Psychological safety is a critical driver of retention and performance. Karam Filfilan meets the experts to learn how leaders can foster a sense of personal belonging in an increasingly digital workplace
When employees feel valued, able to share ideas and challenge established thinking without fear of negative consequences, they become more innovative, resilient and open to the benefits of diversity. It may sound obvious, but surprisingly few business leaders are able to create such an environment, despite the clear benefits.
A recent survey by McKinsey, which looked at the role of leadership behaviour in creating psychologically safe spaces for employees, asked more than 1,500 participants how often their leaders demonstrated supportive behaviour and how challenging their work was. It found that just 26% of team leaders were seen to create work with meaning while also supporting their employees through it. Conversely, 41% of team leaders created a poor environment where workers felt afraid to ask for help and were too demotivated to challenge the status quo. The result? A disengaged workforce who are apathetic about their work.
So, what is psychological safety and how do we create it? “The best way to describe psychological safety is as permission for candour. It’s about the cost of people holding back relevant observations, concerns, mistakes and ideas because of worrying about what colleagues will think about them,” says Amy Edmondson, Novartis Professor of Leadership and Management at Harvard Business School, and one of the first to research the topic back in 1999.
Edmondson believes that the pandemic and remote working have changed the scope of psychological safety. What was once the domain of the workplace has expanded as the line between personal and professional life blurs. At the same time, remote working provides new challenges to building psychologically safe workplaces.
“Remote work means that you see into your colleagues’ lives in a way you didn’t before. Childcare means they might not be able to attend a particular meeting at a particular time in a way you wouldn’t have noticed before. The most important thing to realise is that remote work lowers the level of psychological safety on average or, put another way, it raises the bar on voice. It makes it harder for people to lean in with a spontaneous comment at an appropriate time. You have to unmute yourself or raise your hand and that creates a higher hurdle,” says Edmondson.
This isn’t simply about wellbeing at work – it’s about the future success of your business. Businesses that fail to acknowledge psychological safety will pay the ultimate price, with employees eventually leaving. For Edmondson, the Great Resignation means businesses need to be “more enthusiastic” about selling themselves and the work they do. Brand reputation, purpose and how you treat employees are increasingly important. Organisational culture is a huge part of this and creating psychological safety is now a recruiting and retaining aspect.
Tracey Rob Perera CA, Chair of ICAS’ EDI Committee and former KPMG Business Strategy Transformation Director, agrees with Edmondson that psychological safety is key to creating a positive culture – but stresses that remote working isn’t a barrier if businesses create the right communication channels.
“Multi-directional communication, whether face to face or through digital channels such as Slack, is vitally important,” she says. For Perera, psychological safety is a key driver of many of the requirements needed for success in the future of work. Improved equity, diversity and inclusion, more creative and innovative thinking, and employees being able to work to their full potential all require psychological safety.
Trust and teamwork
Perera believes psychological safety is critical when driving complex change and managing through a crisis. She cites her time at KPMG, where she led the no-deal Brexit contingency planning involving more than 100 employees. The first challenge was getting senior leaders to agree on the worst-case scenario, with all employees having to work remotely simultaneously, navigating potential travel and border issues. Perera says the executive committee believed this presented no issues. But she worked with junior employees to uncover the knowledge on the ground. “I gave them a safe space to talk about what could go wrong and let them make their voices heard,” she says. “I told them they wouldn’t face retribution and that we would solve the issue together. Only by creating a safe place to speak freely are people able to raise concerns and tough problems that they may not themselves know how to resolve”.
To create psychological safety, leaders need to demonstrate emotional intelligence in this way. They must be open to the different drivers motivating individuals and be aware of the impact of their own behaviour. Being emotionally and physically available to your team is vital, as is rewarding openness and even challenging leader and group behaviour.
“I’d invite all 100 employees to attend group progress meetings. And if team leaders were either misrepresenting or not catching problems, employees had the chance to come directly to me. It’s about making yourself available as a leader and showing that we were inclusive and not hierarchical,” says Perera.
“I was running leadership committees reporting directly to the executive committee and board members. Unlike normal practice, I would bring in a junior employee who was working on a particular part of a project. The junior member was able both to receive credit where it was due and, in turn, to understand the big picture of how their work fitted into the business. It showed we were all working together to come up with solutions and it left the employee even more motivated to over-perform.”
When building a psychologically safe organisation, it’s important to ensure that it’s a cultural initiative, rather than something siloed with the HR department or an individual. As a project, it centres on strengthening trust – and that requires everybody to be on board.
“If you look at the models that exist around wellbeing and trust, they often look at it through a single lens – diversity, health and safety, reward,” says Kate Field, Global Head of Health, Safety and Wellbeing at business standards and improvement company British Standards Institution (BSI). “This is actually about your people, so unless you think holistically and join it all up, you’re going to limit your success.”
Psychological health and safety in the workplace has long been an issue. Mental ill health accounted for 19% of all sick days in the UK in 2021 – more than Covid-19 (16%). Failure to adequately address issues around psychological safety causes employees to leave, too, with 54% of people who take two or more mental health-related absences going on to leave their jobs. Replacing this talent is hugely expensive, with Gallup reporting that voluntary turnover costs US businesses $1trn (£760bn) each year.
“It’s no longer enough for leaders to say ‘people are our number one priority’. How do you demonstrate that authentically, rather than it just being a tick-box exercise? People leave not just because they’re unhappy, but because they’re unappreciated. They don’t feel a culture of trust,” says Field.
The good news is that many organisations are treating psychological safety as a strategic priority. Wellbeing initiatives, alongside the increased focus on emotional health brought about by the pandemic, means psychological safety has risen up the business agenda. To build on this progress, Field advises leaders to look to standards and best practice, such as those introduced by the BSI and the International Organisation for Standardisation. She describes such frameworks as “free consultancy” from industry experts, allowing businesses to use what is relevant to them. “Don’t be intimidated by standards. Begin by reviewing the standard and the areas that are most relevant and useful to you,” she suggests.
Ultimately, psychological safety is about futureproofing your business. Without it, you face losing your best talent, missing opportunities for innovation and falling behind more progressive competitors. The shifting expectations of employment following the pandemic mean employees will no longer put up with a poor workplace culture.
“Be brave and be honest,” says Field. “We’re all humans and we all have emotions. We all know how helpful it is when we’re in difficulty and someone reacts well and supports us. You’re trying to create that within your organisation. Creating the right environment for your people to be successful will create the right environment for your business to be successful.”