A Global Study of 5,000 Companies Found Being a Great Leader Boils Down to These 7 Words 

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Some leaders are introverts, others extroverts. Some unassuming, others swashbuckling. Some make their names as savvy day-to-day operators, others as visionaries with their eyes on the distant horizon.

With all this variety, you could be forgiven for concluding that there’s no set way to do leadership right, that what makes a great leader is as individual as the person at the top of the org chart. That’s an understandable conclusion but also a wrong one. While leaders differ greatly in many respects, according to a new study from consultancy Potential Project that examined 5,000 companies in nearly 100 countries, all the best ones share one essential trait.

Wisdom + compassion = exceptional leadership

After two years of pandemic disruption, many workers are exhausted. At the same time, many businesses are under intense pressure after such a long period of uncertainty. Employees are in need of compassion at just the same time as many managers must focus on the bottom line. It’s not a comfortable place to be for leaders, and surveys are reflecting this fact.

“In our recent worldwide survey of 300 senior business leaders across industries ranging from hospitality to automotive to biotech, 61 percent reported that they’re struggling to balance employees’ need for support with their company’s drive for high performance,” a pair of business professors from Insead and Harvard recently reported, for instance.

When compassion and performance seem to be at odds, which should leaders focus on? According to the authors of the new Potential Project study, the answer to this question is what sets great leaders apart from mediocre ones. The research shows the best leaders refuse to compromise on either.

“We distilled the analysis into two key traits: wisdom, the courage to do what needs to be done, even when it is difficult; and compassion, the care and empathy shown toward others, combined with the intention to support and help. Both traits are important, but when they are combined, there is an exponentially higher impact on important metrics,” three of the researchers behind the study explain on HBR.

They sum up this essential quality of great leadership in just seven words: “doing hard things in a human way.”

Leaders who combine these two essential skills perform markedly better than those who don’t. “For example, job satisfaction is 86 percent higher for an employee who works for a wise and compassionate leader than an employee who does not,” they write. On teams with wise and compassionate leaders, burnout is 64 percent lower, performance 20 percent higher, and engagement 53 percent greater.

Doing hard things in a human way

The complete Potential Project write-up digs deep into gender differences among leaders (turns out women are much more likely to combine wisdom with compassion), and also offers a link to an assessment that will give you some idea of whether you’re leading with wise compassion.

These resources are worth a look, but the first and most important takeaway from this research is that the best leaders refuse to sacrifice compassion for performance. They might need to make tough choices, but they never let that reality desensitize them to the human impacts of those choices nor distract them from carrying out those tough choices in the most humane way possible. It’s a difficult balance, but the ability to strike it well is a hallmark of the very best leaders.