Crafting Better Strategy: Why Empathy Matters

Empathy is increasingly a valuable skill for chief strategy officers, notes this opinion piece by Mark Leiter, chairman of Leiter & Company, a consulting and investment firm aiming to raise the performance of business-to-business organizations. He is the author of the book, Crafting Strategy in an Accelerating World. In this opinion piece, he notes that “the effective strategist has a natural platform for encouraging the team to pause, reflect, and step back — even for just a few moments — to consider the broader implications of upcoming decisions.”

Do you ever have days when you are just utterly exhausted by the escalating pace and unpredictability of business? If this sounds familiar, then you have my empathy.

As a member of Strategy 50 — a global community of chief strategy officers — I’ve spent years comparing notes with fellow members on how strategy development is evolving in an accelerating world that is moving forward with far greater velocity and volatility.

Last year, I took these conversations a step further and conducted a research project with the community to examine this topic in more detail. Participating corporations ranged from $2 billion to over $200 billion in revenues. The chief strategy officers addressed issues spanning a wide range of sectors, including industrial glass, power grids and railroads through to automobiles, electronic payments, stock exchanges and open-source software solutions.

One surprising theme emerging from these discussions was the increasing value and importance of empathy to the strategist.

Why is this surprising? Strategists are traditionally hired for their IQ over their EQ. Back in my McKinsey & Company days, when we interviewed prospective consultants we assessed “intellectual horsepower,” “problem-solving skills,” “conceptual thinking,” and “quantitative reasoning skills.” Demonstrated capacity for empathy — the ability to understand what another person is thinking and feeling through their unique frame of reference — wasn’t tested in any interview. I can’t recall a time when it was even discussed.

Life as a chief strategy officer today requires a broader skill set. Executives are pushed and pulled in more directions while facing constantly rising expectations for improving every performance metric that matters.

“Strategists are traditionally hired for their IQ over their EQ.”

“This environment puts enormous pressure on our senior leadership team, such that everyone is always stressed out regardless of our performance,” said one chief strategy officer operating in an iconic company that generated $35 billion in revenues last year. “We are not in huge distress; our business is solid, and our stock is up. But none of that changes the team’s intrinsic stress level.”

As the stress on the team ratchets up, the ability to quickly internalize your colleagues’ mindsets and pressure points has become an essential skill that can play a big role in elevating the strategist’s craft from good to great.

How Challenging Is It on the Front Lines?

Consider Nielsen, where I served as the company’s chief strategy officer. When our current U.S. President proclaims that he is “great for the ratings,” he means the Nielsen TV ratings. While it is the most famous part of the company, Nielsen is much more than TV ratings.

Founded in 1923, Nielsen operates at the epicenter of the global marketing, media and retailing ecosystem. It influences trillions of dollars in consumer consumption and billions in advertising expenditures. During my tenure working with the firm, Nielsen’s enterprise value tripled — from $9 billion to $27 billion. Generating this outcome required navigating massive innovation coming from multiple directions.

A “big data” company long before that term was popular, Nielsen primarily measures market performance for two sectors: media and fast-moving consumer goods (FMCG). The team has been arming domain experts with the latest advances in analytics, algorithms, AI, machine learning and data-as-a-service systems to deliver value to clients. This has required shifts in capital allocation, talent development and go-to-market methods.

Measuring these sectors grows more challenging by the minute. Notably, the media industry landscape — both audio and video — has grown more complex. It now includes such wildly diverse companies as Amazon (via prime video), Apple, CBS, Comcast, Disney, Facebook, Hulu, Netflix, Spotify, Tencent, YouTube and Verizon. The media value chain is in constant flux, spanning content creation through to distribution and consumption. It isn’t any easier analyzing where consumers shop and what they buy in physical and online retailers. We’ve watched disruption on the retail front lines thanks to players that include Alibaba, Amazon, Costco, CVS, eBay, JD.com, Target and Walmart.

The rapid and unstoppable technology and business model innovation across these three domains — information services, media and retailing — is enormously challenging to absorb. I’ve always had empathy for the Nielsen teams as they traversed this terrain. To that end, I would underscore a point made by Eric “Astro” Teller, the “Captain of Moonshots” (CEO) at X, an Alphabet R&D lab, when he said, “although humans and societies have steadily adapted to change, on average the rate of technological change is now accelerating so fast that it has risen above the rate at which most people can absorb all of these changes. Many of us can’t keep pace anymore.” [1]

However, technology isn’t the only major driver of change and innovation. Strategists are concurrently adapting their methods to evolving organizational models that are inherently designed to move business forward with greater speed, precision and agility. At Nielsen, every facet of the company’s operating model was reimagined over the last dozen years in parallel to tackling external and internal technology innovation.

When Strategy Meets Operations

Every company, in its own way, is mixing all of this rapid change — technology, operations, organization — into the corporate blender alongside continuous competitive and customer evolution. To be effective in this context, the strategist must be able to build empathy with colleagues who are trying to juggle their fast-paced, frenzied day job with participation in more reflective and deliberative strategy conversations.

“The ability to quickly internalize your colleagues’ mindsets and pressure points has become an essential skill that can play a big role in elevating the strategist’s craft from good to great.”

This is particularly apparent when strategy meets operations. “To manage complexity on a faster timeline, operators must work in a fully agile, continuous mode,” says Vince McCarthy, group president at Verisk Analytics and previously the company’s head of corporate development and strategy. “They are constantly building momentum by driving multiple commercial initiatives and product innovations while putting out any fires. While they will help co-create new strategic themes and ideas for the company, they aren’t waiting around for a new strategy to shape immediate priorities and decisions.”

Even the military — the historical progenitor for top-down cultures — has shifted to a more agile, adaptive model. This comes in response to a new kind of enemy that is tech-savvy, networked and dispersed, and which has disrupted historical combat norms. “The familiar pursuit of efficiency must change course,” wrote General Stanley McChrystal, former commander of the U.S. Joint Special Operations Command, in the introduction to his book Team of Teams. “Efficiency remains important, but the ability to adapt to complexity and continual change has become an imperative.” [2]

Not surprisingly, operators often get their adrenaline rush from being on the front lines, not being stuck in a room debating strategy. Most companies reward action and outcomes. In a world where every day counts, there is unbelievable pressure to spend every hour accomplishing something that moves the needle in a measurable way.

“The more we re-engineer the enterprise to fluidly adapt to changing conditions, the more the lines blur between strategy and operations,” says Tom Manning, Harvard University fellow and former CEO of Dun & Bradstreet. “In many ways, this is what we desire: an adaptive organization that is continuously changing to seize the day. On the other hand, it dramatically raises the bar for the value the chief strategy officer must deliver to the CEO and the operators to enable their success.”

To be successful in this world, chief strategy officers must be able to quickly understand the needs driving each of the leaders they interact with and to help them access relevant strategies that have been used successfully elsewhere in the organization. This requires a broad skill set.

According to Janine Ames, a leader of Spencer Stuart’s chief strategy officer practice who counsels CEOs and board members, “CEOs increasingly want chief strategy officers who are the full package. Their short hand specification is a mix of strategy consulting and operating experience. The former provides the core training in strategy development over a range of complex problems, while the latter instills an appreciation for what operators face on the front lines. The CEO simply can’t afford to lose momentum with a brilliant, visionary chief strategy officer who lacks sufficient empathy for his or her colleagues.”

Moreover, while the CEO ultimately owns the corporate strategy with the board, he or she is always seeking more leverage. “As the world moves faster and faster, the line outside the CEO’s door gets longer and longer — and their time to deeply reflect and think about strategy gets shorter and shorter,” as one chief strategy officer put it.

In contrast, the chief strategy officer’s mandate includes spending enough time scanning and thinking about what’s possible as well as how to solve some of the toughest problems facing the company. This frees up more time for the CEO and key executives as they work overtime to build confidence with investors, customers and employees.

“While it’s tempting to imagine the answer is to simply think faster, even the smartest minds have their limits.”

A Call for More Empathy

Speed and stress are the natural enemies of thoughtful strategy development. Yet, we can’t make the world simpler, nor slow it down. Each year typically brings only higher performance expectations, changing and conflicting priorities, tighter budgets and a perceived decrease in the available “time to decision.”

While it’s tempting to imagine the answer is to simply think faster, even the smartest minds have their limits. The effective strategist has a natural platform for encouraging the team to pause, reflect, and step back — even for just a few moments — to consider the broader implications of upcoming decisions. Having a shared sense of vision, values, purpose and principles is the starting point for taming the complexity. These are “north stars” that help us guide strategic decisions.

What else can we do? We can dial up our collective empathy. While this skill comes more naturally to some individuals than others, everyone can try harder to see the world through their colleagues’ eyes. From empathy comes deeper understanding, and a clearer path to achieving alignment and momentum.

We might believe we now have less time to be empathetic — but that’s not an excuse. We can all find enough time to understand what our colleagues are thinking and feeling. As the poet Maya Angelou said, “I think we all have empathy. We may not have enough courage to display it.” My advice: Be courageous.

[1] Thomas L. Friedman, Thank You for Being Late (Farrar, Straus and Giroux, 2016); pages 28-35.

[2] McChrystal, Stanley. Team of Teams: New Rules of Engagement for a Complex World (Penguin, 2015).

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