- Psychological safety should not be considered a baseline health and safety factor.
- A psychologically safe company culture is more challenging to build than most people realize.
- It is a powerful lever to increase performance and achieve excellence.
Co-authored with Per Hugander. Per is a strategic advisor helping executives achieve their goals by leveraging science and research in practice.
“Companies should mandate hygiene factors like ethics and psychological safety.”
The comment—made by a participant in an executive program a few minutes into the first discussion of a brand new Harvard Business School case study, Leading Culture Change at SEB—caught us both by surprise. We had worked together on the case, which tracked a successful attempt to influence culture at the fifteen-thousand employee Nordic bank, directly aimed at building psychological safety and perspective-taking so as to enable candid, rigorous conversations about strategic priorities. We each had the same thought at that moment: Psychological safety is not a hygiene factor—defined as something that must be present for a work environment to qualify as adequate, such as a paycheck, benefits, employee physical safety, freedom from harassment, and so forth. Elucidated by Frederick Herzberg, building on Abraham Maslow’s hierarchy of needs, hygiene factors don’t create competitive advantage for a company. They merely satisfy basic expectations that free people up to focus on doing a good job. Creating psychological safety, in contrast, constitutes a high standard, an ambition that allows an organization to be truly excellent and capable of transformation.
Beyond the Basics
This is an important distinction, because psychological safety has the potential to offer a competitive advantage for most organizations, it is not table stakes for being in business. In a recent article, “4 steps to boost Psychological Safety at your workplace,” we outlined an approach to developing the skills to create this advantage. Here we build on that work to explore how executives can arrive at the beginning of a transformational journey. To help, we introduce a hypothetical scale for conceptualizing different levels of psychological safety in an organization.
The scale ranges from 1-10, where a “2” or below represents a toxic environment with greater problems than the mere loss of employee voice, possibly including backstabbing, excessive self-protection that precludes focused, excellent work, and a guarded, suspicious approach to colleagues and managers. If that does not describe your workplace, that is certainly good news, but it’s not the end of the story.
A company that falls between 3 and 6 on our scale presents a work environment that appears reasonably healthy, but in fact is less engaged, open, and learning-oriented than first meets the eye. Here, unbeknownst to many managers, countless good ideas are withheld, the information or help needed to do a job well is not sought, and teamwork and collaboration suffer, all without being visibly problematic or toxic. This is the quiet middle zone where the illusion of a healthy work environment persists.
The risk of this middle zone is that managers believe their culture is conducive to innovation or agility, when in reality it is more cautious and self-protective than they think. A handful of prominent case studies serve to illustrate this risk, notably, in recent years: Wells Fargo, VW, and Boeing. In these companies, ambitious business goals were not backed up with the open, candid work environment that would have been needed to achieve them. What happened instead was senior executives lived under the illusion that all was well, when in fact bad news was simply being withheld. The culture invisibly all but guaranteed strategic failure in each case.
Finally, the top of scale, say 7 and above, represents a significant culture achievement. Here is where people can–and do—engage in the hard, interpersonally risky, work of offering criticism, asking for help, sharing out-of-the-box ideas, engaging in dialogue, and other behaviors that promote good decisionmaking, learning, innovation, and ultimately excellence in a changing world.
Recognizing and Overcoming An Interpersonally Risk-Averse Culture
“We don’t have a problem with psychological safety” is a phrase we have both encountered in organizations we’ve studied or worked with several times. Of course, it may be true. But more often than not, even though the organization lacks a toxic environment, people may still shy away from the interpersonal risks necessary to making progress on the transformative strategies the market environment demands. For organizations operating in a predictable environment (as was the case in many industries before the COVID-19 pandemic, or before digitalization transformed so many business models) a medium level of psychological safety might have been good enough to maintain a solid position. However, if a demanding, fast-changing environment calls for agility, innovation, or transformation to succeed, this will not be adequate. The necessary level of candor and vulnerability are missing.
When leaders choose to build the level of psychological safety conducive to genuine risk-taking and learning, they improve their chances of success. Despite such organizational cultures being relatively rare, we do not mean to imply that creating them requires heroics or miracles. Both of us have studied and helped with such transformations. For example, in our case study of SEB, one executive reported, “The results came quicker than we expected, and they came in the shape of quicker decisions, better decisions. You slow down to speed up. Strategic problems that had been around for a while, we were able to solve them relatively quickly. Internally and with external stakeholders.”
The goal of the intervention at SEB was to strengthen psychological safety and dialogue skills to improve performance in the organization’s fast-changing, demanding market environment. Focused training, as we previously outlined, appears to create strategic progress both for incumbents aiming to adjust to a new environment and for startups that need to transform as they grow rapidly. But crucial to doing this work is recognizing the particular challenges of measuring psychological safety. Research shows that those further up the hierarchy tend to experience higher psychological safety than those lower, despite depending on them for input, ideas, and challenging questions. We believe that the conceptual scale we present in this article can help by making the risky middle zone salient.
Invite Others to Shape the Journey
We have worked with hundreds of executives who have tackled the challenge of altering how they think and interact with peers and subordinates so as to improve business performance. By making a few simple (not easy) tweaks to their leadership behavior, especially in how they set the stage, invite others’ voices, and respond to bad news or challenges, the executives’ conversations slowly transform to become more authentic, courageous, and productive. It becomes clear that psychological safety is neither a hygiene factor nor (our other pet peeve) the “soft stuff” to push aside in favor of hard-nosed business concerns. But getting to this point starts with recognizing the risks lurking in ostensibly healthy workplaces in which holding back sensitive information is the invisible norm.
We have found that discussing our scale so as to explain its three basic zones helps build motivation to take the following steps to move further to the right, from anywhere on the spectrum.
- Articulate the compelling performance goals the team or organization seeks to achieve.
- Explain why achieving these goals requires people to voice ideas, challenge each other, and be open about problems and failures along the way.
- Ask your team members for ideas about how to hold yourselves accountable for moving to the right on the psychological safety scale.
- Agree on a schedule for checking in to assess progress on the business and culture goals as a means for making changes in what will necessarily be an iterative journey.
This approach prioritizes a team or an organization’s performance goals as a way of opening up discussions of culture, rather than the other way around. It also helps people understand that the absence of toxicity is not evidence of cultural health and helps executives to see psychological safety as a key to success in a transforming industry while also appreciating the challenge that lies ahead if they choose to hold themselves accountable for building it.