An economic argument for compassion

In the summer of 2015, the multinational professional services firm, EY, announced that it would no longer be using degree classifications as the principle criterion for assessing applications for employment. In making their decision, EY joined a group of multinational corporations, including KPMG, Deloitte and PwC, who are taking action to close the gap between what employers want to see in their colleagues and what schools and universities are paying attention to. This gap has been talked about extensively for many years, but it’s only recently that such assertive action has been taken by so many influential businesses.

So why are firms acting now?

The answer to this question rests in the idea that the gap between what employers need and what is prioritised in education has become a chasm. This distance is widening at such a rate that competitiveness, growth and even survival are at threat. The education/employment gap has become business-critical. The forces that are opening this distance are, on one side, a powerful inertia in the education system, and on the other side, fundamental shifts in the way business is being done.

A shift in the nature of business

In the past, repetitive cycles, hierarchical structures and centralised decision-making characterised much of business and employment. But ask employers to describe business and work today, and they are more likely to use words like volatile, complex, hyper-connected, decentralised, distributed, mass-participation, self-service, do-it-yourself and sharing.

From the user-generated content that powers Facebook, to the 1.5 million craftspeople who host their sales on Etsy, in our new world, businesses need staff, customers and suppliers who take the lead, make their own decisions, and solve their own problems. Companies need people who are self-empowered.

And as the economic value of empowerment becomes more apparent, businesses are becoming increasingly empowering. Robin Chase, Founder and CEO of ZipCar refers to this shift in business as the Peers Inc. model, arguing that empowering companies “grow faster, learn faster, and adapt faster […] giving rise to a business environment that works very differently — almost the opposite — to 15, or even 10, years ago. Where once, companies succeeded by inducing scarcity and raising barriers through patents, trademarks, copyrights, and certifications, today, the most value is created by opening assets up and maximizing the participation of individuals — to experiment, to localise, to adapt, to innovate.”

What companies and economies need

Businesses and universities have extensively studied the knowledge, skills and qualities that define self-empowered employees (the Partnership for 21st Century Skills took an early leading role). However, for the large majority of young people, this research has not yet translated into changes in their experience of education. As a result, education systems have become increasingly ineffective at serving economies and by extension they have become increasingly ineffective at serving the societies and natural environments within which economies exist.

With companies now taking bold steps to align hiring criteria with learning objectives, it seems likely that the usual favourites of STEM, digital literacy, creativity, critical thinking, communication, collaboration, leadership, and problem-solving will feature prominently. But while these skills are certainly necessary, they might not be entirely sufficient, and employers would be wise to consider putting compassion high on their list of hiring criteria.

Employers need empathy

Businesses already implicitly value compassion because they value teamwork, collaboration and networks; because they know that relationships between colleagues, customers and suppliers are crucial. In short, companies understand the power of understanding people (at its crudest, understanding your customer is at the heart of good negotiation and selling). The financial consequences of this knowledge are significant: a study conducted by Rutgers University showed that compassionate companies outperformed their competitors by at least 20 per cent.

In this context “compassion” encompasses emotional and cognitive forms of empathy, understanding other people, and acting thoughtfully on that understanding. In other words, the word describes a complex state of being that includes — but goes beyond — the narrower meaning of acting to alleviate another person’s suffering.

With this wider definition, compassion is central to self-empowerment, to effectiveness in the workplace, and to economic success. Victor Chan, whose books on compassion are co-authored with His Holiness, The Dalai Lama, observes that “collaboration, teamwork and the ability to relate to others advance the course of a company” and that “compassion is a central determinant of a company’s success.”

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Educators should pay attention to compassion

Chan argues that even when looking at the objectives of education in purely economic terms, compassion should be prioritised. “Academic study is important”, he says, “but equally important is character. And we particularly need to develop compassion as the basis of collaborating and working with others… Compassion is a trait that one can cultivate and learn through practice and education systems can play an important role in developing it in young people… This is an idea that is quite recent, at least in the west. We must think of the importance of developing one’s whole person in the learning environment in order to prepare young people to be effective in the workplace and to lead fulfilled and successful lives.”

In saying this, Chan takes the economic argument further, by explaining that “compassion roots us in our relationships with others and in our environments, and is therefore central to creating flexible workforces that are able to respond not only to the challenges posed by markets but also to the broader social and environmental challenges businesses face.” Compassion is at the heart of any business that cares about its social and environmental impact.

EY’s decision to look beyond academic attainment in its hiring processes might finally give educators, the impetus they need to shift their focus of attention on a large scale. If so, we should make sure we use this opportunity to focus on nurturing the skills that are most deeply fundamental to empowering young people to build good businesses, healthier economies, and a better world.

By Ross Hall and Meera Patel, Ashoka. This piece was produced through a collaboration between Skoll World Forum and Ashoka to conclude a series of articles running around the Skoll World Forum 2016.

Originally published at www.virgin.com on April 25, 2016.

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