Why nice leaders are detrimental to businesses

One of the key players in advocating for kindness is Kim Scott, the author of Radical Candor. She famously recounts an anecdote where she gave a presentation to Google bosses Sheryl Sandberg, Sergey Brin and Eric Schmidt about Google AdSense. 

The numbers were stellar and the presentation went great—or so she thought. At the end of it, Sandberg asked her to catch up. After giving her positive feedback about her presentation, Sandberg remarked that Scott used a lot of “ums” while talking. Scott brushed it off, but Sandberg persisted.

Says Scott, “She stopped, looked me right in the eye and said, ‘I can tell with that thing you do with your hand that I have to be a lot more direct with you. When you say ‘um’ every third word, it makes you sound stupid.’ Now, she had my full attention.”

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This experience proved to be a pivotal moment in Scott’s career, demonstrating the profound impact of genuine, direct feedback. It inspired her to develop the concept of “radical candour”, which emphasises caring enough to be clear even when it’s difficult. It’s about providing constructive criticism and praise from a place of compassion, without resorting to anger or harsh language. Think of it as an emotionally intelligent parent guiding their child.

Conversely, environments where feedback is withheld or delivered indirectly breed anxiety and hinder growth. When we’re left in the dark about our perceived shortcomings, we lose the opportunity to learn and improve.

As Scott aptly points out, “When bosses are too invested in everyone getting along, they also fail to encourage the people on their team to criticise one another for fear of sowing discord. They create the kind of work environment where being ‘nice’ is prioritised at the expense of critiquing and therefore improving actual performance.”

Read more: Why there’s always time for kindness in leadership, according to KonsultaMD’s Chelsea Elizabeth Samson

Kindness isn’t just ethically sound; it’s a powerful business strategy. A kind company culture has employees who are more fulfilled, live with purpose and might we say, happier. 

A kind company culture translates directly to happier employees, and happy employees create happy customers. Think about it: have you ever walked into a business and felt an immediate sense of negativity? It likely stemmed from an unkind culture trickling down to customer interactions.

According to a report by management consulting firm Baringa, which surveyed 6,028 employed consumers across several countries, 76 per cent of them said they would avoid buying from a company they consider unkind, citing factors such as poor treatment of employees and unethical practices.

At organisations that put kindness ahead of profits, employees are 120 per cent more likely to have a sense of purpose. This translates to a more positive state of mind and better interactions with customers and stakeholders.  

Read more: Natasha Moor on creating a beauty empire with kindness at its core

Kindness also has a direct impact on attrition rates. According to a report by the American Psychological Association, “acts of courtesy, helping and praise led to improved productivity, efficiency and lower turnover rates”.

As we know, losing an employee can be costly. The Global Health Care Outlook indicates that poor leadership can cost a company US$2,000 per employee per year due to issues like absenteeism and presenteeism.  

@simonsinek Empathy is recognizing that someone may have a problem, but they are not the problem. #simonsinek #empathy #trust #business #optimism ♬ original sound - Simon Sinek

The data shows that kindness pays. Signature Consultants, in partnership with Dynata, conducted a study on kind leadership and created the Humankindex, measuring how leading with kindness fosters innovation. The results were telling: an organisation is five times more likely to be considered innovative if also considered kind.  

We also need to follow the money trail. While research on the correlation between kindness and profit is still developing, a Baringa report stated: “Companies which are considered kind were 35 per cent more likely to have doubled their earnings before interest, tax and amortization (EBITDA) in the decade up to 2022.”

This article was adapted from our weekly newsletter, The Deep Dive. Read the full edition of “Why it doesn’t pay to be a nice leader”. Subscribe to The Deep Dive here.

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