Why creating a psychologically safe workplace is key to high performance in uncertain times

Change is constant, but constant disruption can feel overwhelming. As business leaders worldwide grapple with the impacts of macroeconomic uncertainties and geopolitical tensions, you can be forgiven for forgetting that the workplace should be a psychologically safe place for your employees — in good times and in bad.

Ironically, it can be the times of greatest disruption that lead to the most uncomfortable workplace environments. Traditional industry response to disruption has always been to cut costs, drive efficiencies and trim the proverbial fat — meaning job losses, uncertainty and a lack of security. Furthermore, companies don’t always do it in a purposeful or strategic way that allows for a positive response from the remaining employees to ensure the necessary growth can take place next. Many businesses are left trying to do everything they were doing before, with fewer, poorly-targeted resources.

In short-term economic cycles with quick upturns, this approach tends to work. Good times return and business booms again. But when we face long-term disruption and the potential for unknown threats, a different approach is required or burnout and disengagement will run riot.

The opposite of psychological safety is a 'fight or flight' response. This reactive, physiological response — supposed to alert us to threats in caveman times — hasn’t quite adapted to the stresses of modern life and work. Instead, it can permeate to form a company-wide mentality that overestimates risk and diminishes opportunity. This can lead to silos and in-fighting on less important details and creates a culture of fear that is defined by safe bets: conservative decision-making, fear of challenging ideas and a lack of creativity.

Fight or flight behaviours also turn companies inward looking, or worse: backward looking. It is not an exaggeration to say that this very human response to uncertainty can destroy successful businesses from within.

To prevent fight or flight and talent flight following soon after, companies must clearly define and emphasize their shared purpose and set clear boundaries and expectations that serve to reduce pressure on overwhelmed employees. It’s a shift in culture: away from one that emphasizes the quantity of time at work, to one which emphasizes the quality of the time and outcomes from your workplace.

Successful companies in any industry operate with a culturally shared sense of certainty, clarity of purpose and a well-defined collective spirit that fosters a genuine belonging at work – one that at the times of greatest disruption leads to the most uncomfortable workplace environments, as well as tangible impacts for growth, strong retention and day-to-day operational efficiencies.

But let’s be clear: this shared culture of psychological safety is not the outcome of surprise and delight pizza deliveries or dog-friendly offices — nor is it the privilege of ‘perfect’ workplaces where everyone is delivering success and performing at high levels at all times. In business, like in life, the best workplaces operate in a state of shared flow: a familiarity, a consistency of quality and a shared sense of ownership in outcomes, underpinned by behaviours and standards that bring out the best efforts in everyone each day.

We encourage leadership teams and employees to focus on a shared culture of transparency, accountability, authenticity and trust. In any hierarchical setting, this is best led from the top and leaders should be prepared to take the first step.

For leaders who are new to this approach, we stress the pillars of humility, clarity and consistent advocacy for the behaviours you want to see from your employees. Employees can, understandably, find it hard to be fully transparent or relaxed with the people who are ultimately responsible for their livelihoods — but it’s important that they know when it comes to their work, everyone has a seat at the table. This is defined by:

• An environment where people can try, fail and learn from their experiences.

• A group sense of pride, clarity and ownership of company outcomes.

• Individual understanding of one’s role and contributions to the bigger picture.

• Clear boundaries where people can share ideas, feelings and feedback without fear of shame, dismissal or retribution.

• A place where employees and leadership share a meritocracy of ideas and creativity — the best idea or approach.

Looking at the list above, it seems simple in practice – but we forget that companies and people can be complex and multifaceted. Employees have enough to worry about in their personal lives, so it is up to companies to create a persistent bubble that enables people to be at their best whenever they are working.

Companies that are winning now are high on purpose, clear on direction and high on growth mindset. They have the ability to change, take risks and move things forward. They experiment, they win or they learn. They do things differently and move forward — together.

Part of having that growth mindset and psychologically safe work environment is changing the implication of failure: accepting its likelihood and persisting accordingly. To maximize success and to overcome the challenges of modern times, companies must focus on their cultures and create psychologically safe work environments where employees can do their best work and their execs can make their decisions with clarity and calm for the betterment of the company as a whole.