What a treat it was to be able to spend time this week with Bill Drayton (Ashoka), Carly Fiorina (ex HP) and Julie Rogers (Meyer Foundation) discussing the role of empathy in business, thanks to Arlington Economic Development (the Washington Post published a good summary of the panel yesterday).
At its core, a business is about bringing people and resources together to create value that no single individual can create alone. A good business creates value by making everyone it touches, better off. A good business provides returns to investors, it creates opportunities for people to lead productive lives, and it delivers products that improve customers’ lives, while not creating unfair costs for bystanders. A business that doesn’t reward investors adequately, that treats employees unfairly, that cheats its customers or harms its community is a failure. Empathy is an essential element of business because, without understanding the needs and desires of others, it is impossible to satisfy them.
Unfortunately, much of business education continues to emphasize a different view of business, one where economic actors try to outsmart one another to enrich themselves where boards treat managers as if they were self-serving and opportunistic, where companies leverage their power to extract value from customers and suppliers, erect barriers to competition, or transfer costs (externalities) to others as long as they don’t break the law (or don’t get caught). While many of the tools we teach are useful elements in a manager’s toolkit, the overarching framework that dominates the discourse in many business classes today is not only misguided, it can be harmful.
I look forward to the day when “empathy” is no longer seen as a soft concept but as a core skill for business leadership. Initiatives like George Mason University’s New Century College may help bring “empathy” to the core of a college education.