The Importance of Empathetic Leadership: Business Success Redefined

**SPEAKER_2** (0:03)
The Bliss Business Podcast, the show about empathy, connection, and consciousness in business. Today's episode is brought to you by Zero Company, your paid search, social media, and programmatic ad experts.

**Steven Skash** (0:16)
Welcome to the show. We've got myself, Steven Skash. We've got Tulio Saragusa and Ash Mar. Today, we're going to talk about the art of leading with heart, or rather, the importance of empathetic leadership. And on that note, let's go back into the time machine for a minute. I want to talk about Enron, the cautionary tale, of course. Here's their company vision. To be the leading company achieved by the relentless pursuit of shareholder value through free markets and innovation. The relentless pursuit of shareholder value, that was their guiding light, and it's not anything unusual. It's been popularized by Milton Friedman and many others that the company is responsible to its shareholders. That's its primary responsibility. So Enron wasn't thinking any different than anyone else. Enron's environment, though, fostered this belief in survival of the smartest.
Success was achieved through advancement as a result of outcompeting others. And this guiding light led to a workplace culture that really prioritized short-term gains and individual success over ethical considerations and long-term stability. So one of the key elements of this is something that's called stack ranking, or as it was referred to in Enron, rank and yank. You evaluate your employees based on the top tier, one or two middle tiers, and then this bottom percentage, and every year the bottom percentage at Enron was fired.
So think about this. 30% of Fortune 500 companies use stack ranking. So the top 20% are rewarded, the bottom 10%, 10%, 15% or so are fired or warned. The middle 70%, well, you're told you're average. So you've got this system that demoralizes 80% of your workforce.
Not to mention this is going to cause a lack of teamwork and maybe diversity of thought and maybe result in some unpleasant folks just moving up the ladder because they're hitting this bottom line KPI. So how did we get here with things like rank and yank? I say it kind of goes back to that primary drive that Enron has and a lot of companies have is that single sole goal of the pursuit of shareholder value. Instead of valuing all your stakeholders, so that means not just investors, but employees, customers, vendors, your community.
So valuing just one part of the equation, the investors, is going to lead you off the track a little bit. So what I want to talk about now is who exactly are you leading when you're a leader?
You've got all these different groups. So Tulio and Ash, who are we leading?

**Tulio Saragusa** (3:14)
I think, first of all, you have to acknowledge that you're leading yourself to begin with. And what are you leading yourself toward? It really is about becoming a better human being every day, being someone that other people can count on.
So it's really about accountability, self-accountability, integrity. At least for me, those are the main principles. Integrity, authenticity, living with truth.
And once you can embody that for yourself, then the natural extension is to help others step into that as well. So to me, leadership is really about enabling others to step into leadership. And the only way to do that is through example. You can teach leadership, write about it, but until you're actually embodying those principles and giving someone something to emulate that resonates with them, you're just kind of paying lip service to it. So it's about leading others to step into their own leadership and through that process, creating a better work environment and actually a better world.

**Steven Skash** (4:25)
Yeah, so you've got all these people, you're leading the employees, and you've got to make sure you're taking care of yourself first.
But you're trying to teach leaders to lead within your organization as well.
And all these people, they have wives, right? They've got families, they have different roles in the company. It might be an older person transitioning to a new role. It might be a working parent and stuff. You've got also vendors and people in the community. If you're a big company that's working in a community, you've also got to consider just your impact on the community. Ash, what are your thoughts about, like, who are we leading here?

**Ash Mar** (5:07)
No, and I have to just piggyback. I want to take a moment to just let that... You're leading yourself. I want to focus on that a little bit.
Because when I look back at any leader that I've actually followed in my past, it wasn't anyone that actually told me what to do. It was someone that inspired me to take action because I respected how they led themselves and led the organization after the fact.