Leading with happiness in AI-driven transformation: a qualitative study of happiness-based leadership and employee well-being

Purpose The study aims to examine how leaders who explicitly embrace happiness and well-being as core values practice leadership during the adoption of artificial intelligence (AI). It investigates how such happiness-based leaders interpret and enact their roles and how employees experience these practices in terms of motivation, trust, psychological safety and mental health. Design/methodology/approach Adopting a qualitative, interpretivist design grounded in abductive logic, the study draws on narrative interviews with top, middle and frontline leaders, complemented by semi-structured interviews and focus groups with employees across four organizations undergoing active AI implementation. Observations of town halls, change workshops and team interactions further inform the analysis. Combining narrative and thematic analysis enables interpretation of both leaders’ meaning-making stories and their enacted micro-practices in daily AI-related work contexts. Findings The study develops the concept of happiness-based digital leadership as a multidimensional configuration of practices comprising: (1) meaning-framing of AI, linking technology to organizational purpose and human values; (2) emotional containment, acknowledging fear and fatigue while modelling realistic optimism; (3) inclusive involvement, embedding participation and ethical safeguards in AI-related decisions; and (4) boundary work, protecting time, workload and human decision zones within AI governance. Three distinct leadership regimes – deep, rhetorical and instrumental – are identified, differing in the degree to which happiness practices are authentically integrated into AI governance or deployed as compliance mechanisms. Deep happiness-based digital leadership sustains trust, psychological safety and well-being; rhetorical and instrumental regimes risk turning happiness discourse into a soft form of technocratic control. Originality/value This research extends happiness management and positive leadership scholarship into AI-intensive contexts, explicating how happiness management principles can be enacted at the leadership level in AI governance. It offers conceptual and empirical insights into the emotional, ethical and governance dimensions of digital transformation, introduces a theoretically grounded typology of happiness-based leadership regimes and enriches understanding of psychological safety and emotional climate during technological change.