Despite all the talk of how technology will eventually take our jobs, the future of work is, for the moment at least, human-dependent. And people remain a business’s greatest asset. To keep employees as happy and productive as possible, leaders must treat them with compassion, kindness and humanity. Once you create a human-centric culture that serves the needs of people first, you’ll then start to see the benefits for your business.
In this article, we’ll define human-centric leadership, explore the key principles that underpin it, provide strategies for adopting it, and discuss the benefits that make it so powerful.
What is human-centric leadership?
Putting people first is at the heart of human-centric leadership. It’s about valuing individual qualities, understanding the circumstances of your employees, and seeing them as people rather than job titles.
Traditionally, a good leader commanded respect, made big decisions, and inspired the team, but now, establishing a human connection is more important than ever. According to a recent Gallup survey, people need trust, stability, hope, and compassion to be successful employees.
There was a move towards a more human style of leadership before the pandemic. The COVID-19 crisis then prompted a collective reassessment of the world of work that crystallized that shift. Hard skills (those based on technical and professional competencies) that were once deemed important became less significant, and hybrid and remote working blurred the boundaries between our working and personal lives. These changes made it more important than ever for managers and leaders to put people first.
What are the principles of human-centric leadership?
Research by Gartner has identified three qualities of a human-centric leader:
- Authenticity – allowing true self-expression and acting with purpose
- Empathy – showing genuine care for the needs and wellbeing of workers
- Flexibility – having the desire and will to adapt working conditions to meet the needs of employees
The participants of a recent Boston Consulting Group survey identified more characteristics of human-centric leaders. In addition to empathy, the 4,000 participants felt leaders should display:
- Consideration – building a good rapport with the team and respecting their views
- Listening – listening to the opinions of staff and building their views into future plans
- Team development – creating opportunities for team members to progress and develop their skills
- Self-reflection – understanding yourself as a leader and the areas where you can improve
- Transparency – communicating openly and honestly and sharing the company’s challenges, performance, and goals.
The crux of this leadership style is putting people at the heart of the organization’s efforts. Human-centric leaders recognize that people are not just another asset, like materials or a building, but are vital contributors who are the foundation of the business.
That vision differs from traditional task-orientated leadership, which focuses on deadlines, results, profitability, and performance. This business-centric approach can be effective, particularly when it comes to keeping shareholders happy, but having a profitable business with a thriving workforce rather than at the expense of your workforce has to be the better way.
The power of human-centric leadership
Every business is human-centered. Even those whose value comes from technology or other intellectual assets still rely on people, so why does the whole idea of being human-centered sound so radical and exciting?
The reality is that leaders are often so focused on the metrics that they forget they are dealing with humans with worries, frailties, strengths, weaknesses, and commitments outside of work. When those humans don’t fit into certain categories or stop being productive, they don’t think about the personal or work-related issues behind it, but instead see them as part of the problem.
What organizations have started to realize, and the pandemic played a big part in this, was that people shouldn’t just have to “suck it up”. There’s a lot more going on in people’s lives beyond the surface level, and treating employees as individuals and taking the time to recognize their struggles and contributions can produce powerful results.
The hospitality industry is particularly dependent on its workers, as employee well-being is tightly linked to the quality of service they provide for customers.
Traditional leadership models that focus solely on profit margins at the expense of investing in human capital will not be able to attract and keep a talent pool geared for longevity, productivity and success. Developing employee-centric leadership models that promote human values and a positive company culture is essential. Markus Venzin, EHL Group’s CEO
What are the benefits of human-centric leadership?
Employees’ priorities have shifted dramatically over the last few years, both in response to the pandemic and as a result of the changing attitudes of younger generations. Younger workers are not motivated by stability and survival like their parents and grandparents were. They want to work for organizations that prioritize ethics and their wellbeing and will proactively search for workplaces that can support that.
Here are some of the benefits a human-centric leadership can bring:
Improved engagement
Employees who feel valued and listened to are more engaged at work. According to Gartner, 37% more employees say they are engaged when they have a human-centric leader. That’s particularly significant given that highly engaged employees boost team performance by 27%.
Increased motivation
Employees under more considerate leadership and who have greater flexibility are more likely to feel happy at work. That has a positive effect on productivity, with research from the University of Warwick suggesting happy employees are 12% more productive.
Lower staff turnover
83% of employees believe their wellbeing is equally important as their salary, while 77% would leave a company that didn’t prioritize their wellbeing. The same research found that employees would leave their jobs for one that gave them more control over their working hours (72%), better supported their growth (72%), or let them have more control over where they work (66%).
More creativity and innovation
Human-centric leaders give their teams a sense of psychological safety, allowing them to voice their opinions, take moderate risks, and be creative without the fear of judgment, recrimination, or negative consequences. That increases creativity and innovation in the workplace and helps to keep businesses one step ahead.
A healthier workplace culture
A company culture based on trust, empathy, and open communication encourages authenticity in the workplace and allows employees to be open about their motivations and personal goals.
Human-centric leadership is not just “nice to have”
While we can see the benefits of human-centric leadership, we must also point out the consequences of traditional leadership styles that prize profitability over human needs.
Human-centric leadership is essential for organizations seeking to improve their Environmental, social, and governance (ESG) standing, which is becoming increasingly important in the decision-making processes of investors, consumers, and employees.
Ignoring this trend can have disasterous results for a company’s reputation and human resources. Consider this anecdote concerning ESG issues from a recent article:
Last year, there was a backlash against ESG when Tesla was removed from the S&P 500 ESG Index due to concerns about employee safety and working conditions. In response, Elon Musk, the CEO of Tesla, called ESG a “scam” and “part of a leftist agenda.” Additionally, regulators have accused Goldman Sachs, Deutsche Bank, and BNY Mellon of making misleading claims about the presence of ESG factors in their investment processes. Despite some of the world’s largest organizations criticizing ESG, it is generally considered to be a simple case of growing pains. The reality is that ESG is being driven by market forces, so it is here to stay, whether or not some of the world’s largest organizations like it. Stefan Güldenberg, Full Professor and Academic Director, Graduate School EHL Hospitality
How do you become a human-centric leader?
To become a human-centric leader, you must prioritize people and purpose over profit. That’s not to say money isn’t important. It’s about recognizing that sustainable profitability comes from happy, healthy, and engaged workers rather than those who are burnt out, stressed, and driven by uncertainty and fear.
Creating human-centric leaders does not happen overnight. It’s a process that requires commitment, re-learning, and a new set of tools. EHL Graduate School has recently updated the curriculum of its master’s degree programs, MBAs, and Executive Education to embrace human-centric leadership. The programs help prepare leaders to adopt a people-first mindset and implement practices that support employee wellbeing and a healthy company culture.
Fundamentally, human-centricity requires a holistic approach that starts with the leaders themselves. As they change their approach, it filters through to all parts of the organization and positively impacts the culture. By adopting a people-focused style, you can develop a loyal and engaged workforce who will grow with you and stay for the long term.
