Why the leaders who obsess over understanding customers must apply the same mindset to their people — or watch innovation stall.
Ask any executive team whether they believe in human-centred design and you’ll get an easy yes. It’s become orthodoxy. We accept, without argument, that innovation starts with understanding the people we’re innovating for; their frustrations, their context, the jobs they’re trying to get done. No serious organisation would greenlight a major product decision today without claiming some version of customer insight behind it.
Then those same executives walk out of the design review and into a restructure, a transformation programme or a new strategy rollout, and the empathy stops at the door.
Patti Sanchez made this point powerfully in Harvard Business Review back in 2018, in a piece titled “The Secret to Leading Organizational Change Is Empathy”. Her argument was that change leaders should study their employees the way marketers study customers: build personas for key employee segments, interview people to understand their actual mindset rather than the one leadership assumes they hold, be transparent about what’s happening, and acknowledge fears openly instead of talking past them. Transformation, she argued, doesn’t succeed without broad involvement, and involvement doesn’t happen without understanding.
Nearly eight years on, I’d go further. Sanchez was describing empathy as the secret to leading change. But, I believe it’s something bigger. Empathy is a core leadership approach, and it’s the connective tissue between the two things every ambitious organisation says it wants; innovation-led growth and a culture capable of delivering it.
“Empathy has to point in two directions at once — outward at customers and inward at employees. Leaders who only manage the first half have built half an innovation system.”
The outward case is already won
Let’s start with the direction nobody argues about.
The entire logic of human-centred design rests on empathy. Deep customer understanding is what separates innovation from invention. It’s the difference between building something clever and building something people actually value. Having spent over two decades advising leadership teams on innovation-led growth, I’ve watched the organisations that get this right consistently outperform those that innovate from the inside out, starting with their own capabilities and hoping customers will care.
Here’s the thing most leadership teams still miss, though: innovation isn’t something organisations do. It’s something customers bestow. A new product, service or business model only becomes ‘innovative’ when the people it was built for experience enough value to call it so. That’s why empathy sits at the front of every credible innovation-focused approach. You cannot earn that judgement from customers you haven’t taken the time to understand.
So far, so uncontroversial. Most executive teams would nod along.
The inward case is where organisations fall down
Now apply exactly the same logic to your employees, because the parallel matters.
If the innovation badge is bestowed by customers who feel understood, then innovation capability is something that can only be articulated by employees who feel the same. The ideas, the discretionary thinking, the willingness to challenge, to experiment, to say “this isn’t working” early enough to matter. None of that can be mandated. It’s given, voluntarily, by people who believe their leaders understand their reality and have designed an environment worth contributing to.
And most haven’t. The gap I cite most often in my work comes from McKinsey’s innovation research: approximately 84% of executives say innovation is critical to their growth strategy, yet only around 6% are satisfied with their innovation performance. That chasm isn’t a shortage of ideas, budget or ambition. In my experience it’s almost always a shortage of conditions — and conditions are designed by leaders who understand the people who have to work within them.
This is where Sanchez’s argument and the human-centred design tradition converge into a single leadership mindset. She urged leaders to build employee personas and run listening interviews before communicating change. Strip away the labels and that’s simply design research pointed inward. The leaders I see build genuinely innovative organisations treat their employees the way great designers treat users: they observe before they prescribe, they map the real experience of working in the organisation rather than the one described in the values statement, and they design the environment — the culture — around what they learn.
“Culture is the employee experience of leadership. If that experience doesn’t include being understood, don’t expect it to produce innovation.”
Why innovation without empathy is a one-off at best
Can you innovate without an empathetic culture? Occasionally, yes. A determined team, a visionary founder, a crisis that temporarily suspends politics. Organisations sometimes produce a genuine breakthrough despite their environment. I’ve seen it happen.
What I’ve never seen is an organisation do it repeatedly without one. Repeatable innovation, i.e. the kind that compounds into sustained, innovation-led growth, demands that people take risks in front of each other, thousands of times, across years. It demands that someone three levels below the executive team feels safe enough to flag the flaw in a flagship project, and cares enough to bother. Psychological safety, which sits underneath all of this, isn’t created by posters, values or town halls. It’s created by leaders behaving in ways that prove they understand what speaking up actually costs the person doing it.
That’s empathy doing structural work. Not empathy as niceness, but empathy as the discipline of understanding what your people are experiencing, fearing and withholding, and then designing leadership behaviour and organisational conditions accordingly.
There’s a harder edge to this, too. When leaders launch transformation after transformation without ever engaging with how the last one actually landed on their people, they accrue what I call leadership credibility debt. Every announcement that ignores employees’ lived experience of the previous announcement gets discounted a little further. Eventually the organisation stops believing — and an organisation that has stopped believing has stopped contributing. Empathy, applied consistently, is how leaders avoid ever running up that debt in the first place.
What this asks of leaders
I’m deliberately not laying out a step-by-step method here because the specifics vary enormously by organisation, and this is the work I do directly with leadership teams. But the shape of the shift is consistent, and it echoes what Sanchez called for:
- It means treating your employees as the users of the organisation you’re designing, with the same rigour you’d apply to customers.
- It means listening as research, not as ritual — going into conversations to be changed by what you hear rather than to validate what you’ve already decided.
- It means transparency as a default, because people can handle discomfort far better than they can handle being managed around.
- And it means accepting that every layer of the organisation has a distinct relationship with innovation — what executives must own, what managers must drive, what the front line is being asked to contribute — and that each layer needs to be understood on its own terms, not addressed with one broadcast message from the top.
None of this is soft. It’s harder than the alternative, which is why the alternative remains so popular. Command-and-control is faster in the moment and quietly ruinous over time; empathy-led leadership is slower in the moment but compounds for years.
Two directions, one mindset
The organisations I’d bet on for the next decade are the ones that have stopped treating customer empathy and employee empathy as separate conversations. One owned by the design team, the other by HR. They recognise them as the same leadership discipline pointed in two directions: understand people deeply, then design for what you find. Products for customers. Conditions for employees. Innovation-led growth as the outcome of both.
Sanchez was right that empathy is the secret to leading change. But change is just the acute case. The chronic condition is innovation itself, and for that, empathy isn’t the secret. It’s the entry fee.
So here’s the question I’d put to any executive team: you can describe your customers’ frustrations in forensic detail. Could you do the same for your own people? And if not, what exactly do you think your culture is being built from?