely to stick around.
  • Customers love empathy, too: Empathy doesn’t end with your employees, either. Empathetic leaders create empathetic employees, who boost customer satisfaction and loyalty.

93% of employees say they would stay at their job if they had an empathetic manager. If you’re trying to tackle sticky issues like low morale, high turnover, disengagement, or low productivity, empathy is the key.

5 tips to lead with empathy

Empathy might seem like a fluffy concept, but it has a tangible effect on your bottom line. Being an empathetic leader is challenging, and it takes constant effort. It’s hard to understand employee motivations and feelings, especially if you have a more prescriptive leadership style.

Empathy means putting others ahead of yourself, which is hard when you work in a cutthroat industry. Even then, empathetic leadership is possible. Achieve your organizational goals while boosting employee morale with James River Capital’s five tips.

Practice active listening

Are employees telling you how they feel right now? How are you reacting?

More often than not, managers are busy. You’re probably not attuned to employee emotions, especially with your heavy workload. But when you brush off an employee’s feelings or concerns, you’re telling them, “I don’t care.”

Paul uses active listening when dealing with employees of James River Capital. In his experience, that means:

  • Looking for nonverbal cues: Is your employee saying one thing, but implying another with her body language? They might not feel comfortable saying what they really think, but body language can clue you in on a potential issue.
  • Pay close attention: What words are your employee using? Are they saying they’re frustrated, tired, or confused? Why do they feel that way?
  • Ask clarifying questions: Repeat the employee’s thoughts back to them in your own words. Ask clarifying questions like, “Why do you feel this way?” or “Can you give specific examples?” to help you understand their problem.

The key isn’t to immediately react and go into “fix it” mode. Your goal is to have a real conversation with the employee, and that starts with listening and adjusting to what they’re saying. If you’re planning your next retort while they’re still talking, you aren’t practicing active listening.

Form personal bonds with your team

It’s hard to have empathy for your team if you don’t know your employees. That doesn’t mean you need to know their entire life’s story, but you should understand their background.

You need some kind of bond with an employee to see how they express emotion. This helps you tend to their needs as individuals, rather than how they affect your bottom line.

That might mean:

  • Asking about their personal lives, like their spouse, kids, or pets.
  • Remembering little details about their life, like vacations or personal stories.
  • Showing vulnerability: Share your life with employees. You don’t need to open the floodgates, but share something non-work-related with them, like your hobbies or favorite sports team.
  • Asking open-ended questions: “Was your weekend nice?” isn’t an empathetic question. Instead, ask employees non-invasive, conversation-starting questions. Make it a habit to leave your office and socialize with the team. You’ll learn all kinds of things about your employees while building empathy.

Host team-building activities

When James River Capital holds team-building activities for its employees, it is a morale booster. It’s also a critical way to flex your empathy muscles as a leader. Use fun, engaging team-building activities to strengthen bonds between management and employees.

But remember that team-building can often cross the line from “fun” to “cringe-worthy” quickly. Always make team-building optional and choose inclusive activities that people genuinely enjoy.

See things from their perspective

Empathy is about putting yourself in someone else’s shoes. That means reserving judgment or reacting when an employee comes to you with concerns. Instead of rebutting their concerns, take a timeout.

This employee clearly has a genuine problem. They trust you to address that problem. How would you feel if it were you in their situation? What would you expect your manager to do?

Your perspective isn’t the only one that matters. Turn the tables and see where people are coming from. Take a collaborative approach to find a solution with your employee in the driver’s seat.

Get formal training

It’s really hard to coach yourself to be more empathetic. While all leaders should hone their empathy, sometimes it’s necessary to get outside help.

Online workshops, classes, or even advanced degrees on leadership can be very helpful for the workplace. Not everything will come naturally and seeking knowledge or feedback will help you stay humble and empathetic as a leader.

Being empathetic doesn’t mean you become a mushy pushover. It means you’re accessible, approachable, and action-oriented. You become a manager your employees can trust.

The Bottom Line

Regardless of your job title, we’re all human beings. To that end, we’re emotional creatures. Follow these five tips to lead with empathy, creating a healthier work environment, boosting employee retention, and building a successful organization. It has worked for James River Capital.