What 25 years of market data, workplace research and a few hard-won lessons say about leaders who lead with kindness, empathy and abundance.

Early in my career, I believed the toughest leader in the room was the one who won. I watched vice presidents command the room, and I saw managers and individual contributors work hard to keep them happy out of fear.

It took me years, and a few expensive lessons running multimillion-dollar businesses, to accept what the evidence now says plainly. Leaders who lead with kindness, empathy and a genuine belief in abundance don’t trade results for decency. Over any meaningful time horizon, they get better results.

That isn’t sentiment. It’s the scoreboard.

The market has already priced it in. Mostly.

Finance professor Alex Edmans, then at Wharton and now at London Business School, tracked the companies on the “100 Best Companies to Work For in America” list across 25 years. A portfolio of those firms earned an annual four-factor alpha of 3.5% from 1984 to 2009 and beat industry benchmarks by 2.1% a year.1 His conclusion, published in the Journal of Financial Economics, was striking: the market systematically undervalues how well a company treats its people.

The pattern has held. A 2025 analysis by Jefferies, published by Great Place to Work, found that the 100 Best Companies have cumulatively outperformed an equal-weighted S&P 500 by more than 2,000% since the list began in 1998.2

Treating people well isn’t a cost line. It’s an asset your balance sheet doesn’t show, until it shows up in your returns.

Empathy is a performance tool

In a 2021 Catalyst survey of nearly 900 U.S. employees, 61% of people with highly empathic senior leaders reported being innovative at work, compared with 13% of those whose leaders were less empathic. Engagement showed the same split: 76% versus 32%.3

The cost of getting it wrong is just as measurable. Businessolver’s 2025 State of Workplace Empathy study surveyed more than 3,000 CEOs, HR professionals and employees. It found that 45% of employees at unempathetic organizations call their workplace toxic, against 14% at empathetic ones, and 54% of employees at unempathetic organizations say they are likely to change jobs within six months.4

One more number from that study should stop every executive reading this. Only 8% of CEOs describe their workplace as toxic, while 22% of employees do.4 We are often the last to know.

It lives or dies with managers

Gallup estimates that managers account for roughly 70% of the variance in team engagement.5 Its 2025 State of the Global Workplace report found global engagement fell to 21%, and manager engagement dropped from 30% to 27% in a single year, at an estimated cost of $438 billion in lost productivity.6

That’s why kindness can’t live in a CEO’s values statement. It must be a manager’s daily habit. I recently replaced a long-standing operations manager whose team was struggling to deliver results. The new manager improved those results quickly. His empathetic approach and listening skills helped him align the team and earn their trust. He wasn’t overly accommodating; in fact, he was very demanding. But his open daily communication, mutual respect and commitment to developing his people unlocked the team’s determination to win. Engagement rose and turnover fell.

Abundance beats scarcity

Scarcity leadership assumes credit is finite, talent must be hoarded and a peer’s win is your loss. Abundance leadership assumes the opposite: grow other people and the pie grows with them.

Microsoft is the clearest case I know. When Satya Nadella became CEO in February 2014, the company was worth just over $300 billion.7 He set out to move the culture from “know-it-alls” to “learn-it-alls,” ended the internal turf wars and partnered with former rivals, putting Office on the iPad and embracing Linux on Azure. By August 2026, Microsoft was valued at about $3.74 trillion.8 Strategy and timing did heavy lifting. But it was the culture shift that let the strategy move.

Costco makes the same argument in a low-margin business. While competitors treated hourly pay as a cost to minimize, Costco raised its top-of-scale hourly rate to $30.20 and its entry rate to $20 in 2025, calling its people “the very best in the retail industry.”9

Adam Grant’s research adds an important nuance. In Give and Take, he shows that “givers” show up at both the bottom and the top of most performance metrics.10 The ones who burn out give without boundaries. The ones who rise are what he calls “otherish”: generous, but deliberate about whom they help, how and when. Abundance is not naïveté. It’s generosity with a strategy.

Care is a safety discipline

When Paul O’Neill took over Alcoa in 1987, he told investors his first priority was worker safety, not profit. Some told their clients to sell. By the time he retired in 2000, Alcoa’s annual net income was five times higher, its market value had risen by $27 billion, and its lost-time rate had fallen to about one-third of the U.S. average.11

Google reached the same conclusion from the other direction. Its Project Aristotle studied 180 teams and found that psychological safety, the confidence that you won’t be punished for speaking up, was the single most important factor separating its best teams from the rest.12

In my corner of the world, MRO and defense aviation, this is not abstract. A technician who is afraid to tell a supervisor they’re unsure about a torque value doesn’t have a culture problem. They have an airworthiness problem. On a hangar floor, kindness is what makes people speak up before the aircraft leaves.

The honest caveat

Kindness is not a substitute for strategy. Southwest Airlines, built by Herb Kelleher on an employees-first philosophy, put together decades of consecutive profitability and a long record of never furloughing its people.13 Yet in February 2025, under financial and activist pressure, it announced the first layoffs in its history, about 15% of its corporate staff.14 Culture compounds, but it can’t outrun a business model that has stopped fitting the market.

Empathy without accountability also curdles into avoidance, what Kim Scott calls “ruinous empathy.”15 Kind leaders still make hard calls. They just make them early, honestly and with dignity.

What it looks like on Monday morning

  • Ask before you assume. Hold skip-level conversations and ask, “What’s getting in your way?” Then fix one thing people can see.
  • Give credit in public; own failure in private. Nothing signals abundance faster.
  • Measure it like you mean it. Track regretted attrition, engagement by manager and voluntary safety reports, not just output.
  • Hire and promote for it. In every executive search I run, I ask candidates for evidence that people they developed went on to outgrow them. At Apogee, it is one of the key indicators I use when screening seasoned leaders.
  • Deliver hard news kindly. Be clear, be early and do it in person.

The leaders I most admire aren’t soft. They’re secure. They believe there is enough credit, opportunity and success to go around, and their results prove them right.

What’s the kindest hard decision a leader ever made with you? I’d like to hear it: inquiry@apogeesearch.net.

Apogee Executive Search & Advisory is an executive search and leadership-coaching firm focused on MRO and defense aviation. We help operators and MROs find, develop and retain the leaders who run them. To talk about building a leadership team people want to work for — inquiry@apogeesearch.net

References

  1. Edmans, A. (2011). “Does the Stock Market Fully Value Intangibles? Employee Satisfaction and Equity Prices.” Journal of Financial Economics, 101(3). repository.upenn.edu
  2. Great Place to Work (May 2025). “100 Best Companies Outperform the S&P 500” (Jefferies analysis). greatplacetowork.com
  3. Catalyst (September 2021). “Empathic Leaders Drive Employee Engagement and Innovation.” catalyst.org
  4. Businessolver (May 2025). 2025 State of Workplace Empathy study. businessolver.com
  5. Gallup. “Managers Account for 70% of Variance in Employee Engagement.” news.gallup.com
  6. Gallup (2025). State of the Global Workplace 2025; figures as summarized by UNLEASH and BambooHR. unleash.ai
  7. The Motley Fool (June 2021). “Microsoft Is Now Worth $2 Trillion.” See also Nadella, S. (2017). Hit Refresh. fool.com
  8. 24/7 Wall St. (August 28, 2026). “Prediction: Microsoft Could Be the Next $5 Trillion Stock.” 247wallst.com
  9. AP via OPB (January 31, 2025). “Costco raises pay above $30 an hour for many.” opb.org
  10. Grant, A. (2013). Give and Take. Summary: Associations Now, “Adam Grant: The Giving Revolution.” associationsnow.com
  11. IndustryWeek. “Profits Should Not Come at the Cost of Workplace Safety.” See also Duhigg, C. (2012). The Power of Habit. industryweek.com
  12. LeaderFactor. “Google Project Aristotle and Psychological Safety.” leaderfactor.com
  13. Fortune (January 2019). “Remembering Herb Kelleher.” fortune.com
  14. Fortune (February 18, 2025). “Southwest to cut 15% of corporate jobs in first-ever layoffs.” fortune.com
  15. Scott, K. (2017). Radical Candor. St. Martin’s Press.