Available February 26, 2026

Episode 015: Season 2 The Contagion Effect – How Emotions Spread Through Organizations During Change and Transformation

DURATION: 36 minutes
HOST: Kevin Novak and Elizabeth Stewart
SHOW: The Human Factor Podcast

COLD OPEN

KEVIN: A VP of operations pulled me aside six weeks into a major systems transformation. He said, “Kevin, something strange is happening. My team was fine three months ago. Engaged, collaborative, willing to learn. Now half of them are quietly updating their resumes, and the other half won’t make eye contact in meetings. Nothing happened to them directly. The transformation hasn’t even reached their department yet.”

I asked him one question: “How’s your leadership team handling the change?” Long pause. Then he said, “Honestly? Our CTO hasn’t slept in weeks. Our CFO keeps questioning the ROI in every meeting. And our CEO smiles through every town hall, but everyone can tell it’s performative.”

His team wasn’t reacting to the transformation. They were reacting to the anxiety radiating from the people above them. The emotions had traveled three levels down the org chart before a single process had changed. That’s not a communication failure. That’s emotional contagion. And it’s one of the most powerful and least understood forces in organizational transformation.

I’m Kevin Novak, CEO of 2040 Digital, Professor at the University of Maryland, and author of The Truth About Transformation, leading in the age of AI, uncertainty, and human complexity, and the Ideas and Innovations weekly newsletter.

INTRODUCTION

KEVIN: Welcome to The Human Factor Podcast. The show that explores the intersection of Humanity, Technology, and Transformation along with the psychology behind transformation success.

Today, Elizabeth Stewart and I are exploring the contagion effect and how emotions spread through organizations during change and transformation.

In our last episode, we kicked off Season Two by exploring the identity crisis of expertise, what happens psychologically when the very knowledge and skills that made people successful become the barriers that prevent them from adapting to change and transformation. We walked through the five identity threats that transformation creates for experienced professionals: competence threat, relevance threat, status threat, narrative threat, and community threat. And we introduced the Identity Transition Framework for helping people navigate between who they were and who they’re becoming.

Today, we’re asking a critical follow-up question: what happens to that identity threat and the anxiety that accompanies it once it takes hold? Because it doesn’t stay contained in the person experiencing it. It moves. It spreads through teams, across departments, and throughout entire organizations in ways that can accelerate adoption or silently destroy initiatives before they gain any traction.

Elizabeth Stewart is back with me today. Elizabeth, for listeners who may be joining us for the first time, you’ve been a recurring voice on this show exploring the human psychology of organizational change. Welcome back.

ELIZABETH: Thanks, Kevin. It’s great to be back. I think emotional contagion is the topic that explains so many of the transformation failures that organizations chalk up to other causes. They blame the technology, the timeline, the budget, the vendor, but what actually happened was that fear traveled faster than information, and by the time the initiative reached the frontline, the emotional environment had already turned against it.

KEVIN: That’s exactly right. And what makes this so dangerous is that most leaders have no idea it’s happening. They can see overt resistance. They can measure engagement scores. But emotional contagion operates beneath conscious awareness. People absorb the emotions of those around them automatically, without realizing they’re doing it. By the time you see the behavioral symptoms, the emotional infection has already spread.

Today, we’re going to cover the science behind how emotions actually travel through organizations, why transformation creates perfect conditions for negative emotional contagion, the specific patterns leaders need to recognize, and what you can actually do to manage emotional contagion rather than being destroyed by it.

Let’s start with the science.

SEGMENT 1: THE SCIENCE OF EMOTIONAL CONTAGION

KEVIN: Elizabeth, before we get into organizational dynamics, I think it’s important that we ground this in actual research. Emotional contagion isn’t a metaphor. It’s a documented psychological phenomenon with decades of research behind it.

ELIZABETH: Absolutely. The foundational work here comes from psychologists Elaine Hatfield, John Cacioppo, and Richard Rapson. Their research, published in the 1990s and validated and extended to this date, established that human beings automatically and continuously mimic the facial expressions, vocal patterns, postures, and movements of people around them. This mimicry happens in milliseconds, well below conscious awareness, and it triggers corresponding emotional states in the person doing the mimicking. So when you’re sitting across from someone who is anxious, your face begins, with subtlety, to mirror their tension, then your body shifts to match their posture, and through that physical mimicry, you begin to actually feel the anxiety yourself.

KEVIN: And this isn’t a choice. This isn’t someone deciding to feel anxious because their manager seems worried. This is neurological. The brain’s mirror neuron system, which neuroscientists have studied extensively since the mid-1990s, means we are literally wired to absorb the emotional states of the people around us. It served an evolutionary purpose. If someone in your group sensed danger, you needed to feel that danger too without waiting for a verbal explanation. The speed of emotional transfer was a survival advantage.

ELIZABETH: The problem is that the same mechanism that helped our ancestors survive predator threats now operates in conference rooms and on video calls. Sigal Barsade at the Wharton School conducted some of the most important research on this in organizational settings. Her 2002 study, which has been cited extensively in organizational behavior literature, demonstrated that a single person’s emotional state could shift the mood of an entire group. She found that positive emotional contagion improved cooperation and decreased conflict, while negative emotional contagion increased conflict and reduced cooperation. And the group members were largely unaware that their emotions had been influenced by others.

KEVIN: That last point is crucial. People don’t realize their emotional state has been shaped by someone else’s emotions. They attribute their feelings to their own assessment of the situation. A team member who absorbs anxiety from a leader doesn’t think, “I’m feeling anxious because my manager is anxious.” They think, “I’m feeling anxious because this transformation is going to be a disaster.” The emotion arrives first, and the brain constructs a rational explanation after the fact. This is what makes emotional contagion so powerful and so invisible in transformation contexts.

ELIZABETH: And the research from Nicholas Christakis and James Fowler on social networks adds another dimension. Their work demonstrated that emotional states can spread across up to three degrees of separation in social networks. You don’t have to be in direct contact with the anxious leader. If your manager’s manager’s manager is experiencing identity threat and the anxiety that comes with it, that emotional state can reach you through the chain of social connections, even if you’ve never met the person at the origin of that anxiety.

KEVIN: Three degrees of separation in a typical organizational hierarchy covers enormous ground. A CEO experiencing fear about a transformation’s success can generate emotional contagion that reaches frontline employees through multiple pathways, through direct reports, through informal networks, through meeting dynamics, through the way decisions are communicated or delayed. And each person along the chain doesn’t just pass the emotion forward. They amplify it or transform it based on their own psychology.

ELIZABETH: That amplification effect is something the research is very clear about. When someone absorbs anxiety from a leader and then adds their own identity threat or competence concerns on top of it, the emotion they transmit to the next person is often more intense than what they received. It’s not a neutral relay. It’s an escalation. Organizational psychologist Daniel Goleman’s work on emotional intelligence has shown that negative emotions tend to be more contagious than positive ones, and they spread faster. This is consistent with what neuroscience tells us about the brain’s negativity bias, the tendency to give more weight and attention to negative stimuli, which has been documented in numerous studies over the past two decades.

KEVIN: So what we’re dealing with in transformation is not just people having individual emotional reactions to change. We’re dealing with a system-level phenomenon where emotions travel through the organization’s social networks, amplifying as they go, operating below conscious awareness, and shaping how people interpret and respond to the transformation before they’ve had any direct experience with it.

SEGMENT 2: WHY TRANSFORMATION IS A PERFECT CONTAGION ENVIRONMENT

KEVIN: Elizabeth, let’s talk about why organizational transformation creates ideal conditions for emotional contagion to operate at its most destructive.

ELIZABETH: There are several factors that converge during transformation that make emotional contagion particularly powerful. The first is uncertainty. Research on stress and cognition consistently shows that uncertainty heightens emotional sensitivity. When people don’t know what’s coming, when roles are unclear, when timelines shift, when the end state isn’t well defined, their brains become more vigilant about scanning the environment for potential or imagined signs of threats.  And the primary source of those signs or cues isn’t the official communication. It’s the emotional states of the people around them, especially the people above them in the hierarchy.

KEVIN: This connects directly to what we discussed in our last episode about identity threat. When leaders are processing their own anxiety about whether their expertise, their role, their relevance will survive the transformation, they’re broadcasting that anxiety through every interaction. Their tone in meetings shifts. Their response time to emails changes. Their body language during presentations tells a different story than their words. And every person in the room is unconsciously reading those signals and absorbing the emotional content.

ELIZABETH: The second factor is what researchers call social referencing. This is well documented in developmental psychology, where infants look to their caregivers’ facial expressions to determine whether a situation is safe or threatening. Adults do the same thing in organizations, particularly during times of uncertainty. They look to leaders, to respected colleagues, to informal influencers to determine how they should feel about what’s happening. If the people they’re looking to for emotional cues are radiating fear, that fear becomes the shared emotional baseline for the group.

KEVIN: And here’s where it gets really interesting from a transformation perspective. The people most likely to be experiencing intense emotions during transformation, the senior leaders, the technical experts, and the long-tenured employees whose identity is most tied to the current state, are also the people most others are looking to for emotional guidance. The research on emotional contagion shows that people with more power and status have disproportionate influence on group emotional states. A leader’s anxiety is more contagious than a peer’s anxiety. A respected expert’s fear about the transformation carries more emotional weight than a junior employee’s concern.

ELIZABETH: The third factor is proximity and frequency of contact. Emotional contagion requires exposure. The more time you spend with someone experiencing a strong emotion, the more likely you are to absorb that emotion. During transformation, organizations typically increase meeting frequency. There are more town halls, more check-ins, more status updates, more steering committee sessions. Each of these is an exposure opportunity. Organizations think they’re improving communication. And they may be improving information transfer. But they’re simultaneously increasing the channels through which emotional contagion operates.

KEVIN: I’ve seen this pattern repeatedly. An organization launches a transformation, recognizes that communication is important, dramatically increases the number of meetings and touchpoints, and then watches engagement decline even as communication increases. They’re confused because they’re doing everything the change management playbooks recommend. What they don’t realize is that every meeting where a leader’s unprocessed anxiety leaks through their carefully prepared talking points is spreading negative emotional contagion further and faster.

ELIZABETH: The fourth factor is the absence of emotional processing time. Transformation typically moves fast. There are deadlines, milestones, and deliverables. There’s pressure to maintain momentum. What gets sacrificed is the time and space for people to process their emotional responses to change. And unprocessed emotions don’t disappear. They leak out in interactions, in tone, in micro-expressions, in the way people respond or don’t respond to questions. They become the raw material for emotional contagion.

KEVIN: So if we put all of this together, transformation creates high uncertainty, which increases emotional sensitivity, it puts the most emotionally affected people in the most visible and influential positions, it increases the frequency of contact and exposure, and it eliminates the time needed for emotional processing. That’s not just a contagion-friendly environment. That’s a contagion-optimized environment.

SEGMENT 3: THE PATTERNS OF ORGANIZATIONAL EMOTIONAL CONTAGION

KEVIN: Let’s get specific about what emotional contagion actually looks like as it moves through an organization during transformation. Elizabeth, in your experience, what are the patterns leaders need to recognize?

ELIZABETH: The first and most common pattern is what I’d call the anxiety cascade. It starts at the top, often with a single leader or a small leadership group processing identity threat, competence anxiety, or strategic uncertainty. That anxiety expresses itself subtly through their behavior: shorter responses in meetings, more frequent requests for data and reassurance, decision delays disguised as prudent analysis, a shift in tone from confident to cautious. Their direct reports absorb that anxiety, add their own concerns, and transmit an intensified version to their teams. By the time it reaches the frontline, the original strategic uncertainty has transformed into “this whole thing is going to fail, and we’re all going to lose our jobs.”

KEVIN: I want to emphasize something about that cascade. The message changes as the emotion travels. The CEO might be experiencing legitimate strategic concern about market timing. That’s a reasonable emotion for someone in that role. But by the time it has traveled through three or four levels, it’s no longer a strategic concern. It’s existential fear. Each person in the chain interprets the emotion through their own psychological lens and transmits a version that reflects their specific vulnerabilities. The emotion is the carrier, but the narrative it attaches to shifts at every level.

ELIZABETH: The second pattern is what researchers describe as emotional clustering, where pockets of shared emotional states form within teams or departments. This happens when a particularly emotionally expressive individual, often a team lead or informal influencer, sets the emotional tone for their group. If that person is processing change with anxiety and cynicism, the entire cluster adopts that emotional stance. You end up with departments where “everyone knows this won’t work,” not because they’ve independently evaluated the transformation, but because the emotional environment has shaped a shared narrative.

KEVIN: I’ve seen organizations where two departments sitting on the same floor, doing similar work, affected by the same transformation, have completely opposite emotional orientations. One is cautiously optimistic, the other is actively hostile. The difference isn’t information or impact. The difference is the emotional state of the person setting the tone for each group. That’s emotional contagion operating at the cluster level.

ELIZABETH: The third pattern is emotional suppression rebound. This is particularly insidious. It happens when leaders are told, often by well-meaning change management consultants, that they need to project confidence and positivity about the transformation regardless of what they actually feel. The research on emotional suppression, including work by James Gross at Stanford, is very clear that suppressed emotions don’t disappear. They leak out through micro-expressions, voice tone, timing, and the gap between words and nonverbal signals, which researchers describe as behavioral leakage.

KEVIN: And here’s the critical finding: people are remarkably good at detecting emotional incongruence. When a leader says “I’m excited about this transformation,” but their body language, their tone, and their behavior between meetings all signal anxiety, the recipients don’t average those signals. They weigh the nonverbal signal more heavily because it feels more authentic. Research in communication science has consistently shown that when verbal and nonverbal messages conflict, people trust the nonverbal message. So the leader who suppresses their anxiety and projects false confidence doesn’t prevent emotional contagion. They make it worse because they add distrust to the emotional cocktail that’s spreading through the organization.

ELIZABETH: That’s exactly right. The emotion that spreads isn’t just anxiety anymore. It’s anxiety plus “leadership isn’t being honest with us.” That combination of anxiety and distrust is significantly more destructive than authentic anxiety on its own. At least authentic anxiety can be discussed, validated, and processed.

KEVIN: The fourth pattern is what I call emotional echo chambers. This builds on the clustering phenomenon but operates through informal networks rather than formal teams. During transformation, people naturally seek out others who share their emotional state. Anxious people find other anxious people. Cynical people find other cynics. These informal groups reinforce and amplify shared emotional states through repeated interaction. Social media research has documented this dynamic extensively in online environments, but it operates just as powerfully in organizational settings.

ELIZABETH: And the echo chamber effect has a specific consequence for transformation. It creates a phenomenon organizational psychologists call pluralistic ignorance, where each member of the group believes their emotional state represents the majority view when it may actually represent a minority position. An echo chamber of eight anxious people in a department of fifty can convince itself and eventually convince the rest that “everyone” thinks the transformation will fail. The emotional reality they’ve co-constructed through contagion becomes the perceived organizational reality.

KEVIN: The fifth pattern, and perhaps the most damaging, is what I’d describe as learned helplessness contagion. This occurs when people who’ve been through previous failed transformations transmit not just anxiety but a specific belief that change efforts are futile. Their emotional message isn’t “I’m worried about this.” It’s “nothing we do matters. We’ve seen this before. It will fail like the last one.” Martin Seligman’s foundational research established that learned helplessness develops when individuals experience repeated uncontrollable negative outcomes. What organizational researchers have since observed is that this helpless orientation doesn’t stay contained to those who experienced the failures directly. Through emotional contagion and social modeling, people who never experienced the original failures can adopt the same passive, defeated stance simply by working alongside those who did.

ELIZABETH: And organizations with a history of failed transformations, which is mostly among large organizations with the documented 70% failure rate, have embedded learned helplessness in their culture. It has become part of the emotional infrastructure. New employees absorb it from veterans. New leaders encounter it in every room. It’s the emotional equivalent of organizational scar tissue, and it makes every subsequent transformation harder because the negative emotional contagion has a head start.

SEGMENT 4: MANAGING EMOTIONAL CONTAGION

KEVIN: So the natural question is: what do you actually do about this? You can’t eliminate emotional contagion. It’s a basic feature of human neurobiology. You can’t tell people to stop feeling anxious. And as we just discussed, suppressing emotions makes the contagion worse. Elizabeth, what does the research suggest about managing rather than trying to eliminate emotional contagion?

ELIZABETH: The first and most important intervention is leader’s emotional awareness and processing. Before leaders can manage the emotional contagion they’re generating, they need to understand that they are generating it. Most leaders I work with are genuinely surprised when they learn that their unprocessed anxiety is radiating outward through every interaction. They think they’re hiding it well. They’re not. The research is very detailed on this.

KEVIN: This connects to something we’ve talked about throughout this podcast series: the importance of leaders doing their own psychological work before expecting their teams to navigate change successfully. If a leader is experiencing identity threat, competence anxiety, or strategic uncertainty about the transformation, that’s completely legitimate. But those emotions need to be processed, ideally with a coach, a peer group, or a trusted advisor, before the leader walks into a room full of people who will unconsciously absorb whatever emotional state they bring with them.

ELIZABETH: The second intervention is what I’d call intentional emotional modeling. Once leaders understand that they’re emotional broadcasters, they can begin to be more intentional about what they broadcast. And I want to be very clear: this is not the same as emotional suppression or projecting false positivity. Intentional emotional modeling means being authentic about the complexity of the emotional landscape while deliberately choosing which aspects to lead with. A leader might say, “I want to be honest that this transformation involves real uncertainty. I have concerns too. And I’m also genuinely energized by the problem we’re solving and confident in this team’s ability to work through the hard parts.” That’s not fake positivity. That’s an authentic emotional frame that acknowledges difficulty while leading with agency and capability.

KEVIN: The research on what Amy Edmondson at Harvard has documented about psychological safety is directly relevant here. When leaders model emotional honesty, not emotional dumping but honest acknowledgment of their own emotional experience, it creates conditions where others feel safe to process their emotions openly rather than through the underground channels of contagion. The emotions don’t disappear, but they move from unconscious transmission to conscious conversation. And that’s where they can actually be managed.

ELIZABETH: The third intervention targets the structural conditions that amplify contagion. Remember, transformation typically increases meeting frequency, reduces processing time, and puts emotionally affected leaders in front of large groups repeatedly. Organizations can redesign these structures to reduce contagion risk. This might mean reducing large group meetings where a single leader’s anxiety can spread to hundreds of people simultaneously and replacing them with smaller group conversations where emotional dynamics are more manageable and reciprocal. It might mean building processing time into the transformation cadence: not more meetings to discuss the change, but dedicated space for people to articulate and work through their emotional responses to the change.

KEVIN: I want to add something practical here. One of the most effective interventions I’ve used is what I call emotional check-ins at the beginning of meetings. Not “how is everyone feeling?” which tends to generate performative responses, but structured questions like “what’s one thing about this transformation that concerns you that we haven’t discussed openly?” or “where are you on a scale of one to ten in terms of confidence that we’ll get this right, and what would move you one point higher?” These questions surface the emotional reality in a way that makes it discussable rather than letting it operate underground through contagion.

ELIZABETH: The fourth intervention focuses on identifying and supporting emotional influencers. Every organization has informal emotional leaders, people whose emotional states have disproportionate influence on the groups around them. These aren’t always the formal leaders. They might be a long-tenured team lead, a respected technical expert, or the person everyone goes to for the “real story” about what’s happening. If these emotional influencers are processing change with anxiety and cynicism, they become super-spreaders of negative contagion. If they’re processing change with cautious optimism and genuine engagement, they become accelerators of positive emotional momentum.

KEVIN: The identification piece is critical. Leaders need to map not just the formal org chart but the emotional influence network. Who do people go to when they want to know how to feel about something? Who sets the tone in meetings? Whose reaction to a change announcement do people watch before forming their own response? Those are your emotional influencers, and investing in their psychological readiness for change is one of the highest-return investments a transformation leader can make.

ELIZABETH: The fifth intervention, and this one draws directly from the emotional contagion research, is leveraging the fact that positive emotions are also contagious. Barsade’s research showed that positive emotional contagion improved group cooperation, reduced conflict, and enhanced performance. The mechanism works in both directions. Organizations can intentionally create conditions for positive emotional contagion by celebrating genuine small wins, by making progress visible and concrete, and by creating opportunities for people who’ve successfully navigated the change to share their experience with those who haven’t yet.

KEVIN: And I want to emphasize the word “genuine” there. Manufactured enthusiasm, forced fun activities, and performative celebrations are detected as inauthentic and trigger the same distrust dynamic we discussed earlier. Positive emotional contagion requires authentic positive emotional experiences. That means the small wins need to be real. The progress needs to be actual. The stories of successful navigation need to come from people who genuinely experienced difficulty and worked through it, not from hand-picked success stories designed to make the transformation look easier than it is.

ELIZABETH: One more point on this: the timing matters enormously. Early in a transformation, when uncertainty is highest and emotional sensitivity is most acute, leaders should be investing heavily in creating conditions for positive emotional contagion. This is when emotional direction is being established. Once a negative emotional trajectory is entrenched, reversing it requires significantly more effort than setting a positive trajectory from the beginning would have.

KEVIN: That’s a critical insight. Emotional contagion is easier to shape at the beginning of a change than to reverse once it’s established. Organizations that ignore the emotional dimension during the early phases of transformation and then try to address morale problems later are fighting an uphill battle against entrenched emotional patterns that have already spread through the organization’s social networks.

CLOSING

KEVIN: Elizabeth, as we wrap up, what’s the one thing you’d want transformation leaders to take away from this conversation?

ELIZABETH: That emotions are data, not obstacles. When you see anxiety spreading through your organization, that’s not a problem to suppress or a weakness in your people. It’s information about the psychological environment you’ve created. The question isn’t how do I stop people from being anxious. The question is, what is the emotional environment I’m creating through my own behavior, through the structures I’ve designed, through the way I’m handling my own psychological response to this change? If you change the emotional inputs, the contagion changes direction.

KEVIN: I couldn’t agree more. And I’d add this: the 70% transformation failure rate that we reference frequently on this show doesn’t exist because organizations choose bad technology or write poor strategies. It exists because they ignore the human factors, the emotional factors, that determine whether people actually embrace or quietly sabotage the change. Emotional contagion is one of those factors, and it’s operating in your organization right now whether you’re managing it or not.

In our next episode, I’m going to address something that connects directly to what we’ve been discussing about emotional contagion: the middle management trap. Why are your most critical change agents set up to fail? Middle managers are the organizational layer that receives the most pressure to drive change while having the least psychological support to manage it. They’re translating strategic vision downward while managing resistance upward, and the research shows they experience significantly higher stress during transformation than either senior leadership or frontline employees. We’re going to explore the five distinct psychological burdens middle managers carry during change and what senior leaders can do to stop burning out their most important transformation allies. It’s essential listening for any executive who depends on middle management to execute their transformation vision.

Elizabeth: If you found today’s episode valuable, visit 2040digital.com or pick up a copy of my book, The Truth About Transformation: Leading in the Age of AI, Uncertainty, and Human Complexity, and explore these concepts further.

Also, subscribe to The Human Factor Podcast wherever you listen to podcasts, leave a rating, and a comment. And share this episode with your leadership team, because emotional contagion is a shared challenge that requires shared understanding.

Until next time, remember: Every transformation has two tracks running simultaneously. The visible track of technology, process, and structure. And the invisible track of emotions traveling through your organization’s human networks. The organizations that manage both tracks succeed. The ones that ignore the invisible track become part of the 70% failure rate..

Kevin: This is The Human Factor Podcast. I’m Kevin Novak.

Elizabeth: And I am Elizabeth Stewart, Thanks for watching or listening.

END OF EPISODE

🎵

Upcoming: Episode 016: THE MIDDLE MANAGEMENT TRAP

Middle managers are simultaneously the most critical and most neglected human element in transformation. Kevin Novak discusses why your most critical change agents are set up to fail.

Season 2 Launched on February 20, 2026

More Episodes Coming Soon

View Main Podcast Page →