Webb highlighted the need for change at the Economist Talent Summit in London this week.
He said it would help overcome the "sea of sameness" that has affected the sector in recent years, with some hotel groups offering the same standardised and uniform service.
Webb also said staff are expected to operate in the same "limiting frameworks".
In his key note speech he outlined how Hyatt has introduced systems for engaging and listening to each of its 95,000 associates, in an effort to develop better leadership, a stronger workforce and improve business performance.
Webb said: "Empathetic leadership boils down to a desire to understand more than what your own experience tells you.
"We don't put a wall between the experience of our guests and our associates – it's equally important that we listen to both. If you don't listen to your workforce, you'll never win with your guests.
"This kind of leadership requires trust. If a guest has a problem in Beijing, we in Chicago trust that our colleagues have the training, expertise and local knowledge to do a good job in solving it.
"People don't have scripted needs, so we don't want scripted answers. Giving our associates these freedoms mean they drive innovation from the bottom up, particularly in our 'lab' hotels where we test out new ideas."
He added: "We don't want to be the biggest hotel chain, we want to be the best. To do that we need to understand from our associates all over the world what works. As the innovation guru Tom Kelley of IDEO said, 'Don't watch the blur of people – watch the one'.
"Success comes from the build-up of many thousands of individual achievements every day. That's why empathetic leadership is so important."
Watch out for a full in-depth profile with Robb Webb this month on hrmagazine.co.uk
