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  • Dr. Andy Schell, Ph.D., DBA, CPA, CMB

Empathy - Leader EQ

Research has identified five components of Emotional Intelligence. These elements include:

  • Self-Awareness - the ability to recognize and understand your moods, emotions, and drives, as well as their effect on others

  • Self-Regulation - the ability to control or redirect disruptive impulses and moods: the propensity to suspend judgment - to think before acting

  • Intrinsic Motivation - a passion for working for reasons that go beyond money or status: a propensity to pursue goals with energy and persistence

  • Empathy - the ability to understand the emotional makeup of other people: skill in treating people according to their emotional reactions

  • Social Skill - proficiency in managing relationships and building networks: an ability to find common ground and build rapport

Empathy is the outward expression of self-awareness. A self-aware leader is able to identify their emotions. An empathetic leader is able to identify the feelings of others. In short, empathy is the ability to identify and care about the feelings of others. Empathetic behavior is more than a tactic to manipulate a person. An empathetic leader is able to inspire their staff through the transparency that exists within the ability to identify and care about the emotional response of others.

The challenge of overtly discussing empathy in business is that we are taught to have distance from staff so that the decision to discipline or terminate staff is objective. The military takes the separation between managers and staff to an extreme degree. While it is important to make objective decisions in business, effective managers/leaders are able to possess empathy and still implement the hard decisions. Just as a loving parent must punish a child for their malicious behavior, so too must a leader both inspire and correct their staff from a position of engagement, not distance. The employee's trust and deeply embraced loyalty will rise to follow an empathic leader; just as callous disregard for the staff's feelings will erode trust and ignite the fires of disloyalty.

The presentation of empathy may include saying good morning to the staff, recognizing accomplishments regularly, and praising the staff's capability during a meeting with a third party. In contrast, the leader that takes credit for themselves to feed their ego is not an effective leader and will likely create ill-will among the employees.

The empathetic leader will be encouraging in a truthful manner rather than say something positive irrespective of the truth. In the TV show Brooklyn Nine-Nine, a substitute captain says, "you are the best detectives I've ever known." The captain's dishonest but positive statement made the team feel special at first, but later, when they saw the same captain saying the same thing to a different group of detectives, they felt disrespected as they learned that the captain's comment was not the truth. A leader that frequently speaks disingenuous positive comments is making these comments for themselves and not for others. This is a sign of a poor leader who is without empathy and who likely struggles with egomaniacal megalomania.

An empathetic leader will provide the staff with compliments and encouraging words that are honest and truthful. The practice of saying something positive just because it sounds good, but isn't actually true, will lead to distrust.

An empathetic leader will not necessarily cry at every sad story and certainly will not try to fix everybody's personal problems. An empathetic leader will consider the employee's feelings along with all of the facts related to the circumstance at hand when making a decision. A leader who embraces self-awareness, self-regulation, and an empathic mindset in the workplace will separate the emotion from the facts to apply logic and reason to support a business decision. A leader that fully accepts the components of emotional intelligence will make consistent decisions based on the data, logic, and circumstances they face, irrespective of the emotion associated with the environment.

The mortgage lending industry provides an opportunity to dissect the difference between an empathetic and non-empathetic leader. The CEO of a midsized mortgage company presented a disheartening speech to the staff, emphasizing that layoffs are coming soon. At another company, the CEO gathered the staff together and said they were concerned about the market and

worried about how the decline in volume would impact their company. (A CEO saying they are worried is transparency and empathy) The CEO promised to do their best to keep everybody informed about the staffing decisions as they adjust the size of the company to match the decline in revenue. The first CEO did not reflect transparency or empathy. The staff at the first company all started sending out their resumes. The employees at the second company asked, how can we help. Research has demonstrated that humans respond to transparency.

The last two points about empathy relate to accepting the rapid pace of change while building the firm's bench strength. In short, to be successful, we must be adaptive as we are constantly building, which requires a skill-set of a coach. (See Dr. Schell's article on leader/manager/coach) Research has consistently shown that coaching and mentoring generates higher job performance; it also generates higher job satisfaction and loyalty. Research has also shown that a good coach is able to connect and "get inside the heads" of the people they direct. A good coach knows when to push because they see the person's potential, capability, and weakness. A good coach will motivate their protégés to achieve more than they thought possible as they demonstrate empathy in action.

Empathic leaders can make hard decisions because they do more than sympathize with people around them; they also use their coaching skills to improve the staff's capability and transparently engage with the staff so that when layoffs surface, it is no surprise who gets cut.

This information is from The Harvard Business Review that was written by Daniel Goleman called What Makes a Leader? You can find the full article here.

MBS Financial Services supports the following areas:

  • Growth Strategy – We can help you plan and execute a growth strategy.

  • Hedging & Pipeline Risk Management - Dr. Schell can help explain how hedging functions, the benefits of hedging, and the risks associated with the activity. See blog posts.

  • Technology must align with a firm's strategic objective. Every mortgage lender's technology infrastructure significantly impacts its customer experience and employee workflow. MBS will help select, configure and deploy the best technology solution.

  • Executive Development - Leadership is a learned skill. Dr. Schell can teach you to be an amazing leader, an effective manager, and an inspiring coach that can foster a vibrant culture.

  • Accounting Services – Dr. Schell, CPA, leads the accounting services team to become your outsourced accounting department. This alternative makes more and more sense for companies wishing to focus on their core business and also want trustworthy accounting and financial reporting support.

About Dr. Schell:

Dr. Andy Schell, Ph.D., DBA, MSML, MBA, CPA/CFF, CMB

Dr. Schell is CEO, Managing Partner, and Co-Founder of Mortgage Banking Solutions and the Founder of MBS Financial Services ("MBS"), based in Austin, Texas. Dr. Schell is known for his ability to turn "vision into reality" and "chaos into order" as he finds creative solutions to the challenges his clients face addressing Revenue Stability, Technology Enhancement, Financial Management, and Workflow Efficiency.

He has 4 decades of experience as a strategist directing the activity of both small and large groups of employees including mortgage lending activity at Bank of America. His leadership knowledge extends from his hands-on experience and his academic training in his MBA, his master's degree in leadership, and his doctoral work to examine employee dynamics given leader stimulus.

To find out more information on MBS Services, please click HERE

Find more information at ; (512) 501-2812;

Doctor Schell the Profit Doctor

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