Empathy: The Most Valuable Thing They Teach at HBS

These probably aren't words that you were expecting to see in the same sentence — Harvard Business School and empathy. But as I reflect back on my time as a student there, I've begun to realize that more than anything else, this is one of the the most valuable things that the school teaches.

It starts on day one. You're put into a "section" with 90 incredibly smart folks, people with whom you quickly become good friends. Then the moment arrives when you step into class, prepared for a case discussion with what you're sure is the right answer — but just before you're able to stick your hand up and get in on the discussion, a good friend — someone who you deeply respect and admire — jumps in to the conversation with an opinion that's exactly the opposite of yours. And it begins to dawn on you...that what they've expressed is right.

It's a humbling moment. It's valuable not just in reminding you that you're not always right (though that's always valuable), but also in teaching you to step out of your own shoes, and to put yourself into those of someone else.

It's a trait that is sorely lacking at the moment. There's a case to be made that the American political system is suffering at present because empathy has been almost entirely exorcised from within its walls. Politicians are being elected on the back of their ability to vilify those with whom they don't agree. These are not people who come to office with questions, or who seek to understand; instead, many are dogmatists, able to see the world through their own eyes. Their interest in conversation runs only one way — many seem capable of only talking at, not with, those with a different point of view on the world. The jettisoning of compromise is a direct result of this state of affairs; why would you give an inch of your position to someone whose perspective you can't even bring yourself to entertain?

The place for me, however, where an appreciation of empathy is most undervalued, is in business. The potential upside for those in business who are able to be empathetic is huge, and is eloquently described in Professor Clay Christensen's jobs-to-be-done theory. Understanding that people don't buy things because of their demographics — nobody buys something because they're a 25-30 year old white male with a college degree — but rather, because they go about living their life and some situation arises in which they need to solve a problem... and so they "hire" a product to do the job. This is a big "ah ha" to many folks when they first hear it; but when you really boil it down, the true power of this is in giving people in business a frame with which to exercise empathy. In fact, both Akio Morita of Sony and Steve Jobs were famous for never commissioning market research — instead, they'd just walk around the world watching what people did. They'd put themselves in the shoes of their customers.

And for those businesses whose executives are incapable of it? Well, they are subject to the ultimate stick — disruption. No better example of this exists than the story of Blockbuster and its competitive tangle with Netflix.

Blockbuster saw the rise of Netflix in the very early 2000s, and chose not to do anything about it. Why? Well, its management couldn't see the world from any perspective other than from the vantage point from which they sat: atop a $6 billion business with 60% margins, tens of thousands of employees and stores all across the country. Blockbuster's management couldn't bring itself to see Netflix's perspective: that while Netflix was only achieving 30% margins, Netflix wasn't comparing its 30% to Blockbuster's 60%. Netflix was comparing it to no profit at all. And Blockbuster's management certainly couldn't see the world from their customers' perspective: that late fees were driving folks up the wall, and that their range of movies eschewed anything that wasn't a new release. While Blockbuster knew it could invest to create a Netflix competitor, that would be an expensive proposition, it might not work, and even if it did, it would probably cannibalize its existing business. With that being their perspective, they saw two choices: creating a disruptive entrant with all the pitfalls of cost, and risk; or just continuing with the existing business. Thinking those were their options, continuing with the existing business looked like a pretty obvious choice.

The mildest application of a different perspective — stopping and considering what the world looked like to Netflix, or even what the world looked like to Blockbuster's customers — would have revealed that this was not the choice they faced at all. Their options, in reality, were to start the disruptive competitor — or go bankrupt. In fact, this story seems to repeat itself over and over for disrupted companies: they go out of business wanting to sell to customers what they want to sell to customers, rather than what customers want to buy.

It sounds obvious, but it's not.

Serious people will regularly dismiss empathy for the more concrete and defensible virtues of rational analysis. You'll get no argument from me that this absolutely has its place. However, depending on it alone to form your opinion can cause you to miss six billion other very valuable sources of insight.