The E-Factor of Personality: Why Empathy May Be Your Team’s Missing Link
Adam Smith believed humans’ ability to put themselves in others’ shoes was the foundation of markets. Yet employees often struggle to understand the perspectives of colleagues and customers. What can a manager do to foster empathy when it’s lacking?
Once there was a beauty salon client who accepted her stylist’s offer of some tea.
The cup the stylist brought, however, was lukewarm — almost cold.
When the client pointed this out, the stylist responded curtly, “Well, it came right out of the hot water tank”, and went back to cutting hair.
Moments later, the stylist stepped away to take a call. The stylist at the neighboring chair wasted no time slipping a cup of chai into her hands with an apology and an explanation: “We also have a kettle.”
Why the different responses from the two stylists?
It was not a matter of training or experience. Both had graduated the same school and worked together for years at that very salon.
Yet one had no problem serving lukewarm tea, and the other could barely wait to resolve the situation.
What was the difference?
Why did it seemed obvious to only one that something needed to be done?
And what do such differences mean for managers in other businesses?
The H Factor of Personality
About a decade ago, two Canadian psychologists realized there was something missing in our standard approach to understanding personality.
The “OCEAN” model favoured by psychologists and managers looking to understand workplace behaviours since the 80s measured five dimensions:
· Openness to Experience
· Conscientiousness
· Extraversion
· Agreeableness
· Neuroticism (Emotional Stability).
Kiboem Lee and Michael Ashton came to believe it was possible for individuals to appear positive and team-oriented on this scale, but still engage in self-serving behaviours that undermined teamwork.
Their proposed addition, “Honesty-Humility,” captured how likely an individual was to put the group’s needs first, present sincerely, and treat others fairly.
For some managers, understanding this “H-Factor” has become critical in hiring decisions and people management, supplementing common workstyle analysis tools like the Myers-Briggs Type Indicator (MBTI) and DiSC that fail to capture the trait.
Its practical importance has become evident as industrial psychologists embrace the reality that up to 5% of the general workforce may be sociopathic — unable to feel regard for others — a figure which may rise as high as 10–15% in management ranks.
Such individuals, particularly in positions of authority, present great risks to organizations. Even those that might qualify as only “partial” sociopaths are more likely to practice and foster toxic behaviours — and to engage in deceptive, even fraudulent practices.
The Psychological Foundation of Market Behaviour
But is “Honesty-Humility” the only personality feature managers might miss in the OCEAN and other models?
Karissa Price and I have spent the last few years seeking to map the paths via which a sense of purpose at work can drive employee engagement and productivity growth. This is a critical problem for managers. Despite decades of investment in tools like missions and team charters, employee engagement continues to languish at 21% globally (36% in the US) — while productivity growth has fallen to levels not seen since the 19th century.
When purpose shows up at work, it works miracles. Purpose-driven teams are more engaged and their businesses more profitable, outperforming the market several times over. But how to reproduce this elsewhere?
A key clue we’ve found comes from some of modern economics’ foundational thinking.
Before Adam Smith published his transformative On the Origins and Causes of the Wealth of Nations (1776), his Theory of Moral Sentiments (1759) delved into the psychological preconditions of market behaviour.
Human beings, Smith pointed out, had a distinctive capacity for putting themselves into others’ shoes: to imagine what might be required to “render their happiness.”
Smith called this “sympathy”. Today most psychologists would call it “cognitive empathy”: the ability to project oneself into the situation of another (as distinct from “affective empathy”, which is feeling at least some of what others do.)
Smith went out of his way to stress he was not talking about love, compassion or benevolence. As he famously declared in The Wealth of Nations, “[i]t is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest.”
Yet a clear fact remained. None of these merchants could sell anything to anyone if they could not imagine and anticipate others’ needs.
From Customers to Colleagues
For much of business history ever since, this sensible observation at the core of modern economics lay dormant, or at least taken for granted.
Towards the end of the 20th century, managers began to realize that the business ideal Sequoia Capital founder Don Valentine called “product-market fit” was not only critical, but could only be realized with a radical focus on the second half of the equation.
“Don’t find customers for your product,” proclaimed marketing legend Seth Godin. “Find products for your customers.”
“Marketing,” Godin went on to elaborate, “is our quest to make change on behalf of those we serve… we do it by understanding the irrational forces that drive each of us.”
In our work with growth companies, we’ve come to see this call to arms as one that needs to go far beyond customer empathy.
While 90% of companies have come to rank “customer experience” among their top goals, most jobs are not directly customer facing. Less than 20% are coded as “customer service” by the US Bureau of Labor Statistics — and those with customer-touching elements, like product development and sales, probably only make up another 20% or so.
Does this mean empathy is not critical throughout the other 60% of jobs?
Hardly.
Everyone in a business value chain, from general administration to finance, needs to empathize with those they serve or get service from.
Those who appreciate how urgent it is for the accounting department to render accurate month-end financials, for example, will be more inclined to file their expense reports on time.
While any manager who understands how much employees need to feel their own impact to perform will find it easier to engage them with meaningful feedback loops.
The E-Factor
We’ve come to believe that the capability for cognitive empathy — the “E-Factor” — is a seventh feature of personality that may be as critical as the H-Factor in driving employee and team performance.
Business is transactional by nature: value is created by processing and progressing inputs between steps. Transactions which link these — whether between a company and its customers, or individuals in an organization— create more value when suppliers best understand the needs of those they are supplying
Sounds obvious, right? Alas, fostering this capability appears to be easier said than done.
From one perspective, cognitive empathy is simply a skill like any other. We can all get better at it, through experience and training.
From another, it can look like a capacity we either have or don’t — like being able to sing on key. (At the extreme are individuals with Autism Spectrum Disorder (ASD).)
All other things equal, a high organizational E-Factor appears to be invaluable.
Consider the case of a specialized construction materials company we know. Having realized clients did not fully appreciate or value their price differentiation, they recently pivoted to compete on extraordinary customer service.
No sooner did it announce the change than a stark line began to divide employees.
Most enthusiastically embraced the “extra mile” they now had to go to ensure that customers were ordering the right products (and only the right products), would receive them exactly when needed, and so on.
A significant minority, however — perhaps a quarter — rejected the program. They found the practice of second-guessing customers and reaching out to confirm (and even downsize!) orders an inconvenient, unnecessary, even backwards step. Like the stylist who did not care about serving lukewarm tea, they did not see this extra handling as part of their job.
It’s tempting in such situations for managers to throw up their hands: to dismiss those who don’t or won’t “get it”, and test their replacements’ E-Factor. (We’ve become fond of the Empathy Quotient test developed by Cambridge University’s Simon Baron-Cohen.)
In larger workforces, however, this may not be an option. At the construction materials company, it would mean dismissing dozens of experienced workers at once, risking the entire enterprise.
Our clients have had some success by falling back on the old chestnut, “what gets measured, gets improved.”
E-deficient employees may struggle to identify with customers and dependents up and down the value chain. Most still want to be seen as strong performers. A simple aid for mimicking empathy is adopting metrics that reward “empathy-like” behaviours. Our client is now trialling order-by-order customer satisfaction ratings to guide bonuses and promotion decisions.
Such measures, however, are stop-gaps. What may be the truly extraordinary opportunity is one whose value may take time to manifest, but lies within reach of all employers:
Screen prospects for their E-Factor before they even enter the hiring process.
Sound extreme? Not when you consider that the cost of disengaged/non-aligned individuals often exceeds their annual compensation — in the worst cases, by orders of magnitude. As the saying goes, there’s no better way to chase away good employees than to tolerate bad ones.
For this reason, we’re now urging clients with productivity and team effectiveness concerns to move empathy front and centre in their recruitment efforts.
This may sound daunting. Only a fifth of human beings naturally exhibit the affective empathy that positions them to develop the cognitive variety without much training.
We’re encouraged by another thought, which Smith expressed as the opening line of his first book, that virtually all of us (even sociopaths, according to recent research) get some kind of reward from satisfying others’ needs:
“How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it.”
Not bad for a 250 year old thought.
Let’s see how far it can take us.
Stephen Butler is co-founder of the performance consultancy, Framework, and co-author (with Karissa Price) of the forthcoming “Why Is a Verb: How Well-Managed Teams Turn Purpose Into Productivity” (Sagely, 2023).
