Everyone wants to innovate but to truly do so, empathy must be a critical pillar of your strategy. Scott Nelson of Tamarack Technology and Sean Scampton of Leasepath look at three areas in which empathy is crucial to innovation in equipment finance.
EDITOR’S NOTE: Article originally appeared in the Vol. 48 No. 6 2021 edition of the Monitor. Please give a click to support their efforts!
“Empathy makes you a better innovator”
– Satya Nadella, CEO of Microsoft
Empathy has long been recognized as the foundation of the innovation process. Leaders like Satya Nadella facilitate empathy in their cultures because they know it will, in turn, foster a culture of innovation. Ignoring empathy risks customer apathy and business failure. Indeed, designers will tell you that a lack of empathy leads to assumptions that identify problems that don’t exist and solutions that nobody needs.
Empathy has often been a challenge for business leaders in industries like manufacturing and financial services, which stress cost controls and efficiency as a competitive advantage. Part of the challenge is the canonical definition most often used by optimizers: “Empathy is the ability to understand and share the feelings of another.” Yikes! Feelings are both expensive and subjective, making them seem not very useful in continuous improvement practices. Thus, empathy goes on the shelf with other “soft” business practices.
But innovators use a different definition for empathy. IDEO has been recognized as one of the most innovative companies over the past 50 years and the founder of design thinking practices. The company defines empathy as “the ability to be aware of, understanding of and sensitive to another person’s feelings and thoughts without having had the same experience.” This is important for innovation because it focuses attention on understanding the customer experience, which enables IDEO to build products people want to experience.
Empathy enables innovation, and sharing experiences with customers is empathy. These two tenets lay the foundation for understanding how digital technology can expand a company’s ability to be empathetic and thus be more innovative. Digital tools extend our ability to share experiences beyond the physical and proximal. They also enable virtual experiences for both observation and sharing. Zoom, texting, video observation and activity tracking are all part of the digital ecosystem and can be use in the practice of empathy.
Let’s look at three areas of interest in equipment finance today in which digital technology can enhance empathy and facilitate innovation.
DIY with Empathy Empowers Customers
One of the hottest topics about the equipment finance experience for customers, vendors and funders is the use of portals. Portals are basically a do-it-yourself (DIY) solution for various parts of the financing workflow. DIY has great value in technology application because it provides convenience and empowerment to customers while automating workflow for providers. Leasing is an industry that is heavy on information and data while also being heavily regulated. DIY is hard. DIY leasing is not like retail where the same DIY check-out kiosks can work at both Home Depot and Lowes. Every lessor has their own approach to these offerings, the onboarding workflow and customer service. Sure, there are key building blocks, but lessors don’t just buy a portal and hook up customers for originations, bookings and payments.
DIY is an innovative space because it requires customers to change their behavior. DIY is hard because it requires deep empathy to design an experience that is not just easy but intuitive while also being both custom and comprehensive for the lessor. The good news is digital technology helps with the empathy in DIY experiences. Every click or touch is recorded and tracked. Every misstep can be caught and corrected. Customer interactions are real-time and continuous, so artificial intelligence agents can learn from the experiences of customers as they occur and then adjust for the next time.
Workflow Innovation is Not Just Automating the Present
Workflow and operational efficiencies are continual focuses of equipment finance companies because they drive the time, effort and cost of doing business. A variety of workflow automation solutions serve the industry today, with most developed within the context of how a business operates and the end-customer’s journey. But context is not enough. Empathy is a key to workflow innovation because, again, the focus of the effort is to change the behavior and experiences of the people executing the workflow. To do that, we must find ways to understand and share their experiences without literally “walking in their shoes.”
Steve Jobs once said, “You’ve got to start with the customer experience and work back toward the technology.” The same is true for workflow automation: The effort must start with empathy for users and then drive back to the technology implementations that address user needs. As stated earlier, traditional automation solutions have brought technology to the existing context of operations. But an empathy-first process will often show that an existing operational context does not support the more dynamic and intelligent customer experiences necessary for true innovation.
The key to innovating in workflow is taking the opportunity to reevaluate core business processes from the ground up and to explore how those practices benefit or hinder both the user and the customer served. Workflow improvement needs an intelligent design that can only be achieved when driven by empathy for natural human thinking implemented with dynamic technology. When a method “patches holes” in an existing business process with accessible digital solutions, it can extend poorly constructed workflows and can even increase user frustration because they need to learn new technologies without desired productivity gains.
Fortunately, user experiences today are taking place digitally, so developers can apply empathy to workflow processes with both proximal and remote methods. Understanding when and why customer service shifts from an automated encounter to a direct one with a live representative, for example, can be experienced remotely via the data streams of a system. We can then leverage modern data analysis to measure customer behavior more accurately and efficiently. This identifies frictions and slowdowns in customer experiences and also measures compliance with an expected workflow, giving an indication of customer satisfaction.
Relationships Live on Trust Built with Empathy
Relationships build trust and trust is necessary to complete transactions. Traditionally, we have fostered trust with face-to-face interactions and handshakes that effect and communicate empathy. But face-to-face is hard to scale. Digital can scale, but trust is even more critical in the digital world because every time a customer enters a credit card or a piece of personal information into an online transaction, it is an expression of trust with that digital partner as well as an evaluation. Trust is still built one transaction at a time in a digital world but exponentially faster and more broadly because of the mobility of digital experiences.
Digital relationships, like personal relationships, are curated and managed with the same tools with which they are created. This is the opportunity for digital technology to implement empathy through digital channels that extend relationships both geographically and functionally. A digital relationship can be automated and decentralized. Digital systems do not have the geographic constraints of face-to-face interactions. Digital communications can be synchronous or asynchronous. DIY tools can “listen” to customer needs 24/7 and provide unrequested solutions that demonstrate empathy for a customer’s journey when needs are identified. Modern Internet of Things technology can help lessors watch how and when equipment is used and then provide adjustments to contracts and/or fleets in a way that serves customers better. All of these digital tools can provide new methods of practicing and communicating empathy with customers. Plus, digital empathy can deepen and scale an organization’s relationships in ways that traditional methods cannot.
“It’s not the strongest of the species that survive, not the most intelligent, but the ones most responsive to change.”
– Charles Darwin
The fundamental role of empathy in innovation is not changing, but the tools we use to empathize with customers and employees are. Those who can learn and adapt in times of change will survive. Business leaders and designers alike must look past the view of empathy as a “walk in their shoes” sharing of feelings and move to the observation and recreation of user experiences using the now omnipresent digital ecosystem. Digital experiences are actually easier to transport and analyze than face-to-face experiences, but companies must engage these tools with empathy in mind if they want to innovate.
Innovation is life and empathy drives innovation. We must learn to do both faster and better in a digital world.
About the Authors
Scott Nelson is the chief digital officer of Tamarack Technology. He has more than 30 years of strategic technology development, deployment and design thinking experience working with both entrepreneurs and Fortune 500 companies. Nelson is a sought-after speaker and contributor on topics related to the Internet of Things and digital transformation.
Sean Scampton is the director of sales and marketing for Leasepath, the cloud-first CRM and LOS platform that is bringing the Intelligent Workplace to equipment finance. Sean was recently named one of the Monitor’s NextGen Leaders of equipment finance. He speaks and writes regularly on the topics of digital transformation, technology adoption, change management, and sales leadership.
About Leasepath
Leasepath is the Intelligent Workplace solution for Customer Engagement (CRM) and Origination (LOS) built exclusively for the asset finance industry; serving Banks, Independent Finance, Captive Finance and Brokers in North America and the United Kingdom. Leasepath’s SaaS solution leverages the Microsoft Power Platform to provide a proven, quick to implement, cloud-first solution with pre-built automation, pricing tools, amortization calculators, asset management, and integrations with credit bureaus and other mission critical applications. Leasepath is the preferred choice to equipment finance businesses to win more, risk less, and profit more. Learn more about Leasepath by visiting www.leasepath.com.
