We’ll discuss the science of mood contagion in more depth later, but first let’s turn to the key implications of our finding. If a leader’s mood and accompanying behaviors are indeed such potent drivers of business success, then a leader’s premier task—we would even say his primal task—is emotional leadership. A leader needs to make sure that not only is he regularly in an optimistic, authentic, high-energy mood, but also that, through his chosen actions, his followers feel and act that way, too. Managing for financial results, then, begins with the leader managing his inner life so that the right emotional and behavioral chain reaction occurs.
Our research, and research by other social scientists, confirms the verity of these experiences. (There are, of course, rare cases when a brutal boss produces terrific results. We explore that dynamic in the sidebar “Those Wicked Bosses Who Win.”) The studies are too numerous to mention here but, in aggregate, they show that when the leader is in a happy mood, the people around him view everything in a more positive light. That, in turn, makes them optimistic about achieving their goals, enhances their creativity and the efficiency of their decision making, and predisposes them to be helpful. Research conducted by Alice Isen at Cornell in 1999, for example, found that an upbeat environment fosters mental efficiency, making people better at taking in and understanding information, at using decision rules in complex judgments, and at being flexible in their thinking. Other research directly links mood and financial performance. In 1986, for instance, Martin Seligman and Peter Schulman of the University of Pennsylvania demonstrated that insurance agents who had a “glass half-full” outlook were far more able than their more pessimistic peers to persist despite rejections, and thus, they closed more sales. (For more information on these studies and a list of our research base,