Why CEOs Must Mind Their Mindset (Plus, Ways to Improve Your Outlook Now)

Why CEOs must maintain a healthy mindset

By far, the number one reason your mindset matters is because you matter. As an individual, your mental health is worth the effort. But as a CEO, there are other important reasons for you to take care of yourself mentally:

The team will follow your lead

A study published in the Applied Journal of Psychology found thatteams under a positive, optimistic CEO:

  • mirrored the leader’s positive mood
  • used less negative affective tones
  • expended less energy to achieve the same work
  • experienced better-coordinated collaboration

The same study, titled “The Contagious Leader,” concluded that the effect does not move in reverse. In other words, happy workers don’t typically influence their CEOs positively.

“High-status individuals are more likely to transmit their moods to low-status individuals than vice versa,” state the analysts.

Tragically, when a CEO becomes depressed or experiences low moods, their staff mirrors those emotions. In a pertinent paper titled “When the Boss is Blue,” experts at Griffith University and Australian National University affirm that superiors unintentionally and unthinkingly “infect” their subordinates with their low moods. The result is that lower-level associates subsequently experience those feelings themselves.

“CEOs are hired for their intellect and business expertise—and fired for a lack of emotional intelligence.”

–Daniel Goleman, PhD (author of New York Times bestsellerEmotional Intelligence: Why It Can Matter More Than IQ)

The business will follow your lead

If you’re chronically tired, trepid, and dreary, then your business will project that outward. Partners, investors, and customers will pick up on the gloom.

In fact, no other emotional expression can cripple a venture like depression in a CEO: Experts at William and Mary Law School say that a CEO’s narcissism, over-optimism, fear, and even anger are often used tobenefit the business. But “unlike the four other CEO pathologies, nothing good is likely to come from CEO depression.”

For a real-life example, consider Elizabeth Holmes, the Theranos founder whose now-defunct company was predicted to revolutionize the medical industry. Herdepressive mental state was so confusing that customers and investors were conflicted—industry insiders couldn’t decide whether to invest in the company or charge her with fraud.


Elizabeth Holmes with President Bill Clinton and Alibaba co-founder Jack Ma

Image Source:Business Insider, Andrew Burton/Getty Images via Vanity Fair

For a version of the same phenomenon from the opposite end of the spectrum, recall Alan Mulally, who became CEO of Ford Motor when it was near bankruptcy. Mulally turned the business around using what he calls “positive leadership.” The company has beenprofitable every year since.

CEO Mary Barra achieved a similar feat for General Motors based on realistic positivity that acknowledged challenges while embracing opportunity.

“Usually, the glass is three-quarters full,” she recently toldDuke University business students.

What happens when CEOs get (and stay) discouraged

Allow yourself to sink and stay down, and you’ll start seeing some immediate adverse effects.

For example, have you ever felt your depression impact yourdecision-making? If so, you’re not alone. CEOs who experience fear, anxiety, and low moods can make direction changes based on gut feelings instead of their usual north star—data, expert input, trends, peer advice, and astute observation. This is especially true today when no precedent has been set, and we’re all simultaneously figuring out how to lead amid the unique volatility. Unfortunately, any mistakes we make when we’re down can force our businesses to make subsequent, equally unreliable over-corrections to attempt some form of order.

A CEO who doesn’t prioritize their mental health may soon notice their company’s financials start to reflect their mindset. This measurable phenomenon is called presenteeism. Presenteeism is the financial losses incurred by workers (and executives) who are hurting while on the job. If a leader’s moods are affecting the whole team, these losses will begin to show on paper. In fact, the National Alliance on Mental Illness of Massachusetts (“NAMI Mass”) says that presenteeism costs businessesmuch more than absenteeism.

The number one cause of presenteeism? Depression. In fact, the NAMI Mass report says that presenteeism accounts for 81% of all lost productivity time. Physical ailments and injuries account for less business “wastage” than discouragement and depression in leaders that insist on showing up without a healthy mindset.

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