Forbes: Strategic Empathy As A Source Of Competitive Advantage

Do layoffs today hurt profits tomorrow? Recent research suggests that these cost-cutting measures might decrease a firm’s hard-won competence, arguing for a refrain or at least a pause from drastic measures. There is a broader concept that ends at the same conclusion: strategic empathy analyzes, reflects, and internalizes the current and future sentiments and plans of a firm’s customers, competitors, and employees. This empathy requires a pause before a firm takes drastic action to retrench or innovate.

The headlines have been awash with reports of massive layoffs across many sectors of the American economy. Last month it was Facebook. This week it is Goldman Sachs. Even though there is still some debate as to whether the American – and global – economy will have an incremental brief drop in demand (a “soft landing”) or a precipitous prolonged tumble (a “hard landing”), few economists and business leaders doubt that we are heading into a period of economic pain.