Can a compassionate work culture lead to more profits?


Emma Seppala, a professor at Stanford, has a new book out called The Happiness Track. One of the most popular things I’ve written in the past few months, ‘You’ll Never Have A Good Work Culture Unless You Stop Promoting Assholes,’ is rooted in some of her research too. Now she’s got an excerpt from her book over at Wharton’s website, entitled ‘Why Compassion Serves You Better Than Self-Interest.’

If you find the overlapping theme of the three links above, it’s kind of somewhere in here:

  • People want to be generally ‘happy’ at work; they spend a bunch of time there.
  • Our managerial culture and best practices is not usually set up towards this end.
  • What is the role of compassion here?

Let’s chop it up.

Defining compassion at work

Seppala quotes some research from Kim Cameron, a professor at the University of Michigan, who defines ‘compassionate practices’ along these lines:

  • Caring for / being interested in / maintaining responsibility for colleagues as friends
  • Providing support for one another
  • Offering kindness/compassion
  • Inspiring one another at work
  • Emphasizing the meaningfulness of the work
  • Avoiding blame and forgiving mistakes
  • Operate with respect, gratitude, trust, and integrity

OK — these are all great things, great ideas, great concepts, etc. It all comes back to the power of friends at work and the power of social capital at work.

But … if you’ve ever had a job and a bunch of different managers, you know it’s not always that easy.

But why?

Why don’t companies and managers operate from a place of compassion?

There are dozens of reasons for this, but some of the big ones include:

  • They’re not designed that way: Higher up a chain, the goal of work is profits and perks. It all comes from relationships, yes, but the relationships are somewhat less important than they are to people in the middle or at the bottom. Companies don’t need to operate from trust and integrity. They need to make money or serve a purpose.
  • Compassion is viewed as a soft skill: Even though all effective leadership comes down to soft skills like communication, etc. — most companies view that stuff as fluffy. Middle managers and above love to rush around screeching about margins and targets. Communication and compassion could probably get you demoted at some places, honestly.
  • Management is not intuitive:  You get promoted for one series of things — hitting targets, perhaps? — and now you have to work with other people and guide/manage them. Most people assume that means “OK, I’ll teach them how to hit targets.” Nope. That’s not really it. But that’s how we train managers too — it’s all about process and deliverables, and less about how to genuinely work with other human beings. That’s a flaw. Many companies are incredibly bad at training new leaders, so this isn’t too surprising.
  • Work is a fraught exercise in avoiding incompetence: When that’s your goal, everything is designed and politically-protected to make sure that any of your flaws won’t be discussed or exposed. There’s no transparency, no discussions of failure, etc. It’s not a real environment, per se. How can you be compassionate if you’re not being real?

Those are just a few concepts here; there are many others, and it varies by workplace, geography, and industry for sure.

Would there be any benefit to a more compassionate workplace?

Go back to that Kim Cameron research above, where his team defined the values of compassion. Now look at their findings on the effects:

In a research article published in the Journal of Applied Behavioral Science, Cameron explains that when organizations institute these practices, their performance levels dramatically improve: “They achieve significantly higher levels of organizational effectiveness — including financial performance, customer satisfaction, and productivity.” He adds that the more compassionate the workplace, “the higher the performance in profitability, productivity, customer satisfaction and employee engagement.”

So here’s what is going up:

  • Fiscal performance
  • Customer satisfaction
  • Productivity
  • Profitability
  • Employee engagement

That’s a pretty nice pentagon of things to have rising in a company, yes?

Most leaders/managers would want to hit those targets in a given fiscal year, right?

So again, we come to a fork in a road.

You can make changes to the culture and see the bottom-line pop, but you need to first care about the culture and not just the bottom-line.

That’s where a lot of these ideas and research concepts die in the flood.

A different context for culture and compassion

Here’s one way to potentially think about work and your goals/objectives that would allow for some focus on culture. It’s actually fairly simple. Here we go:

That comes directly from Peter Drucker’s five questions, by the way:


… and that’s considered management gold by many.

So here’s where you can try to arrive at:

  • We want profits
  • But … profits aren’t the goal, per se
  • We need better organizational actions to get profits
  • Culture is the backbone of organizational actions
  • Better culture = more money?
  • What was this compassion research again?

Probably wouldn’t work at a lot of places, but what do you think? Too fluffy, or could a culture rooted in less competition and more compassion actually benefit the bottom line?

Ted Bauer

One Comment

  1. Love this article. I think the best work environment is when you are surrounded with people who you can work well with. Compassion for each other is definitely a must. Also, I have done research on personality testing in the workplace. It’s an interesting topic that would make the work environment more cohesive.

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