How Leaders Help Teams Manage Stress

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STRESS HAS BECOME a defining feature of modern organizational life. When channeled constructively, stress can act as a powerful motivator — fueling productivity, innovation, and change. Conversely, unmanaged stress can breed dysfunction, lower morale, and lasting psychological harm. Yet most organizations still lack systematic approaches for managing stress across teams.

To address this gap, we launched a multiyear study of leadership and employee behavior that focused on organizational politics and psychological safety. Our research combined structured interviews, case analyses, practitioner insights, and a survey of more than 150 senior business leaders across Europe, the Asia-Pacific region, the Middle East, and the United States. Our findings are both encouraging and sobering. We learned that most workplace stress is episodic and manageable with proper support, but a troubling pattern emerged: Leaders — tasked with modeling resilience — often amplify stress instead. Rather than easing pressure, their behaviors frequently intensify it, undermining team cohesion and performance.

A striking example comes from a professional services firm where employees initially coped well with typical pressures like divorces, car repairs, deadlines, and office politics. That balance shifted with the arrival of a new unit director. Aiming to boost productivity, he introduced few procedural changes but brought a leadership style that some employees described as “highly toxic.” His controlling, confrontational approach eroded trust. Personal stress became harder to compartmentalize as the work environment grew volatile. Absenteeism rose, engagement fell, and some employees left meetings in tears.

Instead of adjusting his leadership style, the director doubled down, likely influenced by his own burnout and assumptions of team underperformance. Public reprimands became routine, and within 18 months, 75% of the team had resigned. Many sought counseling to recover from the emotional toll. The CEO eventually stepped in and terminated the director — a move widely seen as a necessary reset.

Some of you have encountered a leader like this, or perhaps you’ve seen similar tendencies in yourself at times. The good news is that leadership doesn’t have to amplify stress. With the right approach, leaders can redirect both the pressure they generate and the strain their teams carry, turning stress into a source of momentum rather than burnout.

How Stress Affects Engagement

Many leaders perceive stress as a personal issue that employees should manage on their own. Some interpret an inability to handle it as a reflection of individual weakness. Too often, leaders also believe that employees can and should compartmentalize stresses related to their personal lives. These leaders focus narrowly on work performance outcomes and metrics.

But that is short-sighted, given that emotional engagement is foundational to employees’ capacity to create long-term value. When employees are emotionally engaged, they don’t just complete tasks; they invest their full selves. They bring energy, commitment, and creativity to their roles. These individuals consistently go the extra mile, not out of obligation but from a genuine desire to contribute meaningfully. As one quality control supervisor at a global food company shared, “Sometimes when I am at work, I get absorbed in my job. I get laser focused on the task at hand and lose all track of time. It’s in those moments I can’t imagine a happier place to be than at work.”

However, emotional engagement is fragile — and stress is one of its most powerful influences. Well-managed stress can heighten employees’ focus and energize them, deepening their connection to the work. But chronic or overwhelming stress depletes people’s emotional reserves. Our research identified three key factors that determine how stress shapes emotional engagement:

Intensity. The degree to which stress affects engagement depends on its severity as experienced by an employee. Leaders often misjudge the full range of stressors employees face, fixating on workplace demands while overlooking personal pressures like financial worries, interpersonal conflicts, health issues, or caregiving responsibilities.

Perspective. Personality, goals, and values all influence whether stress is experienced as motivating or paralyzing. For instance, the pressure of long hours may feel worthwhile to someone chasing a promotion but burdensome to someone juggling certain family obligations. Organizational decisions — such as closing down an office or disciplining a toxic colleague — can also spark divergent reactions, relieving some people while unsettling others.

Capacity. Some people thrive under pressure, using it to fuel innovation and performance. Others become overwhelmed, leading to burnout. Life experience, personality, genetics, and support systems all play a role in determining stress resilience.

As we’ll explore later, leaders can shape, but not fully control, each of these factors.

Fight Versus Flight at Work

In a healthy environment, most employees typically operate within a band of high functionality — a zone marked by emotional engagement, cognitive focus, and strong alignment with responsibilities. Within this band, performance is optimized: Employees are attentive, energized, and productively immersed in their work.

As shown in the graphic below, emotional engagement fluctuates over time, influenced by both individual experiences and broader workplace dynamics. A team member might feel disconnected after a difficult interaction but later become fully engaged when tackling a meaningful project.

High stress — whether driven by major challenges or the cumulative weight of minor pressures — intensifies both ends of the engagement spectrum.

Fight mentality. During overwhelming stress, some employees double down on performance as a coping mechanism. They become intensely work-focused, often at the expense of their personal well-being. Obsessive tendencies emerge: They fixate not only on their own output but also on the perceived shortcomings of colleagues. Traits such as impatience, time urgency, perfectionism, and hypercompetitiveness dominate their behavior. Sleep is often disrupted as their minds remain locked on work-related challenges. As one senior marketing executive shared, “I am tired, but it’s as if I can’t switch my thinking off. I spend my night in bed trying to see ways I can get my colleagues to understand that they are wrong or lazy. It makes me so angry.”

Neurologically, elevated stress triggers the release of cortisol — a hormone linked to emotional dysregulation, reduced impulse control, and heightened aggression. This biological shift often manifests in a “fight” response: interpersonal tension, combative communication, and a general breakdown in team cohesion. Unfortunately, this behavior tends to alienate colleagues, prompting them to withdraw or disengage. The result is a negative feedback loop for the team: Conflict escalates, collaboration declines, and overall stress intensifies.

Freeze mentality. Other employees adopt a “freeze” response to stress — withdrawing from meetings, staying silent in discussions, and disconnecting from workplace interactions to reduce their own mental pressure. While this disengagement may serve as a short-term coping mechanism, leaders and colleagues often misread it as apathy, further isolating the employee and intensifying their stress.

Clinical studies link chronic stress to disruptions in serotonin and other mood-related neurotransmitters that can trigger sullen or withdrawn behavior. As these individuals become harder to reach emotionally and socially, colleagues may stop engaging, deepening the employee’s feelings of hopelessness. Like the fight response, freezing can become a self-reinforcing cycle — eroding collaboration, diminishing team morale, and fueling organizational dysfunction.

The Traumatized Workplace

It’s normal for employees to cycle through temporary fight or freeze responses, perhaps several times a year. Most people self-correct during these brief periods of strain, without lasting harm. But when stress becomes chronic, those fleeting reactions can harden into something deeper and more damaging: trauma. Sustained high levels of perceived stress overwhelm people’s emotional resilience, degrade their coping mechanisms, and accelerate a downward spiral.

Over time, chronic stress corrodes focus, collaboration, and trust — leading to visible declines in both individual and team performance. These patterns are rarely random. When they surface across a unit, they almost always can be traced back to a dysfunctional leader: someone whose actions, inactions, or leadership style intensify rather than alleviate pressure. Employees caught in such dynamics often feel powerless and isolated. When their calls for help go unanswered, the result is predictable: burnout, emotional withdrawal, and disengagement. Even when they remain on the job, they are no longer fully present. Without support, their well-being deteriorates and the emotional toxicity can quietly ripple outward, undermining the broader culture.

In virtually every organization we studied, we found some lingering trauma rooted in the behavior of a current or former leader, often stretching back years — even decades. While it’s often said that time heals all wounds, healing in the workplace usually comes only when the wounded leave, taking their scars with them to their next employer. At a minimum, the stories remain behind, continuing to circulate and exerting their own quiet but corrosive force.

Leading Better Through the Stress

The effects of stress — and trauma, in particular — are deeply personal. Yet employees rarely communicate these struggles directly to their managers. Leaders may notice signs of fight-or-freeze behaviors but often fail to connect them to their underlying causes. Ironically, leaders frequently overlook their own contributions to the problem, blinded by pride, indifference, or their own unmanaged stress. To take the first step toward meaningful change, leaders must acknowledge this dynamic.

Our research yielded three key recommendations to help teams manage stress better.

1. Look in the Mirror: Leaders Set the Tone

Some leaders resemble storm chasers pursuing tornadoes — not just unfazed by the danger but drawn to the thrill. Others delay difficult strategic decisions, waiting for clarity that emerges only once the crisis is in full swing. While crises may sometimes be inevitable, leaders must avoid creating them.

Whether through emotional detachment or a lack of awareness, leaders may also be blind to the daily pressures their employees face. When performance slips, the instinct to increase pressure can backfire, amplifying stress instead of resolving it.

A toxic leader erodes trust, drives anxiety, and crushes morale. We’ve worked with organizations where entire teams were left reeling from a single destructive leader. As one newly appointed CEO put it: “I inherited a traumatized company. My predecessor ruled through fear for years, leaving only the walking wounded. The signs of burnout and abuse were everywhere. Turning that around was the hardest challenge of my leadership career.”

Leaders cannot support others without first managing their own well-being, though. While stress is part of leadership, many respond with counterproductive coping strategies — aggression, control, emotional withdrawal — that destabilize the team and make it harder for people to seek the leader’s support.

Regulation starts with awareness: Avoiding reactive interactions and setting boundaries around draining relationships can help leaders preserve energy and increase their own effectiveness. One CEO told us, “Sometimes leaders need to go slow to get there faster.” Consider engaging in these practices to manage your own stress level:

• Building self-awareness. Identify your stress triggers, and recognize how your reactions affect others.
• Adopting stress-reduction habits. Mindfulness, exercise, and reflection can keep emotions in check and prevent stress contagion.
• Seeking support. Take time to engage with peers, mentors, or coaches to gain perspective and reduce your isolation.

Self-regulation isn’t just a personal skill: It helps create a healthier, higher-functioning workplace.

2. Help Others to ‘Expand the Band’

No leader can optimize all of the stresses affecting an organization. There are simply too many variables. Supporting employees in expanding the band of functionality means building their ability to navigate the stressors they will encounter.

This doesn’t eliminate stress, but it helps people remain emotionally connected and engaged, even as pressures mount. To that end, leaders should help employees do the following:

• Strengthen coping skills. While these skills evolve over years and are influenced by personality and genetics, coaching can be a powerful tool. Our research shows strong links between coaching and improved stress management. Effective personal coaches help employees contextualize stress, prioritize effectively, and regain a sense of control.
• Reshape perceptions of stress. Leaders can shape how employees perceive stress. Fairness, precise expectations, and clear explanations about business decisions all influence how stress is processed. When leaders communicate clearly, set achievable goals, and foster agency, they reduce unnecessary stress and improve team function.
• Address structural sources of stress. Tight deadlines and rigid systems heighten pressure and compromise decision-making. By managing systemic constraints and buffering demands, leaders can help prevent burnout and create conditions for sustained performance.

3. Prioritize Emotional Integrity and Team Resilience

Helping employees manage stress goes beyond creating a “safe space.” It requires leaders to establish a climate where emotional integrity is respected and team members are empowered to support one another. In such environments, leaders don’t just encourage people to speak up: People trust that their emotional experiences will be taken seriously and responded to constructively.

One head of logistics at a global engineering firm recalled how his manager’s empathy during a personal crisis left a lasting impression: “After all my boss did for me when my dad was dying of cancer, I will never leave this company. He didn’t change anything, but he was there for me.” That kind of emotional steadiness can anchor people when everything else feels unstable.

Similarly, a finance manager at a pharmaceutical company shared, “Once my boss actually listened to me, I realized I needed to talk to my team. It renewed my confidence to open up and explore ways to work more productively together. Simply being listened to helped me organize my emotions.”

Leaders don’t need to “solve” employee stress — they can validate it and foster conditions where peers provide support and collaborate on solutions. Since leaders can’t be everywhere, and hierarchies limit openness, teams should develop microclimates of trust. When team members feel responsible for each other’s well-being, it strengthens the organization’s social fabric.

Stress doesn’t have to corrode culture — it can forge it. When people utilize empathy, self-awareness, and intentional leadership, stress becomes fuel for transformation. It’s how turbulence sparks vitality and how teams evolve from merely productive to deeply connected and fully engaged.