The Biggest Mistake in Modern Business Today

Albert Einstein Quotation @drnatalie
I know that sounds grandiose. But as Tony Bates and I were doing research for our book, Empathy in ActionTM, back in 2019, before empathy became a buzzword, we came to some interesting conclusions. As we started collaborating, our inquiry began with examining why customer and employee experience hasn’t really changed despite all the proclamations about its importance.
In fact, customer/employee experience is mentioned in most all company’s mission and vision statements, and in shareholders’ and investors’ annual reports which provide insight into the future direction of the company, along with its goals and objectives.
And while you’ll have to read the book to get the full picture (yep that was a plug), below is a synopsis of some of the insights and conclusions. And now that the book is launched, we are curious to see which companies and leaders will embrace what’s coming now we are in the Fifth Industrial Revolution.
Table of industrial revolutions

Introducing the Fifth Industrial Revolution


Insights, Conclusions, and Questions

Companies say it’s important: customers and employees disagree

Research by Bain and Company shows the same results Forrester Research showed nearly 15 years ago: “80% of companies believe that they provide great customer and employee experiences. Yet, when you ask the customers and employees, only 20% would agree.” We asked ourselves,” How can there still be such a huge gap?”

Sympathy is not the same as empathy

We found people tend to confuse empathy with sympathy. Sympathy is simply saying, “I’m sorry that is happening to you.”
Empathy is about listening, understanding, predicting, acting, and learning about the person you are serving whether it’s an employee, a customer, a citizen…
In essence, an empathic approach would include changing behaviors, not just saying something. For instance, sympathy would be kin to saying you wish you had a washboard stomach. Empathy is doing the strength training to sport 6-pack abs.

Business-centric approaches reduce a competitive advantage

We found most leaders and businesses use a business-centric approach- very different than a customer/employee/citizen-centric approach which is rooted in empathy.
Employing empathy means standing in the shoes of your people, seeing the world through their eyes, and changing choices, decisions, and behaviors. It is a required strategic mindset shift.
Without it, as Einstein said, “You’ll end up doing the same things and expecting different results.” (FUN FACT: Einstein didn’t necessarily know any more physics than others at the time. The key thing he did? Shift his mindset to come up with the theory of relativity. So, ask yourself, “Do you know what it would take to be the next Einstein in business leadership?”)

Albert Einstein Quotation

Remnants of four industrial revolution’s legacy mindset linger in leadership

The History Channel series, “The Titans Who Built America” details the zeitgeist from the First Industrial Revolution. It was one of business-centric efficiency at all costs. And while major advancements were made by the creation of many incredible inventions, products, and services, it came at the cost of people. Unthinkable working and living conditions were juxtaposed by singularly focused greed empires.
As you look at subsequent industrial revolutions, while efficiency began to include the effectiveness of reaching a goal – those goals were business-centric. Rarely if ever was it about what was great for the employee or the customer.
An example? The American auto industry is a pointed example of what can happen. Employees fought back by creating unions. And customers choose to purchase foreign cars which delivered better quality products for less money, leaving the American auto industry in a lurch it almost didn’t recover from. You don’t want to repeat that leadership mindset pattern.

Leading using Empathy in Action isn’t about creating kumbaya factories

We are talking about the ability to differentiate yourself in a market where customer expectations are higher than ever. Where your online presence, from retail to digital media can make you or break you. And where brick and mortar have taken on a whole new meaning, as business models are shifting to business-as-a-service, regardless of the industry.
And employees? In early 2021 as told by an article on, Organizational psychologist Anthony Klotz and a management professor at Texas A&M University’s Mays Business School coined the term “The Great Resignation.” The article looks at why millions of employees retiring/quitting and how this shift in employee loyalty is making companies rethink the employee experience. It’s a phenomenon that is leaving many businesses without enough employees to run their businesses.
But do leaders see the connection to an empathic approach? Not generally. At least not yet. But give us a minute. What it means is we must stop pretending we care about our customers and employees. And instead, really listen; understand and predict the next best things from their point of view, take action, (make choices and decisions), and then continuously review the first three steps to learn what would be better if… and then repeat the steps over, and over and over and never, ever stop.

Customer and employee value is missing from the corporate balance sheet

So, besides a business-centric approach and leadership styles, why hasn’t the customer and employee experience changed? Consider this. If you don’t have employees, there is no one to create products and services. And without customers, there isn’t anyone to buy those products or services. Yet neither asset is on the balance sheet.
The point? What gets measured, gets managed. Until the GAAP (Generally Accepted Accounting Principles) provides a way to measure the value of customers and employees (not just revenue or attrition costs) but customer and employee lifetime value, CEOs will be beholden to what Wall Street and investors expect from them. Short-term gains; profit over people. It’s a paradigm that started a long time ago. Even if you look just at the first industrial revolution – you see its dominance.
Technological capabilities have stunted us from delivering the Art of the Possible
The technology used in the first four industrial revolutions was all about business-centric efficiency and effectiveness: more, faster, and at lower costs to the company. And while we may have wanted to create great customer and employee experiences, the truth is, until now, we’ve never had technology that could deliver on highly personalized, contextually relevant customer and employee experiences. Don’t get me wrong. While, when reviewing all that has been achieved in technology, it’s a lot. But when you compare it to what is possible now… it’s stunningly different.
What’s great about where we are in the Fifth Industrial Revolution is with the unprecedented and accelerated capabilities of data, AI, and the cloud, we can finally begin to provide the types of experiences customers and employees seek.

The Fifth Industrial Revolution means deep collaboration: People, machines, and awareness

A people customer/employee point of view is not new. In fact, using empathy is the very premise of what late Harvard Professor Clayton Christensen termed, “The Job to Be Done.” Christensen showed in his book Competing Against Luck, that when you design products that help the customer, from their point of view, you win. Go further back, and your find Edward Deming who advocated using customer and employee feedback as the mainstay of how you do business. And when America Auto Industry wasn’t listening, Deming took the process to Japan and nearly destroyed the American auto industry. What history shows us is we don’t always learn from it.
As we leave the Fourth Industrial Revolution behind, we have a new opportunity. Embarking on the Fifth Industrial Revolution, means we have entered a new zeitgeist. Why does this point in time matter? It’s the first time in history where people-centric awareness and the use of unprecedented technological capabilities becomes conjoined. We just must know what we are optimizing for and why- for customers, for employees, for citizens… for people. And never lose sight of that.

Not invented here vs. psychological safety

Of course, it can’t all be about the finances or the technology. Where else have companies also gone wrong? Carrying forward that historical 1st, 2nd, 3rd, and 4th IR footprint of the way companies have treated people. Eliminating from the vocabulary should be phrases like, “Not Invented Here” or “That’s not the way we do things here” or “There are 100 people lined up to take your spot if you don’t want to do things my way” or “There will always be another customer”
For the table stakes of innovation, competition, and differentiation to be a mainstay, research shows companies need a diverse workforce and they need the psychological safety to voice differing opinions. And operate in brainstorming sessions where there are no bad ideas, and cultures operate in a “Yes, and…” mode where individual contributions are built on and congealed into concrete capabilities which fuel success.

Put yourself in someone else’s shoes

Theirs is enormous value in walking in someone else’s shoes. And was in part how we came up with the idea for our book. Empathy, in our definition, is the ability to put yourself in the shoes of another person, see the world through their eyes, and without being singularly focused on what “you” think they need or should want, and then when taking action, incorporate their point of view.
What’s interesting is– when we asked business leaders to do this, they found they’d change most everything they are doing. More musing to come…

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