Transformative Impact of Psychological Safety in Organizations: A Comprehensive Analysis

Transformative Impact of Psychological Safety in Organizations: A Comprehensive Analysis

01-Silence is golden

In 2011, as an organizational development consultant for a century-old American multinational heavy industry company in the Asia-Pacific region, my first project was to conduct a cultural diagnosis for a 4,000-person factory. This factory had an old-fashioned work style, and many employees couldn’t even speak English.

Meanwhile, the American company sent people with a typical foreign company style – appointing a foreigner as the general manager and bringing in a group of foreign employees to oversee the operations. As a third-party organizational development consultant from the headquarters, my first impression of this factory was that it was incredibly “quiet.” The entire factory, with thousands of employees, was silent, without a sound. When people sat together, everyone remained silent, looking at the boss, waiting for him to speak. My mind told me that this factory had significant issues, and there must be a problem with its culture.

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On the contrary, during one-on-one interviews, because we were third-party consultants, people had a lot of voices and concerns they wanted to express. It was evident that everyone still wanted the company to succeed. However, at that time, as a newcomer to the field, I didn’t have a deep understanding of group dynamics and the theory of psychological safety. I just found it strange that despite having many good ideas, people were afraid to speak up.

Douglas McGregor proposed the famous Theory Y and Theory X. He referred to traditional management concepts as Theory X, which believes that:

  • People’s nature at work is passive, so stronger supervision is needed, such as through piece-rate wages.
  • Theory Y, on the other hand, believes that people’s nature at work is proactive, and as long as intrinsic rewards are emphasized over material rewards, it can stimulate people’s enthusiasm for work.

The state of that factory at the time could be completely explained using this theory. The factory was originally a state-owned enterprise and had developed solely based on a traditional management system. The management still used a “carrot and stick” approach to supervise employees. The employees were afraid to speak up during normal times, fearing criticism from the boss. When the group of foreign employees arrived from the multinational company, they became a “minority” and were also cautious in expressing their opinions. As a result, silence became a prevalent epidemic, making the entire factory lifeless. We referred to this state as the “elephant in the room” – everyone saw the problem but remained silent, afraid to point it out. When we informed the foreign general manager of this issue, he was particularly excited and said, “I can no longer tolerate this! It’s too stifling here!”

Afterwards, I worked in many other companies and conducted numerous projects for clients in various industries. I found similar examples were abundant. This epidemic of silence has spread across industries and permeated all levels. Whether it’s in emerging industries or traditional ones, whether you are a seasoned professional or a newcomer to the workplace, there is a chance to witness it.

02-“Psychological safety” is a penetrating force for organizations.

I first came across the book “The Fearless Organization” in 2018, and it had a profound impact on me. The book vividly explains the dangers of remaining silent in the face of problems and challenges. For a long time, I couldn’t understand why we, as rational beings, would make foolish and irrational mistakes in organizations. However, in “The Fearless Organization,” I realized that behind these foolish and greedy actions, there is a tremendous untapped energy field, which is the momentum to speak up and provide feedback.

Since the beginning of the reform and opening up forty years ago, we have made rapid progress, with GDP growing at a rate of 6-7%. Many organizations have also benefited from this reform. However, when the growth rate of organizations slowed down in 2019, the problems within the organizations became more apparent. That year became a turning point, as many people said, “2019 was the worst year in the past decade, but it will be the best year in the next decade.” So, filled with great hope, we entered 2020, a year full of turmoil, uncertainty, anxiety, and even fear.

In the present and foreseeable future, the external market uncertainties have become more acute for many organizations. COVID-19, credit crises, economic slowdown, and tightening national policies have placed us in a VUCA (volatile, uncertain, complex, and ambiguous) environment, where every one of us must face the challenges. In such circumstances, I have witnessed emotional outbursts and the crumbling of psychological defenses. Many executives’ assumptions and confidence in the future have been shattered. I have been contemplating what kind of organizational strength can support us in moving forward fearlessly.

After reading “The Fearless Organization,” I realized that strong psychological safety is a new organizational resilience that can sustain us as we navigate through the VUCA world.

03-Psychological safety is the cornerstone of high-performance teams.

In this book, it is mentioned that Google has a famous “Aristotle Project” in an attempt to find the basic algorithm for high-performance teams. Despite assembling the world’s best and brightest talents, Google still experiences situations where some teams excel while others lag behind.

Prior to this research, like most CEOs in organizations, Google’s executives believed that building the best teams meant hiring the most exceptional talents. It sounds right, doesn’t it? Bring in the best engineers and the most talented product managers available in the market, and everything will be fine! However, they found themselves wrong, and very wrong!

In this two-year large-scale study, Google discovered that the best-performing and most innovative teams had one common factor: “psychological safety.” This means that team members in psychologically safe teams believed that expressing their opinions was accepted and that they would not be punished for making mistakes.

This is an atmosphere that can only be understood but not easily explained, often referred to as a “psychological safety field.” Interestingly, if you happen to be a member of a team with a high level of psychological safety, you can truly feel this atmosphere. Under the influence of this atmosphere, you will firmly believe that even if you try to do something different and fail, you will not be punished, treated unfairly, or fired as a result.

According to Google’s research, groups with high levels of psychological safety tend to exhibit the following behaviors: everyone has an “equal” opportunity to speak in meetings conducted in a round-robin format, and there is an emphasis on “exaggerated” listening. This may seem perplexing, right? In a team of elites like Google, how is it possible for anyone to be afraid to speak up? Google’s Chief Innovation Officer said, “No one wants to leave their personalities and inner lives at home. But in order to fully engage in work and experience ‘psychological safety,’ we need to know that sometimes we have enough freedom to share the things that scare us without fear of blame. We need to be able to talk about the messy or sad things and have difficult conversations with colleagues who drive us crazy. We can’t just focus on efficiency.”

Ultimately, the more secure team members feel, the more likely they are to admit mistakes, become close collaborators, and take responsibility. At the same time, individuals with high psychological safety in the team are less likely to leave Google, and they are more creative, efficient, and capable of creating more value.

04-Learning to express emotions freely

Traditional organizations encourage individuals to showcase their “professional strength,” so we should also try to hide our “vulnerabilities and insecurities.” However, organizations with high psychological safety want every individual in the organization to be mentally and emotionally well, without the need to wear masks in front of each other, and even have enough safe space to show their vulnerabilities and fears. Due to the strong trust and connection established among individuals in the organization, people are willing to open up and share.

When providing consulting services to clients, I have observed that there are two types of roles within an organization: the rational individuals and the emotional individuals. Many of us believe that we are highly logical and rational, and that our decision-making is based on rational analysis. However, in reality, our unconscious emotions often play a dominant role in decision-making. When this unconscious emotional influence permeates the organization without self-awareness, it can create a strong sense of organizational insecurity, which in turn affects the efficiency of the organization.

This emotional dynamic exists within the relationships between individuals, rather than as independent entities. Therefore, we often use a tool called the “Circle of Trust” to help team members within an organization address negative emotions. This process is an important part of building a psychologically safe space. The Circle of Trust creates a space for team members to take a break from their busy work and engage in discussions and sharing of deep thoughts on various topics, including even personal ones. Through this process, team members gradually let go of their masks and sincerely face each other.

The topics discussed in this safe space focus on:

  • The relationship between myself and my own self
  • The relationship between myself and others
  • The relationship between myself and my work

By creating such a safe space, team members become more willing to confront failures and challenges, expose their vulnerabilities, and develop greater tolerance and acceptance.

05-Leaders need to actively create a positive sense of psychological safety in order to establish a high level of psychological safety within a team.

In traditional organizations, leaders are often seen as the most powerful, intelligent, and authoritative individuals. However, for leaders who want to create high-performing teams, they need to adopt a new and “unsafe” approach to fostering psychological safety.

1.Drop the mask and be authentic:

For leaders, it is challenging to truly be liked and understood by their colleagues. However, in order to create psychological safety, leaders need to treat others the way they want to be treated. This means taking the time to understand the preferences of team members regarding things like communication styles, work hours, and attendance.

2.Perceive and respond, be open and transparent:

Transparency is crucial in creating psychological safety. Leaders can follow the example of Ray Dalio from Bridgewater Associates, who openly shares almost all meeting recordings for everyone to listen to and encourages colleagues to provide sincere feedback. In the age of information, openness and transparency have become fundamental principles for companies to adapt quickly to external changes. Encouraging employees to bypass hierarchical constraints when necessary can also help accelerate innovation.

3.Embrace diverse perspectives and encourage challenges:

Leaders in the new era face the challenge of maintaining focus on their teams while navigating rapid changes. The desire for quick consensus in meetings often leads to temporary and hypothetical agreements that may not be effective. Additionally, some individuals may avoid expressing their opinions to avoid disagreement with more senior colleagues. In contrast, leaders should adopt a curious and open mindset, asking questions and transforming closed statements into open-ended questions to gather more information. They should also encourage team members to express different opinions and even challenge their own ideas. A truly progressive meeting is one where diverse voices are heard, and individuals build upon each other’s perspectives.

Organizations are complex organisms, and psychological safety equips us with the most powerful weapon to navigate the VUCA (volatile, uncertain, complex, ambiguous) world fearlessly. It provides us with a sense of clarity and resilience, allowing us to confront uncertainty head-on.

Author: Emily Parker

Meeting outcomes expert who has served as a senior executive at Google and Facebook,

responsible for organizing and conducting various types of meetings. With extensive experience and expertise in meeting planning and execution.

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