How Positive Psychology Transforms Leadership

Picture this: you’re leading a team that’s hitting targets, but the energy is flat. People are showing up, doing their work, but you sense a lack of spark. They aren’t failing, but they’re not flourishing either. This is where many managers find themselves, and often the instinct is to push harder, offer more training, or double down on accountability. But what if the key to energizing your team isn’t found in correcting weaknesses, but in amplifying strengths?

This is the central promise of positive psychology. Far from being a buzzword about “just staying positive,” it is the scientific study of optimal human functioning. In conversation with positive psychology expert and coach Natalya Pestalozzi, the power of focusing on character strengths emerged as a compelling way for managers to create thriving teams and resilient workplaces.

Positive Psychology is not Toxic Positivity

Positive psychology is frequently misunderstood. At first glance, it can be confused with toxic positivity, the insistence on being cheerful or optimistic at all times. But as Natalya explains, positive psychology does not ask us to ignore hardship or deny difficult emotions. Instead, it acknowledges the full range of human experience. Traditional psychology tends to focus on repairing damage, helping someone move from a place of struggle back to a state of stability.

Positive psychology takes the next step, asking how we move from stability to a life of flourishing.

The distinction is crucial for managers. Encouraging employees to simply “look on the bright side” risks alienating people and invalidating their experiences. Positive psychology, by contrast, validates the lows as well as the highs. It teaches us how to harness both challenges and strengths to grow. In a work context, this means leaders who embrace the full humanity of their teams create more trust, resilience, and engagement than those who rely on forced optimism.

Strengths That Everyone Shares

When most of us hear the word “strengths,” we think of professional skills: being detail-oriented, analytical, or quick under pressure. But positive psychology identifies strengths in a deeper way. Through decades of research, the VIA Character Strengths framework has defined twenty-four traits that are universally valued across cultures and time. These include qualities like curiosity, gratitude, perseverance, hope, humor, and social intelligence.

Unlike talents or technical expertise, these strengths are accessible to everyone. They are not rare gifts possessed by a select few but fundamental characteristics of being human. Each person has their own unique combination of these strengths, with a handful that show up most strongly. Natalya describes these as “signature strengths,” the traits that make us feel most authentic and energized when we use them.

For managers, the insight is profound: when people are able to lean into their strengths, they don’t just perform better, they feel more themselves. This sense of alignment fuels motivation, creativity, and engagement. Rather than asking, “What’s broken and how do we fix it?” the more powerful question becomes, “What’s strong and how do we build on it?”

Engagement and the PERMA Model

The importance of strengths is particularly clear when considered through Martin Seligman’s PERMA model of well-being, which outlines five elements that contribute to flourishing: positive emotions, engagement, relationships, meaning, and achievement. Engagement, the state of being fully absorbed and energized by what we’re doing, is directly tied to strengths.

Natalya notes that when we are working in ways that tap into our strengths, we feel lifted and alive. When we are forced to operate in ways that suppress them, we become drained, frustrated, or disengaged. Managers who help their teams find and use their strengths open the door to deeper engagement and better results. 

Strengths Can Be Under- or Over-Used

Of course, strengths are not a free pass. Natalya explains that they can be overused or underused, which turns them into liabilities. Honesty, for example, is a strength that fosters trust when expressed well. Overused, it becomes bluntness that causes unnecessary harm. Underused, it becomes sugarcoating that prevents clarity. Forgiveness, similarly, is essential for growth and learning, but if overused, it can slide into permissiveness, where mistakes are excused to the point of lowering standards.

The art of leadership, Natalya notes, is finding what Aristotle called the “golden mean”—the right strength, in the right degree, in the right situation. This requires self-awareness and reflection. Managers who notice when their own strengths tip into extremes can model balance for their teams. And those who pay attention to how strengths show up in others can encourage balanced growth in their colleagues as well.

Bringing Strengths Into Everyday Work

Integrating strengths into team culture does not require grand gestures or elaborate programs. It can begin with simple awareness. The first step, says Natalya, is for managers to know their own strengths, whether through the VIA assessment or personal reflection on times they’ve felt most alive at work. The next step is to intentionally show those strengths in daily interactions. Finally, strengths can be grown by seeking out new contexts to apply them.

Natalya goes on to say that with teams, managers can create a strengths-based culture by noticing and naming strengths in action. When someone demonstrates perseverance on a tough project or shows social intelligence in a delicate conversation, calling it out reinforces positive behaviors and helps employees feel truly seen. Over time, these moments of recognition build trust and collaboration. They also shift appreciation from generic praise to specific acknowledgment of what makes each person unique.

Natalya highlights how powerful it can be when strengths become part of the language of recognition. Rather than simply saying “good job,” a manager might thank an employee for their bravery in raising a difficult issue or their curiosity in exploring new approaches. Recognition framed in this way resonates more deeply because it affirms not just what was accomplished but who the person is.

Strengths in Leadership

While all twenty-four character strengths have value, some are especially impactful in management roles. Leadership itself is one, of course, but so are judgment, prudence, gratitude, social intelligence, and self-regulation, explains Natalya. These traits help managers make wise decisions, foster collaboration, maintain composure under pressure, and create cultures of trust and appreciation.

One particularly striking insight Natalya points out is that strengths use can reduce competition and foster cooperation. Technical skills and abilities often trigger comparison and rivalry, but when people witness strengths in action—such as perseverance, kindness, or humor—they are inspired rather than threatened. In this way, a strengths-based approach builds not only individual engagement but also collective cohesion.

Leading With Strengths

In the end, positive psychology challenges managers to rethink their role. Leadership is not just about solving problems or closing gaps. It is about amplifying strengths, cultivating engagement, and enabling people to feel strong and authentic in their work.

When managers embrace this perspective, they don’t just drive performance. They build resilient, motivated, and connected teams. They foster workplaces where people show up fully, bring out the best in each other, and achieve more together than they could alone.

The shift may seem subtle, but the impact is profound. Leading with strengths transforms management from a task of fixing what’s wrong into the art of bringing out what is most right. And in that shift lies the possibility of workplaces where everyone not only succeeds, but truly flourishes.

Listen to the entire episode HERE to learn more about leading with strengths.

 Keep up with Natalya Pestalozzi: 

- Connect with Natalya on LinkedIn here 

- Take the Via strengths character assessment

- To discover more or enroll in CAPP, check out:

https://theflourishingcenter.com/natalya/ The program begins October 21st.

- Learn more www.natalyapestalozzi.com 

FREE: Masterclass in Positive Psychology and the Science of Flourishing Recording and Finding the Golden Mean PDF

The 60‑minute webinar recording explores the cutting‑edge science behind human flourishing—then translates it into simple, practical actions you can start using the same day. Through research‑backed insights, and interactive micro‑exercises, you’ll discover how tiny shifts in mindset and behavior can ignite big gains in vitality, connection, and purpose. 

What You’ll Learn Flourishing vs. Languishing: Spot where you (and those you serve) sit on the Mental Health Continuum—and how to move upward. 

Pathways to Peak Well‑Being: The six evidence‑based drivers of positivity, engagement, achievement, meaning, relationships, and vitality. 

Why Happiness Fuels Success: Break the myth that you must succeed first to be happy—see how positive emotions actually power performance. 

Taming the Negativity Bias: Simple brain‑based hacks to counter worry, rumination, and “what‑ifs.” 

Micro‑Interventions That Stick: Gratitude, savoring, kindness, and other two‑minute practices that measurably lift mood and resilience.

Prioritizing Positivity: Craft days that naturally generate more joy—at work, at home, and everywhere in between. 

The Golden Mean is using character strengths in a balanced way (optimal use). It is when you apply the right combination of character strengths, to the right degree, in the right situation. This PDF shows the underuse, overuse and optimal use of character strengths

To get this bonus and many other member benefits, become a member of The Modern Manager Podcast+ Community.

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The Modern Manager is a leadership podcast for rockstar managers who want to create a working environment where people thrive, and great work gets done.