How a CEO’s Trauma Impacts the Bottom Line

What do adverse childhood experiences have to do with the profit margin of a company? A lot, actually. There’s no shortage of advice to help C-Suite executives navigate external factors that impact business revenue and profitability—from supply chain disruption to economic ebb and flow. Yet one leadership factor that is within their control gets little to no attention.

When business leaders avoid taking radical responsibility for their own healing, the repercussions can be felt far and wide, sometimes most evidently in the long-term bottom line. While more socially acceptable language might be used to describe an ineffective leader’s personality, few talk about the negative influence of leaders who have unprocessed trauma.

In Heal to Lead: Revolutionizing Leadership through Trauma Healing (Wiley, April 2024), I boil this down to two trauma-based leadership styles—People Pleasers and People Controllers. In Chapter 18 “Compassionate Intelligence,” I explain why neither is more effective than the other:

For People Pleasers, empathy comes easily, and compassion is likely our default. Go too far in this direction, though, and you might take action to the detriment of the organization. When we have unprocessed trauma, our compassion for others can cause us to bleed out, metaphorically speaking. This is where we can fall into the trap of martyrdom and overextend ourselves to an irrational degree. That can cause resentment in you, unnecessary anxiety in your people, and a disruption to your bottom line.

For People Controllers, it might be difficult to overcome the impulse to harden around the suffering of others or resent employees who bring personal issues into the workplace. Many of us have had an authoritative leader or two who conveyed their level of compassion as “Life is hard. We don’t have time for that. Let’s move on. We have work to do.” That only alienates people and makes it clear that you don’t care about them, which is one of the leading reasons why workers choose to leave their employers. According to the World Economic Forum with research from McKinsey & Company, “uncaring/uninspiring leaders” was cited as why more than one-third of employees leave. Not far behind that were “unsustainable work expectations,” “unreliable/unsupportive colleagues,” and “lack of support for health/well-being.” It all comes down to caring and support, or being seen and valued, and feeling a sense of belonging. Is it any wonder that that is what people want from the leaders and organizations with which they spend the most time—especially when those reflect the same human needs we had when we were younger?

As a leader, I know it can be hard, even impossible, to ensure that each of your people feels cared for and well-supported. After all, each of them brings their wounds into the way they show up at work, so striving for perfection here, too, is a losing proposition. Some of us might oscillate between martyrdom and apathy on any given day, but compassionate intelligence is a practice that can be a win for all. Instead of striving for perfection, what’s more helpful is to strive to ensure that people know you care.

While this may feel fluffy, be sure that we’re talking about trauma’s downstream impact on money. Since that’s likely to be what you and your shareholders are focused on, why not consider how caring about the people inside your organization will naturally lead to financial sustainability and growth?

Imagine a circular flow where money follows value. The more you support your people, the more they feel seen, heard, valued, understood, and respected. When people feel cared for, they tend to stay. They dedicate more of themselves to the success of the company’s mission. Less attrition leads to more consistency in your product or service delivery. Clients and customers report higher levels of satisfaction, so they stay longer and refer more ideal business. With more demand, the company invests in ways to make processes more efficient—by involving all employees in the conversations so they can influence automation and use of AI where possible, leaving them to feel more fulfilled by doing work that requires thought, strategy, creativity, resourcefulness, problem-solving, and innovation. Margins grow and employees share in the profits they participate in generating. The bottom line is as healthy as it’s ever been.

If it sounds like a pipedream, it might be time to take a long, hard look at what might be holding your organization back from optimal function. If leadership informs the success of an organization, how might a CEO’s past trauma be standing in the way?

1. People-pleasing CEOs likely experienced rejection or abandonment of some form in youth. That imprint carried into adulthood, and while their style may seem healthy from the outside, a closer look reveals their shadow leadership traits. Pleasing can manifest as poor boundaries, conflict avoidance, difficulty holding people accountable, inability to delegate tasks (which leads to burnout and disempowers others), and difficulty asking for support (which leads to resentment for “needing to handle everything” themselves).
2. People-controlling CEOs likely felt deep shame and/or powerlessness during childhood. Their ego does what it was designed to do by preventing them from experiencing that pain again, so they keep others within finite scopes to ensure safety. This could manifest as micromanaging, aggression, sarcasm, undermining, taking credit for others’ ideas or work, discrediting differences in perspective, blocking promotions, and excluding or removing anyone threatening their individualistic legacy.
3. Hybrid pleasers and controllers may exhibit tendencies from both trauma-based leadership styles on any given day. It’s important to note that most of us are likely to fall into this category, by the way. These tendencies are not character flaws or fixed parts of our personality; they are the manifestation of strategies that we have unconsciously put in place to survive our formative years. The difference in long-term effective leadership is in whether or not we do the work—to unpack our past and integrate those experiences where we were unable to cope with what we endured, regardless of how “big” or “small” trauma is perceived to be because it’s all subjective.

In stark contrast, high-conscious leaders—those who are actively doing the inner healing work that’s necessary to lead others effectively—are self-aware enough to know how their past impacts their present leadership style. They are able to communicate consciously, hold others accountable, lead with compassion, motivate groups toward a shared mission and vision, ask for help, embody vulnerability, and light the way for others to surpass their own legacy.

Leaders who operate from a place of self-awareness and higher consciousness can see the bigger picture. They can see themselves as part of a generative ecosystem that invites them to create more leaders, focusing less on the individualistic legacy they themselves will leave. Employees and customers alike trust leaders who show their humanity and genuinely care about the humanity of others.

Rooted in a CEO’s courage and willingness to integrate their childhood trauma, the evidence of this style of leadership is in a bottom line that would be categorized as healthy by any shareholder or private equity investor.

Written by Kelly L. Campbell.

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