Why CEOs Must Handle Any Crisis With Empathy

In a world closely bound by the internet and assessed every moment by social media, information goes viral like wildfire. Brands, thus, can’t afford to be apathetic or bury their heads in the sand in the face of a crisis. However a recent unfortunate incident of tech start-up Better.com’s CEO terminating 900 of its employees over a 3 minute zoom call moves the spotlight on the fact that Empathy as a key element of leadership is still overlooked in the corporate world.

“If you’re on this call, you are part of the unlucky group that is being laid off,” said the mortgage company CEO as he delivered the news. (mark the tone of the message!)

Needless to say CEO Vishal Garg’s brutal message continues to spiral and sparked intense debate on the internet last week. While we do not want to get into details of Better.com’s internal communication crisis, this harsh way of dealing with a sensitive issue like layoff surely didn’t go well with industry,  with many wondering: if empathy at all has a place in the world, which is becoming an ever more cruel and lonely place.

The news sent shock waves on the Internet, with many calling the boss insensitive for ‘laying off’ his staff without prior warning just when the holiday season was underway.

In fact when business tycoon and Mahindra and Mahindra boss Anand Mahindra asked Twitterati their honest opinion on whether Garg or any such CEOs can survive after this blunder, most expressed dissident.

Other corporate leaders such as Edelweiss Mutual Fund CEO Radhika Gupta and Chairman of RPG Enterprises Harsh Goenka also expressed their shock on the matter.

Is empathy seriously lacking?

Research has repeatedly pointed to empathy as a key driver for business success. In fact, it is critical to keeping teams and individuals functioning. The pandemic has made this quite clear. The teams which functioned best during the crisis, even though working remotely, were the teams with strong human skills, particularly from the top.

Think of Airbnb’s ‘Kindness card’ campaign, a way to support hosts during the ongoing coronavirus crisis, which ended up receiving a lot of flak. According to USA Today, Airbnb sent out emails to guests asking them to write a digital comment card with an encouraging message to Airbnb hosts, with the option to add a donation. This lack of empathy angered guests during pandemic time.

Also the example of Boeing that hit the headline in 2019 after the tragic loss of 346 lives in the crashes of two of their 737 Max airplanes – one in Indonesia and one in Ethiopia, needs a mention. More than the crisis, what compounded their problem was how the company – with a total lack of empathy – responded during the crisis. The CEO Dennis Muilenburg (who resigned soon after) made matters worse by going on a defensive mode, not admitting the flaws in the software; instead blaming the pilots for not completely certain standard procedure.

However CEOs often have a different idea about workplace empathy than their people, as the findings of Businessolver’s 2020 State of Workplace Empathy Report, notes that less than half (48%) of employees believe companies as a whole are empathetic, versus 91% of CEOs who say their company is empathetic.

Why so? Researchers have often delved on the issue as why CEOs see their companies as quite empathic even though they don’t rate the impact of empathy very highly. Conversely, employees rate empathy highly, although they don’t see it often in the company they work for.

The most likely reason leaders and CEOs neglect empathy is that power changes the brain.

This is called hubris syndrome in which power corrupts the brain’s wiring. In Harvard Business Review, researchers wrote, “It’s not that power makes people want to be less empathetic; it’s that taking on greater responsibilities and pressure can rewire our brains, and, through no fault of our own, force us to stop caring about other people as much as we used to.”

Often, leaders are under immense pressure to produce results. CEOs are answerable to their boards and shareholders, who are interested only in want sustainable results and profits. Under pressure, taking time to be empathic seems to come at the cost of results. It’s hard to see the RoI of empathy.

And just as empathy can’t be quantified, it also cannot be faked, more so, in the face of a crisis.

Empathy in the face of a crisis

We seem to have a natural tendency to avoid planning for crises, as a recent Deloitte survey shows that only 49% of board members say their organizations have crisis scenario playbooks, and just 39% have a plan for addressing reputational risk.

Identifying risk can be anxiety-provoking and may require an internal restructuring of the organization, believe experts, as a research report jointly published by Twitter and Sprinkler notes that companies with high-care scores exhibit Empathy as a key trait, coupled with responding immediately and owing up one’s own mistakes. Brands lacking these aspects are seen as either irresponsible or outright incompetent.

In a post Covid-world however, some see the act of Garg as the new reality of the workplace, especially in the pandemic era. According to an HR head of a mid-sized firm, “With many employees working from home — and with the expectation that many will continue to do so even as we move past the health crisis — companies will likely do much of their firing (and hiring) via video.”

She added that it could be even more awkward to ask remote employees to come in to the office unexpectedly, only to then hit them with a pink slip. Instead, at the moment it indirectly benefits workers to receive the bad news from home – ‘a safer place’, where they can immediately connect with family members and address the situation.

However, messaging tonality can often exacerbate the situation. It is here that Better.com falters because it can be harder to provide such emotional support in a video conference. A possible approach could be for an employer to send a handwritten note of personal thanks and encouragement after the main announcement.

Nonetheless, the Better.com CEO’s situation may have been less about the fact the firings were done via video, and more about the attitude of the company and its CEO, which lacks the aspects of humanity.

In any case, the role of empathy cannot be ignored, more so at a time when are we unanimously experiencing a global pandemic. Of course, leaders and CEOs, particularly those who have held the role for a long time, and achieved success through hard work, and people management know that leadership is not just about systems and processes but also (and most importantly) about people and their needs.

Let’s hope that the New Year finds more C-suite and boardrooms addressing such crisis with greater empathy, honesty and a sincere dedication for the welfare of their stakeholders – both external and internal.