Page 43 - Investment Advisor - November 2021

THE FAST TRACK
Compassion: The New Leadership Standard
It might sound “new-agey” but having empathy helps make a happier and
more productive workforce.
Within just a
few years, the
industry’s culture of
leadership shifted
to one of empathy
— the ability to
understand and
share feelings in a
safe environment.
By Angie Herbers
y now we’re all aware of how partnership tracks that allowed them to
the pandemic has accelerated win when the business won.
Btechnology adoption across the
wealth management industry, from EMPATHY SHIFT
Zoom meetings to digital account Within just a few years, the industry’s
openings. Less talked about but argu- culture of leadership shifted to one of
ably more important has been another empathy — the ability to understand and
sweeping change: The rise of compas- share feelings in a safe environment. A
sionate leadership. great deal of research has been published
The term “compassionate leadership” about the importance of empathy in
may strike some as a little new-agey, but leading people: When leaders show that
when done correctly, the practice opti- they understand and care about team
mizes team performance, and therefore members’ feelings, it facilitated happier
business growth. Before we get deeper employees and growth for the business
into this concept, let’s look at the evolu- within every growth metric. Yes, every.
tion of leadership cultures over the years. In this approach, leaders not only seek to
Now enters compassionate leadership.
From the 1990s through the first years
of the 21st century, leaders of upstart show they understand, but they also are
independent advisory firms generally accessible to offer help. It’s important to
understand the key difference between
employed a “management” approach.
They set goals for their people and eval- an empathic leader and a compassionate
uated their performance annually. Based one A person cannot be a compassionate
leader without first being an empathic
on those evaluations, team members
might earn merit-based bonuses; if they one. Empathic leaders can understand
the problem, and compassion leaders can
fell short, they might be told what was
required to earn a bonus the following go one step beyond, with the time to help
year. It’s a subjective formula — if you constructively solve the problem.
do what I tell you to, you get a reward,
Today we are seeing mounting evidence
and if you fail to do it, well, you get only that team members’ wellness — the degree
a portion or nothing. to which their mental, physical, emotion-
By the mid-2000s, thankfully, al, spiritual and financial needs are being
leadership-driven culture had begun met — is a key driver of success in careers.
to push out the old management It’s all about staying well and functioning
approach. By then, independent advi- optimally during times of stress, which
sor firms had grown and housed more often includes high-growth periods. And
professional talent, notably licensed, compassionate leaders are the best at fos-
client-facing advisors. tering cultures of wellness and keeping
Leaders, wary of having these pro- stress levels balanced for high performance.
fessionals feel undermined or talked So what does it take to be a com-
down to, shifted their focus to keep- passionate leader? Understanding and
ing them happy. They offered addi- empathy are essential, and beyond that, a
tional pay for earning designations, for compassionate leader will position them-
instance. They delineated career and selves as available and accessible to help.
NOVEMBER 2021 INVESTMENT ADVISOR 41