Psychological safety: Creating a workplace where all thrive

Can your team voice disagreement or admit mistakes without fear of termination? Learn how leaders can create a psychologically safe environment.

When I first started working at Deloitte’s Atlanta office, I thought I was a pretty good writer. Then I got revisions back on my first technical memo.

Suddenly, that confidence was washed away by a flood of red ink. Throughout the night and my commute the next day, I felt pure dread. Not only that: As a young Black woman, I felt like I was representing all Black people, and the weight of that was very heavy.

But before I made any rash decisions about quitting, I told my practice partner, Mike, exactly how I felt. In an instant, he had the perfect response — one that turned the experience from a horror story to a north star moment in my career.

Mike told me I was actually a great writer. They had hired me, in large part, for my writing skills. The extensive revisions were simply part of the learning process. Suddenly, I realized that there was room for red ink. My honest mistakes were not being held against me, and it was even OK to admit my stress, disappointment, and sadness to my boss.

Years later, I realized that this story exemplifies the power of a concept known as “psychological safety.” Identified as early as the 1960s by MIT researchers, the core question in psychological safety is whether team members feel they have permission to ask questions, disagree, take reasonable risks, and own up to mistakes without fear or the threat of loss to one’s self or employment.

Researchers have found that when a worker feels psychologically safe on their team, the team benefits from enhanced creativity and innovation; improved retention and satisfaction; and overall greater team strength and collaboration.

A survey highlighted by McKinsey found that only 26% of leaders create psychological safety for their teams. This statistic underscores the need for more proactive efforts by leaders to cultivate an environment where team members feel respected and accepted, even when taking interpersonal risks.

In my case, the way Mike responded gave me a sense of support, clarity, and confidence that would last through five more years at Deloitte and into my work now as the CEO of EverydayLead, a skills development and diversity consultancy.

Today, I believe that team psychological dynamics are an overlooked but crucial strategy in the war for talent. While many of my clients have used pay, perks, casual dress codes, PTO, and remote work locations to improve their recruiting efforts, I find that they often are lagging in retention as they struggle to create a sense of belonging and engagement for everyone, regardless of position.

The past few years have only made this topic more important. With the dawn of remote and hybrid work, I’ve heard from countless employees who have boundless talent, potential, and faith in the product or service itself — only to feel isolated and lost amid the bigger workplace changes. The same trends also are undermining companies’ diversity, equity, and inclusion (DEI) efforts, with subtle psychological factors driving burnout among women and diverse young staffers.

It’s all added up to my new mission in life: How do we collectively design a culture where people can try, fail, share, and improve without the threat of feeling dumb or the fear of termination? How do we ensure accounting is a practice of learning?

THE KEY FACTORS OF PSYCHOLOGICAL SAFETY

How can you tell if psychological safety is an issue for your team? I’ve identified the following factors from the work I do with clients and by reviewing the research:

• Team members are unwilling to speak up and share their ideas.
• They don’t admit to mistakes.
• They don’t take risks.
• They don’t ask for help.
• They don’t have long-term goals within the organization.
• They don’t feel valued for their contributions and skills.
• They don’t trust their team or leadership.
• They don’t share about the personal struggles (or joys) that are impacting their work.

Researchers have identified some fascinating examples of how these dynamics can play out in the real world. Amy Edmondson, a pioneer of a recent academic study of the topic, famously looked at nursing teams in hospitals and how they dealt with mistakes in providing medication.

Edmondson was trying to solve a riddle in her survey data: Groups that reported high measures of teamwork, for some reason, also reported higher levels of errors and mistakes. Eventually, the researchers realized that the “better” teams weren’t actually making more mistakes. They were just more willing to admit them — because, as Edmondson framed it later, they felt psychological safety.

On those safe-feeling teams, nurses shared the belief that a “certain level of error will occur” and that it was important not to create a punitive environment. On other teams, nurses felt that they would be put “on trial” or even belittled and made to feel incompetent for errors.

Edmondson argued convincingly that when leaders created a more open and candid dynamic, it was easier for team members to admit — and fix — their errors. Teams with repressive and toxic leadership, meanwhile, were unwilling (or even afraid) to admit mistakes.

I believe the accounting profession, known for its precision and accuracy, can be especially susceptible to these issues due to the high stakes involved in financial reporting, tax compliance, and auditing.

Testing, practice, and learning from errors is acceptable in medicine and the sciences, but open conversation is not always how learning is approached in the accounting profession.

Common sense tells us that when we keep our mistakes secret, we can’t improve our behavior — and whether it’s in a hospital or an office, that’s not good for anyone. A lack of psychological safety may be associated with increased stress and burnout; fear of speaking up; compromised ethical standards; low morale; decreased work quality; and stifled creativity.

SETTING A BASELINE

A focus on psychological safety can be the foundation for an improved team culture. But before that can happen, it’s important to address misconceptions and questions.

Sometimes, leaders simply refuse to believe that their team might have an issue. They think that everyone feels comfortable and confident and that leadership provides all the feedback that employees need. But when I conduct interviews with team members, I hear a very different story.

That’s why the first step in addressing psychological safety is to establish a baseline. Someone — preferably a neutral third party like a talent developer or a consultant — needs to collect data and conduct conversations across the team.

Core questions include:

• Do you feel comfortable interrupting your manager to ask questions?
• Do you feel valued for what you do or who you are?
• What do you do after making a mistake at work?
• Are your opinions welcomed and acknowledged?
• Do you feel comfortable disagreeing with senior leaders on the team?
• Do you know how to discuss or report an incident of bias?
• What behaviors, large or small, would you like your teammates to change?

Answers to these questions can be tough to hear. It can even be difficult for employees to express the deeply internalized behaviors that can result from workplace insecurity. For all sides, it can feel as if delving into the topic will open a can of worms — emotions, frustrations, and dysfunction.

But it’s well worth doing. Every team, even a good one, is affected by subtle interpersonal dynamics. Addressing them calmly, confidently, and with empathy is a benefit to all.

So, how do we do that?

THE ROLE OF LEADERSHIP IN ADDRESSING PSYCHOLOGICAL SAFETY

There’s a common misconception about psychological safety and related ideas. Too often, leaders think that I’m asking them to “go easy” on employees and to not give constructive feedback. They fear that when we talk about a safe environment, we really mean one of “constant comfort,” pampering, and praise, where no one can be criticized or held accountable for their failures.

I get it, but that’s not it. When it’s done right, psychological safety actually encourages accountability rather than blocking it. We’re not coddling employees. We’re giving them room to fall down and pick themselves up quickly.

Here are a few steps that team leaders, executives, and others can take:

• Change how you talk about mistakes. It’s good to tell people about mistakes. But the goal isn’t to scare them into behaving better. A conversation about a mistake or error should be about determining the cause of the mistake, offering a way to avoid it in the future, and reminding the employee that it’s part of a learning journey.
• Change the delivery tone. How leaders communicate — their choice of words, voice modulation, and overall demeanor — significantly affects team morale and comfort levels. A harsh, demeaning, or dismissive tone and microaggressions create an atmosphere of fear and silence, stifling creativity and engagement. By carefully managing tone, leaders can nurture a culture of trust and inclusivity, essential for sustaining high performance and innovation. This approach not only enhances team dynamics but also contributes to employee well-being and retention.
• Institute after-action reports. These can be a way to review what went wrong and what went right after a project, a milestone, or an emergency. Make it a regular practice, whether things went poorly or not. Instead of receiving a dreaded call to meet the manager when they’ve messed up, employees will know that their team always seeks to acknowledge strengths and mistakes in service of better performance.
• Open communications. Your team’s frustrations and fears often live beneath the surface. People may go months or years without expressing them, especially if they’ve decided that it’s easier to simply keep the peace. Make time to ask about what’s going right and wrong or simply to talk. Create, define, and teach every person the process of direct, open, and honest communication that is not personal but developmental.
• Change your mind. Good leaders care about their team and their work. That can make it hard to hear that things aren’t going well. Great leaders have the emotional resilience to stay calm and neutral when they hear complaints about their team’s culture. Rather than hearing those comments as personal criticism, use them to inform your journey to level up your leadership and your team.

CONCLUSION

Creating a psychologically safe environment won’t be easy, simple, or predictable. But it’s time to break old habits and relearn how we “practice” accounting, provide feedback, and lead the next generation.

It will be a worthwhile endeavor to address talent retention. You won’t get it right on the first try. Indeed, no team will ever be “perfect.” And that’s OK: We’re not aiming for perfection. We’re just trying to take a few steps forward, day by day, with kindness and dignity.

Thinking back to my own “red ink” experience at Deloitte, I know that Mike’s reassurance and explanation of the learning process strengthened my trust in him and the other managers. Most importantly, it was an invitation for me to take risks.

Mike’s support was the assurance I needed as the only woman in the practice to know that I belonged and earned the right to be there. It changed a moment that could have derailed my career into one that propelled it forward. Let’s do the same across our profession.

About the author

Jeannine K. Brown, certified professional coach, is founder and CEO of skills development and diversity consultancy EverydayLead. (Andrew Kenney, a freelance writer based in Colorado, contributed to this article.)

LEARNING RESOURCES

MBAexpress: Effective Change Management – V2.0

How do you react to change? Change is difficult, even when it is good and for the right reasons. This course discusses various methods and ideas to consider in helping you navigate the turbulent waters when dealing with change.

CPE SELF-STUDY

AICPA & CIMA ENGAGE Conference

Firm practice management is one of more than a half-dozen tracks delivering up to 42 CPE hours at the biggest accounting event of the year, held at the Aria in Las Vegas.

June 3–6, 2024

CONFERENCE

For more information or to make a purchase, go to aicpa-cima.com/cpe-learning or call the Institute at 888-777-7077.

AICPA & CIMA RESOURCES

“Increase Accountability in Your Firm”, AICPA & CIMA, Sept. 30, 2023

“Mental Health: A Business Imperative”, AICPA & CIMA, Sept. 30, 2023