If someone were to ask you, “What’s the key to building an effective and high-performing company?” what would you say?

Here’s what we would start with: an environment of psychological safety. 

Harvard professor Dr. Amy Edmondson first coined the term “psychological safety” and defines it as “a belief that one will not be punished or humiliated for speaking up with ideas, questions, concerns or mistakes."

With a culture of psychological safety, employees are open to bringing their whole selves to work and feel included, valued, and free to contribute. 

But it goes beyond just comfort.

Psychological safety has a profound impact on creating high-performing teams. Take Google, for example. Google researched more than 180 of its teams for two years and determined that psychological safety is the top indicator of their performance. Their research also found that psychological safety leads to employees sticking with the company and embracing diverse ideas, which, in turn, increases revenue. 

There isn’t one direct path to psychological safety but numerous factors and considerations, which Timothy R. Clarke showed in his four stages of psychological safety:

1. Inclusion Safety. Employees feel included, valued, and appreciated.
2. Learner Safety. Employees feel free to experiment, make mistakes, and ask for help.
3. Contributor Safety. Employees feel comfortable sharing ideas without fear of being ridiculed.
4. Challenger Safety. Employees can question other people’s ideas.

Psychological safety is more than just nice to have. McKinsey says it’s a “precursor to adaptive, innovative performance — which is needed in today’s rapidly changing environment — at the individual, team, and organization levels.”

Developing psychological safety within your company requires taking risks, setting the example, and often transforming the mindset and culture. 

Here are four ways you can lead the charge toward creating an environment of psychological safety in your workplace:

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Step One: Showcase Vulnerability and Empathy

An essential element of psychological safety is human connection built through vulnerability, humility, and empathy. For employees to feel safe and like they belong to the team, they must have emotional ties. 

A culture that celebrates and develops emotional intelligence starts with the example of executive leadership. As executives and managers embrace and demonstrate characteristics like empathy and vulnerability, they invite others to do the same.

Team leaders are more likely to support and consult their teams when senior leaders demonstrate inclusiveness. Demonstrating emotional intelligence requires tapping into the human side of business and leadership by being open with challenges, admitting mistakes, practicing self-awareness, sharing authentic updates, and seeking out opinions that may differ from your own. 

“Vulnerability is the birthplace of innovation, creativity, and change,” said vulnerability expert Brené Brown. “If you’ve created a work culture where vulnerability isn’t okay, you’ve also created a culture where innovation and creativity aren’t okay.”

Brown also notes that vulnerability leads to increased trust, which builds a culture of support and belonging. 

When Howard Schultz returned to Starbucks in 2008 after being away for nearly eight years, he inherited a company at the height of the financial crisis heavily criticized by employees and customers. Schultz was open and vulnerable about his challenges, apologized for past missteps, and wasn’t afraid to ask for help. That transparency and vulnerability played a significant role in Starbucks’ turnaround. 

Demonstrating emotional intelligence comes with risks, but the result of increased innovation and connection is well worth the discomfort.

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Step Two: Seek Out and Appreciate New Ideas

One measurement of psychological safety is how comfortable and safe employees feel sharing ideas. Worldwide, half of employees don’t feel comfortable speaking up, most often because they don’t believe managers and colleagues will listen to them. 

One way to fight this uphill battle of building a safe place to speak up is to create opportunities for employees to voice their honest thoughts, feedback, and suggestions. This feedback comes in many forms, including facilitating engaging in-person discussions with the right questions, having an open-door policy with employees, and encouraging feedback through email or online collaboration tools.

Providing outlets invites employees to brainstorm and share ideas. But it’s only half the solution. Hand in hand with creating opportunities for feedback is valuing and appreciating new ideas.

Employees are more likely to provide feedback when their ideas are heard and valued instead of being ridiculed or shut down. Leaders across the company can adopt affirmative language, which has been linked to motivating people to succeed. Using words like “opportunity” and “haven’t yet” instead of “challenge” or “can’t” fosters a positive environment and a growth mindset within teams.

Not every idea will take off, and employees realize that. But by accepting and listening to all types of feedback and ideas, employees will feel safer making contributions until they find a great idea that could transform your company.

Read our tips for giving effective performance feedback 👉

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Step Three: Encourage Experimentation and Failure

Fear of failure is a common and significant pitfall to developing psychological safety. When employees are afraid of failure or the consequences of making a mistake, they are much less likely to take risks, experiment, and challenge the status quo. But when employees feel safe at work, they are more willing to try something new. That mindset shift comes from a company culture that celebrates failure instead of ridiculing it.

Many of the most innovative and successful companies welcome failure as a way to try new things and make improvements. Destigmatizing failure starts by removing blame and the idea of perfection and instead encouraging questioning the status quo and looking for better solutions. 

Coca-Cola celebrates failure by awarding it — literally — with the annual Celebrate Failure Award. Past winners have failed to launch new products but used the insights from their failures to find greater success. 

“We must learn to celebrate failure to prevent stasis. The only true failures are situations in which we fail to learn. Learning is never a failure and makes our innovation muscle stronger and sharper,” said CEO James Quincey. 

Coca-Cola leaders are open about their failures and create an environment that welcomes innovation instead of limiting employees with fear. 

To build psychological safety, leaders must be honest about their failures and provide employees with the support and resources to try new things and experiment.

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Step Four: Systemize Leadership Development

Psychological safety can be a core tenant of your company’s culture, but it is best put into action by individual employees and managers. It can be nearly impossible for a company to create a safe environment for every employee solely with large-scale initiatives. Each manager plays a crucial role in building psychological safety within their team. 

Manager training on psychological safety provides them with the tools to create a safe environment with their smaller teams. The most effective way to train managers and leaders on psychological safety is to demonstrate it within the training. A training session is the perfect place to showcase a safe environment where each member is included, valued, and feels safe making contributions and challenging the views of others.

Research from McKinsey found that leaders who successfully build psychological safety “act as catalysts, empowering and enabling other leaders on the team — even those with no formal authority — to help cultivate psychological safety by role modeling and reinforcing the behaviors they expect from the rest of the team.”

Continually training managers on psychological safety embeds the culture into every team and builds a new generation of supportive and inclusive employees. Managers who are trained on all aspects of psychological safety and emotional intelligence set the tone in their teams and have a strong influence on the overall environment of the organization — both now and in the future. 

Psychological safety is the foundation of every high-performing team and company. And it starts by focusing on four key areas:

1. Demonstrating emotional intelligence. Leaders set the tone by practicing vulnerability, humility, and empathy. 
2. Seeking out and appreciating feedback. Create opportunities for employees to share feedback without fear of rejection. 
3. Reframing failure. Destigmatize failure and celebrate the innovation and lessons learned.
4. Training managers by example. Empower managers to develop psychological safety in their own teams. 

Creating a safe environment requires vulnerability and a strong example from managers, but it can pay off with strong collaboration, innovation, and growth. 

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Looking for help to systematize your company's manager development? Campfire can help. Get in touch 👉