Why psychological safety at work matters to business
October 28, 2021
Over the years, I’ve come to know that people are at their best when they succeed at working collaboratively. I’ve been lucky to experience incredible teams. I’ve felt part of groups that connect emotionally and intellectually, that thrive and create together. Conversely, I’ve also worked in hierarchical organizations that are run by abusive people, who have often been promoted to the top by financial success metrics that ignore human metrics and the importance of managing people’s well-being as well as their performance. There are still many companies out there facing this internal challenge. One only has to look at Glassdoor or Fishbowl’s anonymous company reviews to see how people feel at work. They can then empathize and infer how human performance might be impacted by abusive leaders.
What makes people reach peak performance? When can they be the most innovative? It turns out that one of the foundational factors is psychological safety. This is a topic that has attracted quite a bit of attention recently, especially within the context of the pandemic. In her recent book, Amy C. Edmondson, Professor of Leadership and Management at Harvard’s Business School defines psychological safety as the ability to speak up in a work environment without the fear of being humiliated or penalized.
It may sound simple, but psychological safety in the workplace is complicated. Unfortunately, it is also on the decline. When there is no psychological safety in the workplace, then people suffer trauma. As a result, productivity and, implicitly, revenue decrease; innovation and performance drop. This translates into costs to the individual—such as health problems, poor decision quality, low satisfaction—but also into significant costs to the company, such as absenteeism, attrition, the inability to retain highly skilled workers, low engagement, low skill acquisition, low innovation and low productivity. Eventually, such an environment translates into a poor employer brand and a sustained competitive disadvantage.
$600 billion a year is lost on employee turnover. In contrast, companies that engineer high psychological safety experience many benefits.
Sources: Gartner Research, The Missing Element in Nearly Every Learning Strategy; Gallup, State of the American Workforce Report; Zak, Paul J., “The Neuroscience of Trust,” Harvard Business Review, January 2017
Leading companies—Google, Gartner and Microsoft—have already identified psychological safety as the key element to unlocking team potential. Our own Accenture research shows that when employees are net better off, they are 5 times more likely to experience increased performance at work. And when performance is high, innovation follows.
So, what can leaders do to nurture and maintain people and avoid massive turnover events such as the recent pandemic one described by Inc. as “The Great Resignation,” a term first coined in 2019 by Anthony Klotz Texas A&M? The answer now and in the future lies with building a healthy work environment that can implement the three steps below:
1. Take a hard look at the psychological profiles of your leaders
An antiquated leader model rewards people who set and achieve high financial targets, regardless of human cost. Simply stated, if a company defines success by financial outcomes only, people with antisocial personality tendencies have a competitive advantage and will climb to the top because they are not encumbered by empathy. But these kinds of leaders alienate workers and cause all the negative effects mentioned above. Instead, companies should identify and promote leaders that can develop people. Workers will move toward people managers who care about them and with whom they can team effectively to achieve performance, career goals and mastery. In the long run, these people-oriented leaders will increase the competitive position of the company’s workforce.
2. Create team flow for high performance and innovation
Effective leaders define and set psychological safety and innovation triggers for their teams to create the version of what famous psychologist Mihaly Csikszentmihalyi coined as flow: the ability to hyperfocus on an activity that provides satisfaction and skill mastery. Team flow implies sharing goals and risks, while in a psychologically safe environment, where everyone is working toward the same end with a shared sense of trust and ownership. Autonomy, equal participation and collaboration lead to higher quality decisions, while getting familiar with teammates' personalities, abilities and preferences makes the blending of egos easier. And when communication channels are kept open without sanction, groups communicate often and provide feedback openly and regularly.
3. Adopt psychological safety analytics
Employee experience metrics can prove to be the answer to most problems related to toxic leadership and declining psychological safety. At organizations where people are the most valuable differentiated asset, human safety, engagement, growth and satisfaction at work can be measured in addition to financial outcomes. For instance, companies can run quarterly pulse surveys for their teams on psychological safety and compare results with statistical norms for similar teams. These human measures should be attached to the privilege of leadership and performance-based bonuses. For example, in addition to financial metrics, CXO bonuses should be connected to the development, effective use and sustainability of human capital.
Psychological safety in the workplace opens a fundamental reexamination of success and of the scaffolding that leads to achievement. It opens the door to innovation at scale. And in the long run, it creates a more sustainable long-term growth trajectory that leaves people net better off, while the company benefits from a stellar employer brand, the ability to attract, engage and retain the most sought-after talent, and the highest levels of performance and innovation.
Read more about fable+, part of Accenture. Their cloud-based app measures psychological safety, quantifying key culture factors that drive performance across different levels of the organization.