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A good leader needs to be decisive, intelligent and visionary — all good qualities to be sure. However, they’re not enough on their own. Truly great leaders also are compassionate. Studies have shown that compassionate leaders create stronger bonds between people and improve collaboration and trust. Compassionate leaders also are viewed as more competent and are more critical now than ever before.

But what is compassion? Compassion is made of three components: the first is an awareness that someone or a group of people is suffering. The second is responding empathetically to them. The third is taking action to help. Let’s break these three elements down even more.

The first step to solving a problem is admitting that you have one, and the first step to being compassionate is thinking outside of yourself. When you examine the root of the word “compassion,” it means “to suffer with,” and the key to being aware someone is suffering is to see them as part of you. Don’t think of your employees as underlings to do your bidding; think of them as part of your team or family. Or even parts of a single organism. When one part suffers, the whole suffers, including you. That’s what we mean by becoming aware of the suffering of others.

Once you open up to those around you, the next step is to respond empathetically. Many people confuse the concepts of sympathy and empathy, and while they are related, they are different. Sympathy is when you acknowledge another’s suffering, while empathy is when you relate to it. You can imagine if you’re the one suffering, receiving empathy would be the more powerful response.

Finally, there is taking action to solve the problem, or at the very least alleviate it when you can’t fix the cause of suffering. For example, if your employee is grieving because of losing a loved one, consider giving them more manageable tasks or even allowing them to take additional time off for their mental health.

Paying attention to the well-being of your team will result in a significantly happier, more productive…and more profitable organization. Your ability to be compassionate is a critical part of this dynamic.