In early March 2020, a price war between Saudi Arabia and Russia triggered a record-breaking quarterly drop in the price of oil, and Triumph Power and Gas Systems Ltd., an energy service company based in Nigeria with 102 employees and $1.3 billion in annual revenue, saw the crisis severely affect its contracts with major international energy players such as Chevron and Shell.
But that was just the beginning of the challenges the organisation would face in 2020; few leaders within the energy sector could have predicted the pain still to come.
While scrambling to respond, the Nigerian government announced a 14-day lockdown of major cities to contain the spread of the novel coronavirus. With many other countries taking similar steps and halting economic activities, global demand for oil plummeted — leaving oil and gas sector companies such as Triumph in a state of deep uncertainty and disarray.
For Japheth Jev, ACMA, CGMA, the CFO at Triumph, the most challenging and pivotal moment of his leadership had presented itself.
"The crisis resulted in many of these customers terminating or deferring contracts," Jev said. "With demand for our services at a near standstill and revenue all but destroyed, the business was under huge pressure. As a finance leader, I had never before had to face such a chaotic situation — but it was my responsibility to captain the ship, support my team members, and get the company finances onto the right footing."
With his team working remotely for the first time, while also navigating anxiety and concerns around the wellbeing of loved ones, Jev understood that the situation called for a new and more compassionate style of leadership.
"I quickly realised that I needed to step away from the traditional, command-and-control style of leadership and embrace empathy as a way to understand and support team members through the turmoil they were all experiencing," he explained. "I had to drop my personal views and agenda and ensure that I was directed by compassion. If I was not able to practise empathy, I knew that I would be captain of a sinking ship."
This attitude ultimately paid dividends for Jev, his finance team, and Triumph. By placing trust in his team's abilities, showing empathy and personal interest, and enlisting their support around key objectives such as tighter cost management, Jev and his more personal approach to leadership contributed to what was ultimately a remarkable turnaround for Triumph.
The finance team achieved an increase of 30% in bottom-line earnings over the quarter despite the calamitous drop in revenue, which Jev attributed to rigorous discipline around costs.
Empathy has 'stalled' in the workplace
With countless other companies facing similarly harrowing scenarios, the pandemic elevated empathy into the day-to-day culture of business and management. And while research has shown that both leaders and employees are aware of its importance, there is often a failure to translate this awareness into tangible changes.
According to Businessolver's State of Workplace Empathy Study 2020, companies are "slipping rather than making gains in empathy", with the findings showing that employees' and HR professionals' ratings of their own companies on empathy have steadily fallen since 2018. Businessolver is a US-based employee benefits administration technology company that has conducted an annual report on empathy in the workplace since 2016.
"One of the key takeaways in this year's study is empathy has stalled," wrote Jon Shanahan, chief executive at Businessolver, in an introductory note to the report. "Employees feel as though their leaders are not doing enough to display empathy, and that was before the world was rocked by a pandemic. The importance of bridging that gap is now heightened by the current environment. Employees are depending on their employers to deliver empathy to help them overcome, adapt, and move forward."
A workplace culture characterised by empathy can provide the much-needed antidote to uncertainty — while simultaneously boosting engagement and efficiency, according to Businessolver.
"The global crisis has presented leaders with an opportunity to relaunch themselves and learn new skills to motivate teams and drive business performance," said Liza Robbins, chief executive, Kreston International, a global network of independent accounting firms. "Leading with empathy translates into good business, which includes retaining and motivating top talent."
The Businessolver 2020 study reinforces this view, with 74% of surveyed employees indicating they would work longer hours for an empathetic employer, while 80% said they would switch companies for equal pay if the employer were more empathetic.
FM magazine spoke to several finance leaders to learn how they can embrace and apply empathy in a consistent and authentic way. By shifting to a more empathetic approach and applying it in very practical ways, finance leaders can rapidly increase engagement, resulting in improved business performance — even in the face of the ongoing uncertainty that teams are challenged with today.
Define empathy within leadership
According to Robbins, the first step is to understand what empathy is and what it is not. If empathy is misunderstood, it can be dangerous.
"Empathy in leadership is about walking in someone else's shoes and really trying to see things from their point of view," Robbins said.
The danger lies in thinking that empathy is about agreeing with everything that the other person says (particularly if they are upset or emotional). Empathy is also not about entwining your whole emotional being with another person.
"As a leader, empathy requires taking the time to understand the impact from someone else's perspective, and then bringing all that information back, processing it, and considering your decision without that impact becoming the only deciding factor," Robbins said.
Listen more, talk less
"Only by learning to listen very, very carefully can finance leaders begin to understand what their team members are experiencing and feeling," Jev said. "Empathy can primarily be learned and adopted through listening more than you talk to others."
This may require setting up regular one-on-one meetings or check-ins with team members that can include both work and nonwork discussions. During these meetings, allow your team member to guide the conversation, and be mindful about always waiting to speak — remembering that your role is simply to listen and, where appropriate, to respond with empathetic phrases that give both acknowledgement and encouragement. For example, use phrases such as "I understand what you're saying" and "Thank you for sharing this with me".
Once they have gained an understanding of a team member's position or situation, Jev said that skilled leaders will then ask questions that gently prompt an employee to find a thoughtful solution that can both assuage anxieties and improve performance.
"Asking the right questions can both calm the nerves and also help to point to a positive solution — and in this new paradigm of empathetic leadership, one should encourage employee-led solutions that enable teams to chart their own course forward."
Create a platform for open discussions
Ian Meaker, director and founder of Creative CFO, a finance consultancy based in South Africa, said that leaders can foster a more empathetic and open working environment by creating various platforms and engaging talking points among teams. For instance, employees at Creative CFO all participate in personality profile assessments such as Personality I.D. and Myers-Briggs, the results of which provide an interesting starting point for conversations around personality traits, working styles, and preferences.
"These personality profiles don't dictate to us where someone may sit on a spectrum, but instead open the door to a more nuanced and deeper understanding of your colleagues," Meaker explained. "It's about encouraging conversations between team members on who they are, how they like to work and engage, etc ... and the reports provide a great foundation for those conversations."
In addition, Meaker recommended establishing different mechanisms whereby employees can regularly provide feedback and input on their experience at work. Creative CFO implements regular "pulse surveys" using a platform called Officevibe, which pushes out a regular and anonymous short survey via Slack. The survey covers topics such as wellness and relationships with colleagues and managers, with the results regularly updated on central dashboards.
"There are also anonymous comments that every director reads (or is made aware of), and team members can switch off the anonymous setting if they want to provide named feedback on a topic," Meaker added.
Set clear expectations and provide feedback
Peta Chennells, CFO at Munger Investment Partners, a private education fund manager based in South Africa, highlighted that empathy does not mean "being soft on deliverables and expectations".
"In a finance team, it is relatively easy to set clear expectations, as the tasks are very specific and require high levels of accuracy, delivered within very specific timeframes," she explained. "Each team member needs to understand clearly what their deliverables and timeframes are. They also need to know who to ask if they get stuck."
According to Chennells, high-performing teams have a strong culture of emotional safety and accountability. For finance leaders, this type of culture requires taking ownership of the development of team members and supporting them to achieve their potential.
In supporting the professional development of finance teams, Chennells also reiterated the importance of encouraging rest — and making sure that both you and your team take time to completely switch off.
Be personable and accessible
While it can be difficult (especially when under pressure) to put your tasks aside and make yourself available for your team members, Jev said that becoming more accessible is fundamental to practising empathetic leadership.
"It's important not to be too serious, or too busy, especially in times of crisis," he advised. "If your team members don't come to you, then go to them — but don't stay in your office and appear to be closed off."
According to Jev, most employees are still in the mode of only approaching a leader if there is a result or a specific technical issue to address, which can prevent a more personal and authentic relationship from developing.
"This can also be overcome by being curious and actively showing an interest in team members that goes beyond their role at work," he said.
Show your vulnerabilities
To connect with employees on a more human level, empathetic leadership requires the ability to be authentic and honest about your own struggles, Chennells said.
"Be open about the personal and professional challenges that you are facing so that your team can do the same," she said. "Finance leaders will also need to learn to drop egos and own up to their own mistakes and faults — which, again, opens the door for team members to follow that example."
When leaders avoid the common pitfall of pretending (or thinking) they have all the answers, particularly in a crisis, it sets the tone for a more collaborative and transparent working culture.
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- "7 Ways Finance Leaders Can Improve Their Emotional Intelligence", FM magazine, 15 October 2020
- "Leading With Empathy During the Pandemic", FM magazine, 14 October 2020
- "The Language of Financial Leadership", FM magazine, 29 June 2020
Jessica Hubbard is a freelance writer based in the UK. To comment on this article or to suggest an idea for another article, contact Drew Adamek, an FM magazine senior editor, at Andrew.Adamek@aicpa-cima.com.