Empathy: When Leaders Lose Touch with Customers

What happens to companies when they focus on the numbers, instead of what customers want? Lack of empathy can lead to a company’s demise.

Some business executives dismiss the need for empathy, favoring the more concrete and defensible virtues of rational analysis. They have a point. So did Blockbuster executives when faced with Netflix’s debut.

Blockbuster witnessed Netflix’s dramatic growth in the early 2000’s and chose to do nothing. Company leaders saw the world from a solitary vantage point: atop a $6 billion business with 60% margins, tens of thousands of employees and a thriving nationwide retail chain.

Blockbuster’s management team certainly didn’t view the world from its customers’ perspective: late fees that drove renters up the wall and a limited range of movies that eschewed anything that wasn’t a new release.

Netflix’s ultimate market domination is a cautionary tale for other complacent companies. The Blockbusters of the world go belly up because they sell what they want to sell—not what their customers want to buy.

Overly simplified, abstract information from market research often carries authority inside organizations. It’s easy to be mislead. Knowing and understanding your customers is the antidote.

“The problem with business today isn’t a lack of innovation; it’s a lack of empathy,” writes Professor Dev Patnaik in Wired to Care: How Companies Prosper When They Create Widespread Empathy.

Empathy is the ability to step outside yourself and see the world as other people do. For some companies, it’s also a rarely discussed engine for growth.

Harley-Davidson gets it right. The company hires fans and publicizes its connection with consumers. Leaders work hard to stay in touch with consumers’ changing needs.

This is the way business used to be conducted two centuries ago. For thousands of years, craftsmen made things for people they knew. Tailors, cobblers and other tradesmen understood what their customers wanted.

This approach ended with the Industrial Revolution. As more goods were mass-produced in factories, suppliers and consumers experienced a growing rift — one that we’ve been struggling to repair ever since. It’s much harder to succeed when you create products for people you don’t know — individuals whose lives seem alien to yours or who are halfway around the world.

In the work you do at your company, in what ways do you see a lack of understanding of customer’s complaints? Where do you see a need to shift attention and empathy? I’d love to hear from you.

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