Empathy is about understanding things from someone else’s perspective.

As an entrepreneur or small business principal, it’s critical. Empathy includes everything from how employees perceive you to whether customers are satisfied with your products or services. And while it’s often dismissed as overly “touchy-feely” or “wimpy and emotional,” practicing empathy is linked directly to financial gains, so ignore it at your own risk.

Why Empathy Can Be As Important to Small Business Success as Solid Working Capital

According to the Harvard Business Review, empathy means understanding our emotional impact on others and making a change as a result. “It’s more important to a successful business than ever, correlating to growth, productivity, and earnings per employee,” HBR explained.

Need proof, check out the annual the Global Empathy Index, which analyzes the ethics, leadership, company culture, brand perception, and public social media messaging of 170 companies listed on major financial indexes. Staggeringly, the top 10 companies on the Empathy Index increased in value more than twice as much as the bottom 10 and generated 50% more earnings (defined by market capitalization).

How Entrepreneurs Can Practice Better Empathy in 5 Easy Steps

Fundamental builds strong growth capital relationships starting with a face-to-face understanding of our clients’ needs, fears, and goals. And we’re always listening for ways to make our services simpler and more responsive. So when renowned leadership advisors and empathy experts SYPartners published a list of 5 Ways to Cultivate Empathy, we took notice.

SYPartners is a cutting-edge management consultancy and product-design firm. They created Unstuck, an award-winning app that helps people understand what’s holding them back and how to move forward. They also provide leadership consulting to an array of Fortune 500 companies.

According to SYPartners, empathy enables leaders to “build stronger teams, design more ingenious solutions, and deepen their emotional intelligence, an increasingly covetable skill in the next era of business.”

Try these 5 proven ways of practicing empathy, courtesy of SYPartners:

1.    Take off your armor—empathy begets empathy – Your ability to feel emotions is what triggers them in others. If you want to connect with someone, you have to let yourself be vulnerable, too.

ACTION: When a colleague asks how you’re doing, don’t respond with a knee-jerk, “Fine, how are you?” Share something specific about how you feel in that moment. Or kick off your next meeting with a “pulse-check”—inviting the team to share what they’re excited or anxious about—instead of jumping right into business.

2.    Don’t just be there. Be present – As Oprah often says: “Every human being is looking for one thing, and that is to be validated, to be seen and to be heard.” Your job as a leader is to help others know they matter.

ACTION: Model for your team how to give your full attention when it matters most. In your next meeting, close your laptop, turn your smartphone screen-down (or hey, even put it away), and listen attentively.

3.    Catch every smile, tear, frown, and eye roll – Thousands of invitations for empathy cross your path every day. Do you notice them and shift your behavior, or do you let them glide past?

ACTION: Tune into details and teach your team to do the same. For example: When you present, what signals do you look for in the audience? When you prototype a new product, how do you observe what delights or frustrates people, and respond accordingly? When you sense a change in a colleague’s body language, how do you acknowledge it?

4.    Try on a new persona – It’s not always possible to get all the necessary voices at the table. But that doesn’t mean you can’t summon your imagination and best acting skills to pressure-test your team’s thinking.

ACTION: In your next working session or brainstorm, assign a role to each team member (e.g., the skeptical customer, the investor, the competitor, the patient) and have them represent that perspective as you review your work, to strengthen its efficacy. Better yet, ask team members to interview real people who fit those personas, before they assume the role.

5.    Go see for yourself – It’s hard to get perspective when you sit at a desk every day. To better understand whom you’re designing for or collaborating with, go to them where they are and observe their routines.

ACTION: Identify something your team needs to understand more deeply (e.g., another function in your organization; a customer experience; the habits of your user-base). Then go on a “seeing exploration” to observe it: Look for rituals, gaps, and frustrations. If possible, ask your subjects questions to enrich your findings.

Join us in testing out these innovative ways to employ empathy as you refocus your goals heading into the year. And if you or your clients seek a working capital partner who knows that improvement and growth depend on taking the time to understanding the people around us, contact Next Edge today.

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Vince Mancuso