Belinda Parmar is CEO of The Empathy Business where she and her team measure and embed empathy in the world’s largest companies. We connected on the phone this fall to talk about the far-ranging effects of conducting business empathically. Read on for a fascinating look at the intersection of behavioral science, business, and feminism.

Stephanie Newman: What led you to start The Empathy Business?

Belinda Parmar: I had a company called Lady Geek, which was about getting the next generation of women to become tech pioneers. I loved doing it, but I realized a couple of years ago that our work was actually relevant to men. The defining factor wasn’t gender. It was empathy. The problem with talking about gender is that a lot of men just keep quiet. They don’t want to say the wrong thing. This work needs to embrace men, too, and that took me from Lady Geek to The Empathy Business.

How do you respond when people express skepticism about practicing empathy in business, as opposed to aggression or competitiveness?

There are a lot of skeptics. However, enlightened individuals understand that empathy correlates with performance. I run an empathy index — we’re in our fourth year — and we measure companies’ empathy levels. We look at how many women are on their board, their CO2 emissions and what employees think of the company. The top 10 companies outperform the bottom 10 by 50%. That’s true every way you cut the numbers: by growth, productivity or earnings. More empathetic companies make more money.

How does the empathy index work and how do you collect that data?

On a consultancy basis, we go really in-depth. We look at observational metrics, as well as attitudinal and behavioral metrics. To give you an example: blind copies on email. If a massive company has a high proportion of BCCs on email, they have a culture of disempowerment. That’s one metric we might use. Another is the percentage of time that senior vs. junior people speak in meetings. You don’t want your senior people talking all the time. You want to encourage your junior people to talk, because then you’re creating a culture of innovation, not a culture of deference.

Our public index looks at publicly available information. That includes a feed from Glassdoor with CEO ratings and employee reviews, diversity on the board and then the actual performance of the company.

What are empathy nudges? I saw on your website that you mention nudges as a tool to encourage empathy.

I’m obsessed with empathy nudges. I used to think that big problems needed big solutions, but 70% of cultural transformations in an organization fail. The reasons they fail are because they take a lot of time, they’re costly and they’re often the pet project of one individual. Nudges are taken from behavioral science. They’re small changes that are low-cost and high-impact.

Right now I’m working with a bank, and we set up an empathy unit. The unit has developed nudges across all parts of the business, right from the bank teller scripts to the employee process for claiming expenses. Language is one of the most powerful tools we have. There was resentment between the front line and the head office, and we realized the word “head” implied superiority. As a result, we changed “head office” to “support hub.” Using the term “support hub” reinforced that the head office of the bank was actually there to serve the front line.