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Strategy and psychological safety

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Understanding psychological safety in the workplace


Your talent, the people who work in and for your organisation, can easily be both your most expensive and most volatile resource, so taking the time to create the kind of positive environment that helps you attract and retain the best is a no-brainer. One key step in creating that kind of environment is making sure that you're putting enough of a focus on psychological safety.


But what actually is it, why should you care about it, and how do you go about getting it?


Popularised by Amy C Edmondson, a Harvard Business School Professor with a PhD in Organisational Behaviour and the authour of seven books, including The Fearless Organization: Creating Psychological Safety in the Workplace for Learning, Innovation, and Growth, the term 'psychological safety' refers to a work environment where employees feel safe to express their opinions, take risks, and bring their authentic selves to work without fear of negative consequences. It's the kind of culture that fosters innovation, collaboration, and employee engagement, all of which have a direct impact on improved overall performance.


To create a culture of psychological safety, organisations need more than just good intentions or a lot of buzzword-heavy presentations at company all-hands.


They also need a clear and well-communicated Strategy.


By ensuring that the company is outlining expectations with a detailed and well-communicated Strategy, providing clear guidelines, and promoting open communication, you can create an environment where everyone feels valued and included.


As I mentioned above psychological safety refers to a work environment where employees feel safe to express their opinions, take risks, and bring their authentic selves to work without fear of negative consequences. Creating this kind of culture, one that inherently promotes feelings of safety, starts with understanding its importance and the impact it can have on individuals and the organisation as a whole.


Let's look quickly at why you should care about promoting psychological safety in the workplace before we move on to how you can do it.


The benefits of psychological safety in the workplace


1. Improved problem-solving and innovation


Employees who feel psychologically safe are more likely to share their ideas, challenge the status quo, and contribute to problem-solving. They are not afraid of making mistakes or being judged for their opinions, which not only encourages creativity and innovation, but leads you away from the kind of group-think that's a driving force behind the fact that 62% of UK businesses will fail before reaching year 5 because of solvable, but ignored, problems.


2. Increased engagement


Not only is a positive work environment essential for employee satisfaction, productivity, and overall company success, when employees feel safe, supported, and respected, they are more likely to be engaged, motivated, and committed to their work.


A positive work environment also reduces stress levels, and enhances teamwork, and improves collaboration. By creating that kind of environment, you'll be building a platform for better choices and helping your business navigate market forces more effectively.


3. Effective Conflict Resolution


In any workplace, conflicts are inevitable, especially in high-stress early-stage companies where a lot of people are doing a lot of things for the first time and the next wrong decision could shut your operations down. These conflicts need to be resolved as quickly as possible - and resolved in a positive way (which, for absolute clarity, doesn't mean that people stop talking about it because they've been shouted into submission - that's just a really quick route to your own personal Bay of Business Pigs).


Psychological safety enables open communication and constructive resolution of these inevitable conflicts. Employees are more likely to address issues head-on and to resolve their issues collaboratively. It's a proactive approach that helps prevent emotional escalation in the future and allows the team to focus on the company's goals rather than interpersonal issues and thus objectively improves operational efficiency.


4. Attracting and Retaining Top Talent


It's incredibly expensive and time-consuming to hire new people, get them onboarded, and get their value to the company ramped-up. Creating a workplace where employees feel psychologically safe helps you cut down on that time and expense because it's a powerful tool for attracting and retaining top talent.


In a competitive job market, particularly the one that surrounds the startup world, individuals are drawn to organisations that prioritise their well-being and professional development. Early-stage companies that invest in building a positive and supportive culture signal to potential hires that their contributions will be valued, making the company an attractive place to work and grow.


Remember, in the UK alone, there are 800,000 new businesses started each year and tens of billions of pounds are invested into those companies - why would the best talent settle for second-best at a psychologically dangerous business when they can feel appreciated and respected elsewhere?


5. Improved exit opportunities for your business


One of the first questions I ask Founders when we start working together is "What's your exit plan for the business?"


The ultimate goal of any investor who's poured money into an idea, or any Founder who's underpaid themselves for years, is to unlock value from equity. If a sale is your way to facilitate that, then mapping your exit plan from the start allows you to lay the groundwork for positioning your business as an attractive purchase for another company from day one.


One of the key things I look at if I'm running a buy-side M&A project is whether it's going to be a nightmare to integrate a purchased business into the parent company. A lot of M&A is about buying future revenue potential - that's why companies are open to paying multiples of existing revenue. That revenue potential is significantly decreased if the team doesn't have the resilience to navigate the integration. Psychological safety builds that resilience - essentially, take steps to build a positive culture for your team now and you'll find yourself buying a slightly larger private island in the future.


6. You owe it to your team


I'll add one final point here that I hope builds on those value-driven benefits above: treating your employees, the people who help you to deliver your business dreams and who are the power behind your capacity to make money, with kindness and respect is, at its core, just simply the right thing to do.


Forgive me, I have a degree in Moral Philosophy and a strong belief in the intrinsic value of a person - not for what they can offer me, but for the pure fact that they are a sentient being and they deserve to go through life being given basic respect.


Our actions have consequences for other people and (and I appreciate that my perspective on this isn't for everyone and I welcome a debate with you if you disagree) if a manager is valuing the economic output of a person over their mental health whilst under the company's leadership, I'd sincerely suggest asking why on earth that person is in a position of 'power' over others in the first place.


The role of leadership in creating a culture of psychological safety


Now we, hopefully, clear on why psychological safety is important, let's look at how to get it.


The work of creating a culture of psychological safety goes beyond simply implementing policies and procedures. It requires a genuine commitment from all leadership to foster an environment where every employee feels valued, heard, and included and feels clear on, objectively, what is expected of them, by when, and how they are performing against those expectations.


Leaders must lead by example, demonstrating openness, vulnerability, and active listening. They should encourage and empower their teams to share their thoughts, ideas, and concerns without fear of negative consequences.


Leaders need to create a safe space for open dialogue and constructive feedback, where employees feel comfortable expressing themselves. They should actively seek input from their teams, value diverse perspectives, encourage healthy debate, and take whatever steps they can to circumnavigate their own unconscious bias.


Most of all, Leaders must communicate objectively - there is no room for subjectivity in performance management if you want your employees to feel psychologically safe. Subjectivity is driven by bias and 'feedback' given subjectively - e.g. "I think you're doing a bad job" versus "I asked for x input, you delivered y input, which isn't what was clearly communicated" - does not drive improvements in behaviour. It creates confusion and resentment.


Let's look at some specific actions.


How to establish a plan for fostering psychological safety


To create a culture of psychological safety, organisations need more than just good intentions. A clear Strategy is paramount. By outlining expectations, providing clear guidelines, and promoting open communication, leaders can create an environment where everyone feels valued and included.


1. Communicating expectations and setting boundaries


One of the first steps in establishing a culture of psychological safety is to communicate clear expectations and set boundaries. Employees need to know what is expected of them and what behaviours are acceptable in the workplace. Clear guidelines promote accountability and help prevent misunderstandings or conflicts.


Your company Strategy is key here. By setting a clear Strategy to objectively communicate goals and tasks and by managing performance against those clear goals and tasks, a company builds psychological safety into the very fabric of its existence.


My best-selling eBook "How To Write Your Strategy" will take you through all the steps to build and communicate a clear Strategy.


how to write your strategy


2. Providing opportunities for open and honest communication


Open and honest communication is essential for creating psychological safety. Leaders should provide opportunities for employees to share their thoughts, concerns, and ideas without fear of judgment or retaliation. Regular team meetings (with appropriate planning), one-on-one discussions, and anonymous surveys are some effective ways to encourage open communication.


Leaders should actively listen to their employees, validate their feelings and experiences, and respond empathetically. They should create a space where individuals feel comfortable sharing their challenges and seeking support.


By fostering a culture of open communication, leaders can build trust and strengthen relationships within the organisation.


3. Encouraging collaboration and teamwork


Collaboration and teamwork are essential components of a psychologically safe work environment. Leaders should encourage cross-functional collaboration, promote teamwork, and recognize the value of diverse perspectives. They should foster an environment where individuals feel comfortable reaching out to others for help, guidance, or feedback.


Team projects, group discussions, and brainstorming sessions can help foster collaboration and build trust among team members. When employees feel supported and valued by their colleagues, they are more likely to contribute their best work and actively participate in achieving shared goals.


4. Recognizing and addressing issues promptly


In a culture of psychological safety, it is important to recognize and address issues promptly. Leaders should be proactive in identifying potential conflicts, biases, or negative behaviors. They should create a process for reporting concerns or incidents and ensure that appropriate action is taken - and taken transparently where possible.


They should investigate complaints thoroughly, provide support to those affected, and take necessary measures to prevent similar incidents in the future. By holding individuals accountable for their actions, no matter the seniority of that person, leaders send a clear message that psychological safety is a top priority.


Conclusion: Creating a culture of psychological safety is a continuous effort.


I'm a fan of the contractualist philosopher Tim Scanlon. The end of his excellent book What We Owe To Each Other essentially states that figuring out what we owe to each other, i.e. the rules we should abide by in how we act towards other people, is a never-ending task.


We'll always have to work hard to make sure that our actions towards others are morally-justified. Likewise, creating a culture of psychological safety is an ongoing effort, and it is important to measure and assess the impact of your work towards it regularly to identify areas for improvement and make necessary adjustments to your approach.


There are various ways to approach this cycle of continuous improvement, like conducting employee surveys, analysing turnover rates, or tracking employee engagement levels. By collecting this feedback and data, organisations can gain insights into the effectiveness of their efforts and make informed decisions.


Don't forget the include your team in that process; by seeking their input and feedback, organisations can gain a deeper understanding of their experiences and perspectives, and make changes accordingly.


It's a lot of work, but it's really really worth it if you want to build a successful company. And if you want some help, just give me a shout!



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