Empathy Is Growth

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More important, Halo helped define the Xbox as the must-have console for hard-core gamers, which helped it surpass Sony as the market leader with the follow-up Xbox 360.

Lack of Empathy Leads to Zune Swoon

Xbox was so successful that Microsoft tried a similar approach when Apple's iPod became the best-selling portable music player since the Sony Walkman. Microsoft even brought over some of the same leaders and developers, hoping they could do to Apple what they had done to Sony. On an incredibly tight deadline, the team threw its collective might behind an iPod-killer. What emerged in late 2006, however, barely dented Apple's armor. The Zune was a boxy gadget that looked like a thicker iPod, albeit in a not-so-stylish brown case. As one acid-tongued reviewer described it, the overall experience of using a Zune was about as pleasant as having an airbag deploy in your face. Not surprisingly, the Zune managed to sell about 2 million units in its first 18 months on the market. Apple sold more than 84 million iPods during that same period.

Why was Microsoft able to create such a compelling video game system only to churn out a mediocre portable music player? The competitive context was the same. The research was similar. The design and engineering resources brought to the challenge were significant in both cases. What makes a company deliver a bravura performance one day and fall flat the next? Empathy. As one member of the team confided: "The biggest challenge with Zune was trying to figure out who we were building it for. With Xbox, we knew those guys. Hell, we were those guys."

Unfortunately, that empathy wasn't transferable. A brilliant connection with hard-core gamers didn't prepare Microsoft for the challenges of understanding Zune's market space. Being a reflection of one type of customer is certainly a quick and easy way to connect with a particular group of people. But to thrive over the long term, organizations need to move beyond their own views and discover what's happening in the rest of the world. They don't need to just hire their customers. They need to develop a genuine interest in people outside their walls.

Especially in a recession, empathy is one competency that companies can't afford not to develop. It can help them to move quickly, make better decisions, and create businesses that can fuel their growth. It can secure the future of their organization. And it can all start with a walk in someone else's shoes. People are wired to care. Isn't it time that companies were, too?

Dev Patnaik is founder and chief executive of Jump Associates, a growth strategy firm in San Mateo, Calif., whose clients include Nike, Target, and Hewlett-Packard. He is also the author of Wired to Care: How Companies Prosper When They Create Widespread Empathy.