Business Success Unlocked
The Impact of Psychological Safety on Team Performance and Profit
Creating a culture of psychological safety in the workplace is essential for employee well-being and the success of a company. According to Amy Edmonson, author of “The Fearless Organisation”, psychological safety refers to “a shared belief held by members of a team that the team is safe for interpersonal risk-taking”. In other words, it means creating an environment where employees feel comfortable sharing ideas and concerns without fear of retaliation.
Edmonson states that “psychological safety is the foundation for learning and innovation, because without it, individuals are too afraid to speak up and share new ideas”. This is because when employees feel safe and supported, they are likely to take risks, speak up, and collaborate effectively, which leads to improved performance and innovation.
The importance of leadership in creating psychological safety cannot be overemphasised. Leaders must model the behaviour they want to see in their organisations, and they must be willing to listen to and respond to employee feedback. Edmonson suggests that “Leaders must provide opportunities for employee development and growth, which helps employees feel valued and engaged”.
The Benefits of Psychological Safety
There are numerous business benefits of creating a culture of psychological safety, including:
Improved performance
Increased innovation
Great employee engagement
Better problem-solving
Increased retention
Improved customer service
Better decision-making
Better communication
Increased adaptability
Greater trust
All of these result in stronger and more successful businesses and are backed by research and studies. For example:
A study by Google found that teams with high psychological safety were more likely to perform well and achieve their goals. The study also found that psychological safety was THE most important factor in determining a team’s success.
The American Psychological Association found that employees who feel psychologically safe and more likely to be engaged, motivated, and satisfied with their jobs
A Harvard Business Review study confirmed that teams with high psychological safety are more likely to be innovative and generate new ideas.
There are many studies on the positive benefits of creating a culture of psychological safely, from the likes of the Society for Human Resource Management, the National Safety Council, Gallup as well as tertiary education institutions like the University of Queensland and the University of Warwick
Why Is It So Hard?
Given the business benefits of creating psychological safety, why is it so hard to just go out and create it in every business?
Creating psychological safety in a workplace can be difficult because it requires a balance of several factors, including trust, communication, and inclusivity.
Additionally, it can be challenging to create an environment where individuals feel comfortable expressing their thoughts and ideas without fear of negative consequences. Factors such as power dynamics, past experiences, and personal biases can also contribute to the lack of psychological safety.
But it is possible.
Some examples of companies that have been known for fostering psychological safety are Google, SAS, and Patagonia. These companies have implemented practices like open communication, transparency, and inclusivity that promote psychological safety in the workplace.
How Leaders Create Psychological Safety
Leaders are central to creating an environment of psychological safety. While employees can create pockets of safety for themselves, generally the culture of a business is created top down. Leadership teams model the acceptable and expected behaviour to everyone else in the business. True psychological safety is not possible without leadership buy in and active participation.
Creating a culture of psychological safety in the workplace requires a combination of actions and behaviours that foster trust, transparency, and inclusivity. Here are some actions that leaders can take to create psychological safety:
Lead by example: Leaders must model the behaviour they want to see in their people. They should be willing to admit mistakes and take responsibility for their own actions. They should also be willing to listen and respond to concerns and feedback from their people.
Encourage open communication: encourage employees to speak up and share their ideas, concerns, and feedback. Create channels for people to provide feedback and. Make sure that their feedback is being heard and acted upon
Promote inclusion and diversity: Create a culture where all employees feel values and respected, regardless of their background, culture, or personal characteristics. Encourage diversity of through and perspective that can lead to more creativity and innovation
Provide opportunities for growth and development: offer opportunities for employees to learn and grow, such as training, stretch assignments, mentoring, and coaching. When authentically deployed these will help employees feel valued and engaged, which improves engagement and innovation
Use positive reinforcement: reward employees to taking risks and sharing ideas, this will help others feel comfortable to speak up and share their thoughts and ideas
Encourage open and respectful dialogue: remove any possible retaliations and the assumption of retribution
Build trust: Trust is most easily built from the top down by the often-uncomfortable action of trusting first as the leader. Trusting in your people first and showing your trust through your words and actions is the first (and hardest) step.
Transparency: Share information as openly as possible with your employees, this will help them understand your goals and objectives, how they fit into the bigger picture and how difficult decisions have been made
It it critical that you regularly assess the company culture on a continuous improvement cycle. Encourage employees to speak up, share their ideas, and work collaboratively and be mindful of creating an environment where employees feel safe and supported.
Some Signs That Your Business is Not Psychologically Safe
It can be hard to gauge or measure psychological safety, and sometimes the absence of psychological safety can be easier to spot if you’re looking for it.
Here are some signs that your business is not psychologically safe:
There is no or limited negative feedback from employees
Employees don’t share ideas or opinions openly
Employees don’t challenge ideas or opinions
There are incidents of retaliation and retribution
You are struggling with engagement
Turnover is high
The pace of innovation is sluggish at best
While this is not an exhaustive list and there are other factors that could contribute to the presence of these signals in your business, it’s a relatively safe bet that if you’re seeing one or more of the above, your employees do not feel psychologically safe.
It is then your job as leader to find out why this is happening and implement a plan to turn this around.
It’s worth noting that it’s not always easy to determine if a workplace if psychologically safe, and it may require a combination of methods and feedback to get a clear picture. However, by taking the time to assess the workplace and gather feedback, organisations can take steps to improve psychological safety and create a healthier, more productive workplace.
Bringing It Together
Leadership plays a critical role in creating psychological safety. Leaders must understand how to nurture, build, and scale this safety, starting with themselves.
Creating psychological safety requires ongoing effort and commitment. It’s not a one-time event, but rather an ongoing process that requires constant monitoring and improvement. Regularly assessing the company’s culture and taking steps to improve it can help ensure that employees feel safe, respected, and valued.
As hard as it is to do, creating psychological safety is critical to business success. It is essential for employee well-being and to improve engagement, performance, and innovation,
What will you do today to secure the psychological safety of your people?
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