Servant leadership has become a C-suite buzzword. Empathy is now a power skill. Collaboration, rather than competition, is the team dynamic that managers most covet.

Business leaders across industries are coming around to the notion that high-achieving workplaces can show compassion—and that doing so can benefit their team members’ performance in addition to their well-being.

Grafting an ethos of compassion into a performance-oriented culture is “not just possible, it’s necessary,” said Melissa Versino, assistant VP for talent development and manager development at insurer Zurich North America. “To really be able to create a mechanism where you can achieve sustainable results, where you can be innovative and you can hit your business outcomes, I think it's a direct result of leading with compassion and empathy. It’s not actually at odds.”

Versino’s comments were part of a panel discussion, titled “How High-performing Workplaces Can Show Compassion, Too,” at From Day One’s March conference in Chicago. The speakers expressed agreement about the value of compassionate leadership, but identified several challenges to exercising it.

One issue is concern about fairness and equity among managers. A manager may be inclined to behave compassionately toward an employee by accommodating a work-from-home request, for example, or a flexible schedule. Is it right to grant one employee that sort of flexibility if others don’t have the same opportunity? If you accommodate everyone on the team, will performance suffer?

For organizations committed to fostering a more empathetic workplace, it’s useful to communicate guidelines with managers so they better understand their decision-making latitude, as well as the company’s overall attitude toward those sorts of arrangements. “Companies have to really put the processes and procedures in place for their managers to say, ‘These are the guardrails within which you can operate,’ and then give them the agency to then take it as far as they need,” said Sarah Sheehan, co-founder and president of the employee-coaching provider Bravely. “Clarity is kindness. When we give people the guardrails, but then trust them to make their own decisions, that’s when we create these healthy cultures and the compassion piece.”

That flexibility is especially relevant when it comes to accommodating employees who are caregivers. There’s an equity angle: Most caregivers are women, and the pressure on caregivers amidst the pandemic is a primary reason women’s participation in the U.S. labor force dropped to a 33-year low in 2021, according to an analysis of federal government data by the National Women’s Law Center.

Companies and managers can support caregivers in lots of ways, ranging from flexible hours to meal kits and housekeeping stipends, pointed out Lisa Bomrad, chief HR officer at Homethrive, an Illinois-based company that supports caregivers. Bomrad said managers need to be educated about the support tools at their disposal. “Helping managers with the skills, the coaching, and giving them the guidance” can equip them to better model empathy and compassion within their teams, Bomrad said. “This is uncharted territory for a lot of them.”

Just as important as establishing those expectations is modeling them. Organizations should not expect their managers and teams to demonstrate empathy and compassion to one another if that behavior isn’t evident at the top. “People model the behaviors that they see the executive teams doing. If the CEO and others are empathetic, I think managers know they have the opportunity,” said Corey Flournoy, VP for people development and cultural engagement at Aurora, which develops technology for self-driving vehicles.

That’s the best-case scenario. Flournoy also warned that upper management also has the ability to undermine an organization’s efforts at fostering a culture or compassion. “If the CEO and others are so driven towards profits and everything else that they don't see the human side, that also lets you know as a manager that you possibly can’t afford to spend much time on people,” Flournoy said.

The ethos and impact of a compassionate culture aren't limited to issues of work-life balance. They also extend to the way companies emphasize their mission or environmental, social and governance (ESG) goals alongside the push for revenue and profit. When employees connect to a collective sense of altruistic purpose, the response is often positive.

“We’ve found that the biggest driver of employee engagement is meaningfulness,” said Christine Doucet, director of employee engagement at Ace Hardware Corp., and a director of the Ace Hardware Foundation. Doucet pointed to Ace Hardware’s longstanding support of the Children’s Miracle Network Hospitals as something that galvanized employees, and said that in recent years the company has added 20 hours of paid volunteer time for each employee to donate to a charity of their choice.

The idea, Doucet said, is to demonstrate both that the company cares about social impact and that its employees play a key role in bringing that vision to life. “You should tell your company’s philanthropic story, but then also allow your employees to be part of it,” said Doucet. “Give them credit, give them kudos, and make them feel like they're part of something bigger.”

Building a culture that incorporates empathy and compassion alongside an emphasis on high performance is a challenge—one that requires a new C-suite mindset as well as a different managerial toolkit. The pandemic has only made the transition more dramatic as managers contend with new obstacles, such as integrating new team members during an era of virtual work and building community among remote teams.

“The role of manager has changed from decision maker to connector, and it’s a huge leap for a lot of managers,” said Bravely’s Sheehan. “The role of the manager is to now facilitate all these connections, and it’s like a new set of skills that we have not required in the past.”

So, as managers emerge as the front-line ambassadors of a new culture of corporate compassion, it’s worth remembering that they, too, are worthy of a healthy dose of empathy.

Steve Hendershot is an award-winning multimedia journalist and bestselling author. He hosts the Project Management Institute’s top-rated Projectified podcast and operates Cedar Cathedral Narrative Studio in Chicago.