This week, NeuroCapability CEO LINDA RAY considers how organisations will emerge from COVID-19 and how those who understand the importance of psychological safety will be the ones that not only survive but thrive. Linda is hosting a free webinar on Wednesday, 6 May, starting at 12noon. Click here to register.
If we look to the crux of what drives not only positive culture but business success within a company or workplace it comes down to a single critical factor – the degree of psychological safety that is present.
How do I know this? Because I have measured it and been able to prove without any doubt that there is a very real correlation between psychological safety and team and business performance. The influence a direct leader has on a team is linked to the team’s level of psychological safety and the team members’ experience of the relationship with that leader. A leader’s capability to create a climate where the people that report to them feel appreciated, respected, trusted and able to ask for help is a key driver of team and business performance.
The Covid-19 environment has created unprecedented challenges to our economy and businesses. It has also placed business owners, leaders and employees under more pressure and stress than many have experienced before. The organisations that understand the importance of psychological safety will be the ones that not only survive but thrive in a post Covid-19 environment.
Why psychological safety is the key ingredient of high performing teams
Google tried to codify team effectiveness as a key goal of project Aristotle to uncover why some teams excelled and others fell behind. To determine this, they turned to Amy Edmondson, whose research focussed on social norms and they found five key ingredients they determined were the secrets to team effectiveness.
They identified firstly dependability – team members got things done on time and met expectations. Secondly structure and clarity – clear goals and well-defined roles. Thirdly meaning – work has personal significance to each team member. And, fourthly, impact - work is purposeful and positively impacts the greater good. The fifth one, however is the key - psychological safety - ‘a sense of confidence that the team will not embarrass, reject or punish someone for speaking up. It describes a team climate characterised by interpersonal trust and mutual respect in which people are comfortable being themselves’ (Edmonson 2012).
High levels of psychological safety ensure people feel free to take risks, voice opinions, ask judgement-free questions and leaders provide air cover for their team and create safe zones.
In psychologically safe workplaces, high levels of trust and mutual respect are the norm. People feel free to be themselves, to speak up and speak out and to try new things. Our experience of psychological safety profoundly affects our engagement and our capacity to collaborate effectively with others. Psychological safety is the single largest contributor to productivity and the most important factor present in high performing teams and organisations.
Why psychological safety is the key factor in business success
Google and Gallup’s research has demonstrated that higher psychological safety drives the attainment of KPIs. Our own research in partnership with our sister company Conductor Software has proven beyond a doubt the relationship between psychological safety and its impact, for better or worse, on key business metrics.
Our work within the retail sector has uncovered strong correlations between the level of psychological safety and its influence on sales conversion rates. Stores with higher psychological safety outperformed other stores with lower psychological safety. The difference in sales conversion rates is staggering. We saw 40% differences in sales conversion rates. Companies stand to lose millions of dollars in unrealised potential when they don’t find ways to address low psychological safety in their teams.
The cost isn’t only financial. Low psychological safety can lead to poor engagement, poor employee wellbeing and mental health issues.
Why leaders are the critical influencing factor
When we first began researching leadership influence on psychological safety we expected that leaders would influence the psychological safety climate of their teams given research by Gallup that suggests that leaders influence engagement levels of teams by up to 70%.
Not surprisingly, teams with low psychological safety scores also saw low scores in leadership influence. Low leadership influence scores also negatively influence attainment of KPIs. What was surprising is how fast psychological safety was impacted by a new leader joining a team. Within a very short time, psychological scores either plummeted or skyrocketed when a new leader began to influence the psychological safety of the team. And you have probably already guessed this – sales conversion rates also either skyrocketed or plummeted. Leadership matters and right now leaders are influencing the psychological safety of team members and business performance and ultimately the chances of survival and recovery in this Covid-19 environment.
If you can see the importance of Psychological Safety in your future, click here to register for the free webinar.