A client of mine, Sergio, was the CEO of a software company he’d founded with four other people. He was great at strategy, product development, and the hard skills of running a successful business. At first, everything was going exceedingly well. After two years, however, the rate of employee turnover at the company had hit 25%. 

Sergio couldn’t understand why. Everyone was making money, their stock options had increased in value and revenue was projected to grow by 22% the next year. Salaries were above the industry average by nearly 5-10%. The perks were great too: Employees had plenty of time off, generous child care, and the opportunity to work from home, among other attractive benefits.

So why were people leaving the company for competitors who usually offered less in compensation and perks? It was because Sergio lacked soft skills. He was brilliant at everything else, but he just didn’t want to get too close to employees at the company. The particular skills that Sergio was lacking were the willingness and ability to open up to people and show them genuine empathy and support. He also lacked emotional intelligence (EQ), which enables a leader to understand employees’ overall well-being, not just their technical skillset or business abilities. Sergio never considered anybody’s existing workload and would pile on unrealistic goals when people were already struggling to hit deadlines. When confronted with this fact, Sergio justified his demands by saying that they were a startup, so everyone had to take on more all the time. Performance dropped, of course, as people became exhausted and were no longer able to be efficient. Many quit, which cost the company both time and money.

Ultimately, Sergio’s lack of soft skills cost him his position as CEO. Two vice presidents at the company and the people they managed pushed back on Sergio’s constant demands. They complained to the board of directors, and the board finally took action to keep more people from leaving. While Sergio remained on the board and became president of research and development, losing his position as CEO hurt plenty. His constant focus on the hard skills of the business while not challenging himself to understand his employees had seemingly capped his career.

Unfortunately, this is a common story. I’ve worked with many clients that have faced this problem, and. I’ve seen this scenario over and over again: — executives with highly developed technical and business skills who ultimately don’t succeed because of an in ability to deal with people issues.

Soft skills need to be developed. They not only require intelligence and business knowledge but also patience, compassion and the willingness to invest your time in the people that work for you. 

Leadership by definition means you’re taking people somewhere. You’re leading them to a destination. If you don’t know them — their goals, perspectives, experience — how can you align them with your team’s goals and lead them somewhere?

Successfully leading involves making a personal investment in people. Have you ever noticed that when you take the time to acknowledge someone for their good work, they light up? It isn’t part of a performance review or anything official like that; it’s you simply making the effort to acknowledge someone’s work without asking for anything in return.

Money isn’t the only thing that drives people at work.  Most want acknowledgment as well. That was one of Sergio’s main issues — he never acknowledged anyone’s work. His thinking was that they were getting paid better than others, so what else was needed?

How does a leader develop the soft skill of acknowledging their employees, especially when it’s new to them?

The first step is to get to know them. I’ve advised numerous managers— and especially senior executives, to spend 20 to 30 minutes a day either walking the floor or dropping by work stations and simply asking people how it’s going.

Then, let them talk, and listen. At first, they may say very little, but if you keep it up, you’ll likely get a lot of benefit from it. First, employees will start to feel that they’re being heard and supported by you, which can help prevent employee churn. Second, you can get incredibly valuable information in real time instead of waiting until an issue or problem reaches you through multiple layers of management. 

Often, employees can get help they need to solve an issue and successfully complete a task faster. This can save your company time, energy and money.

Another benefit of listening to your employees is that it enables you to have more effective relationships with the managers who report to you. By acknowledging employees, you can gain a much clearer understanding of problem areas, lack of technical skills and morale. Then when you interact with managers, you’re more informed and able to support them in solving these issues with their teams. A word of advice, though: Let managers know in advance that you’re asking their direct reports how they’re doing so they won’t feel circumvented by their boss.

Another effective way to acknowledge your people is to tie overall company goals directly to their individual efforts. This is a great way to let them know how valuable their work is to the entire company. Learn from their managers any challenges they overcame to accomplish a task, and then tell them you appreciate their perseverance.

By developing soft skills like acknowledging your employees, you can deliver tangible results as a leader. For Sergio, working on his soft skills for four months helped him land a new leadership role as president of the company. He now has over 500 people reporting to him.