A boss’s mood doesn’t just affect them—it shapes the entire workplace. When leaders are happier, their employees tend to be happier too, and that boost in well-being can directly improve a company’s profitability and market performance.
That’s the core message from Arthur C. Brooks, a Harvard professor who teaches happiness and leadership at both the Harvard Kennedy School and Harvard Business School. Speaking at Harvard Business School’s Klarman Hall during a live episode of the HBR IdeaCast, Brooks emphasized that “happier employees are more profitable, more productive employees. That’s just the way it is. If you can have a happier workforce, you’re going to have a better company.”
Brooks—also a bestselling author and co-author of Build the Life You Want with Oprah Winfrey—argues that leaders who prioritize their own happiness quickly learn that it is “a really, really good investment.”
The business case for happiness
Brooks pointed to research by Irrational Capital, a Wall Street firm he advises, which analyzed data from 7,500 publicly traded companies—including the entire S&P 500 and Russell 1000. The findings show a strong financial link between employee happiness and company performance.
“If you’re in the top 20% for workplace well-being, you’ll outperform the S&P 500 by about 520 basis points in stock price over the past year,” Brooks said. “This stuff really performs.”
Separate research from the University of Oxford confirms the trend, showing that even a one-point increase in employee happiness scores correlates with billions of dollars in added annual profits.
What workers actually want
Many companies, Brooks argued, misunderstand what truly drives employee satisfaction. When asked how to improve well-being, workers often default to perks—“a ping-pong table,” “avocado toast”—because they know they’re unhappy but can’t pinpoint why.
Brooks says the deeper issue is leadership disconnection. Stressed or isolated bosses—a common experience for new CEOs—struggle to create the psychological safety employees need. And when leaders are unhappy, emotional contagion ensures their teams feel it too.
“The number one predictor of somebody hating their job is a bad boss,” Brooks said. “If you’re the boss, you can ruin the workplace very, very quickly.”
According to Brooks, employees consistently want four things:
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Genuine friendships at work
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A sense of empowerment and growth
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Managers who truly listen
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Efficiency—fewer unnecessary meetings and less wasted time
The leadership trap
Ambition naturally pushes people to climb the corporate ladder, but Brooks notes that the top two emotions CEOs experience in their first two years aren’t pride or excitement—they’re loneliness and anger. About half of CEOs report feeling isolated, and 70% of first-time executives say loneliness hurts their performance.
“Your ancient limbic system says, ‘climb for the brass ring,’” Brooks explained. “But a lot of leaders get there and discover they don’t actually like it.”
For Brooks, that’s why leadership training must start with a simple goal: helping managers become happier people.
“That’s the number one predictor of being a good boss,” he said.
He compares leadership to parenting, pushing back on the idea that you’re “never happier than your unhappiest child.” In his view, that’s bad parenting—and equally bad leadership. “Nobody wants an unhappy mother or father. And nobody wants an unhappy boss.”
“If you lead others, you have an ethical responsibility to work on your own happiness,” Brooks said. “It’s a gift to the people you’re responsible for.”