Strategy needs more than intelligence. It needs empathy

Pernilla Gripenberg

Executive teams invest significant time in making strategic choices. Far less time is often spent on what determines whether those choices take hold: building shared understanding across the organisation and helping people see their place in the future direction. When that connection is missing, a gap emerges: the strategy exists, but it is not part of everyday reality.

Few strategic challenges are solved through better analysis alone. More often, success depends on leaders’ ability to view strategy through the eyes of the people expected to bring it to life. What is often labelled resistance to change may in fact be a signal that the strategy has not yet been made meaningful, understandable or relevant to people’s everyday work.

This is where empathy becomes essential. Strategy only comes alive when people can see how it connects to their work, their challenges and their aspirations. Without that connection, even the most robust strategy can feel distant from the realities of everyday life.

The question is no longer whether empathy belongs in strategy. The real question is how it can become part of an organisation’s strategic renewal capability, its ability to understand people, build shared meaning and move forward together in an environment of continuous change.

Empathy is not a feeling but a strategic leadership capability

In working life, empathy is often associated with emotions or soft values. In strategic discussions, it may be treated as something to consider only after the analysis has been completed. In reality, empathy is a core leadership capability. In a strategic context, it means understanding people’s day-to-day realities, motivations and concerns, and recognising how strategic decisions are experienced in practice. It connects organisational direction with the meaning people attach to their work.

Successful renewal requires clear roles, practices and structures that support change systematically across the organisation, rather than relying solely on individual leaders (Karasvirta, 2026). Empathy strengthens this capability by helping leaders recognise signals such as frustration, enthusiasm and uncertainty. These signals provide insight into how people are experiencing the strategy and can guide learning and necessary strategic adjustments. (Franck, Gylfe, Vuori & Vaara, 2025.)

In other words, empathy improves decision-making because it reveals real barriers and opportunities that analysis alone often fails to uncover.

This can also be seen in practice. At Finnish audio technology company Genelec, understanding customers, employees and their needs has been a central part of the company’s strategy and renewal journey from the outset. CEO Siamäk Naghian has consistently emphasised the importance of listening and understanding diverse perspectives in leadership.

This people-centred approach has also been linked to the company’s success. Today, Genelec is recognised as one of the world’s leading manufacturers of professional studio monitors and has received some of the industry’s most prestigious awards multiple times.

Microsoft’s transformation under Satya Nadella is frequently cited as another example of how empathy can support strategic renewal. The focus was not simply on defining a new strategy but on cultivating a culture that encouraged listening, learning and evolving together. During the same period, Microsoft became one of the world’s most valuable companies, attracting widespread interest in how leadership culture and business performance can reinforce one another.

The role of empathy when strategy meets change

Empathy is also a critical capability at a time when AI and automation are reshaping the nature of work. People are not only concerned about technology itself. They are concerned about whether they can see a meaningful place for themselves in the future it creates. IKEA addressed this challenge by reskilling customer service employees for new roles as AI became more widely adopted, helping people transition into new opportunities rather than leaving them behind. In doing so, the company linked people-centred renewal with the development of a significant new sales channel.

The value of empathy becomes clearest when strategy enters moments of change: renewal, transformation, growth or restructuring. In these moments, people need more than direction. They need to understand why the direction matters, what it means for them and how they can contribute to it.

What happens when empathy is missing from strategy?

Finnish organisations have many strengths that can support empathetic strategy work: low hierarchies, high levels of trust and a strong culture of participation (Khoreva & Tasanto, 2025). These qualities create a good ground for renewal, but they also raise expectations. When people are invited to contribute, they also expect to be heard and understood.

Renewal does not happen around a planning table. It happens through collaboration, continuous learning and the shared interpretation of what a strategic direction means in practice (Khoreva & Tasanto, 2025). Co-creation requires empathy because people need a common language for discussing what is changing, why it matters and how the organisation can move forward together.

The organisations that succeed in renewing themselves are not necessarily those with the greatest resources, the most data or the most advanced technology. They are the ones that can translate strategy into something people understand, trust and feel able to contribute to.

At the same time, empathy is not without risk. Poorly managed, it can contribute to emotional overload, decision-making bias or perceptions of unfairness. That is why empathy should not be understood as a purely emotional trait, but as a sensemaking capability: one that helps leaders and employees interpret each other’s realities more effectively. As a result, strategic conversations become less about opposition and more about creating shared meaning.

Ready to close the gap between strategy and execution?

Empathy is not an alternative to strategic thinking. It is what enables strategy to become meaningful, actionable and sustainable.

If your organisation is looking to strengthen its capacity for renewal and bring people closer to its strategic direction, Hanken & SSE can help you create the leadership capabilities, shared understanding and practical momentum needed to move forward together. Let’s continue the conversation.

Author

Pernilla Gripenberg

Pernilla has over twenty years of experience in business education and leadership development, from basic to MBA and executive levels. She has co-designed some of the most innovative leadership development programmes together with Hanken & SSE’s clients and is a highly appreciated programme director and facilitator. Her areas of expertise include self and people leadership, change leadership, communication, organisational culture and cross-cultural communication, grounded in insights from positive psychology and neuroscience.

Sources

Ibarra, H., Rattan, A. and Johnston, A. (2018) Microsoft: Cultural Transformation.

Elinkeinoelämän keskusliitto (2023) Kaikkien työelämä: Genelecin toimitusjohtaja Siamäk Naghian pohtii: Miten kehittää innovaatioympäristöä niin, että ”jokainen saa olla minä”? Saatavilla: https://ek.fi/ajankohtaista/uutiset/kaikkien-tyoelama-genelecin-toimitusjohtaja-siamak-naghian-pohtii-miten-kehittaa-innovaatioymparistoa-niin-etta-jokainen-saa-olla-mina/

Fortune (2026) Inside Ikea’s big bet on humans in the age of AI, Saatu: https://fortune.com/2026/07/30/ikea-ai-workforce-reskilling-jobs-billie-chatbot-global-500/

Franck, H., Gylfe, P., Vuori, T. and Vaara, E. (2025) ‘Middle managers’ regulation of the emotions of others in strategy implementation: A process perspective’, Journal of Management Studies. Available at: https://doi.org/10.1111/joms.70027.

Karasvirta, T. (2026) Organising for planned change: Change organisations and organisational change capability. University of Turku. Available at: https://www.utupub.fi/handle/10024/194961

Khoreva, V. and Tasanto, M., (2025) Strategic Renewal 2025 study - Future making in a world where normal no longer exists. Hanken & SSE Executive Education & Hanken School of Economic. Available at: hankensse.fi

Medium (2024) Case Studies: Successful Leaders Who Prioritize Empathy, saatu: https://patildilip23.medium.com/case-studies-successful-leaders-who-prioritize-empathy-3bf1814fcbd1