5 things every business owner needs to know about psychological safety

Psychological safety has emerged as a critical factor in organisational success. Global studies reveal that companies lose up to $1 trillion annually due to workplace conflicts, making it essential for businesses to understand and implement strategies that create psychological safety.

Psychological safety goes beyond traditional workplace wellness concepts. It’s where employees feel:

• Comfortable speaking up with ideas, questions, or concerns.
• Confident that they won’t be humiliated, punished, or marginalized for their honesty.
• Empowered to take calculated risks and innovate.
• Valued as individuals, not just as workforce resources.

Here are five things worth knowing about psychological safety for your business

1. What causes a work environment to feel psychologically unsafe?

 Think of this as constant draining of energy which causes alarm in people’s brains. This could be caused by a range of psychosocial hazards such as:

• Work designg. lack of clarity, role conflict, workload.
• Interactions with othersg. accepted poor behaviour, insufficient social support, communication breakdowns, limited channels for raising concerns.
• Change/uncertaintyg. job insecurity, changes in processes.
• Work demandg. complexity of task, decision making pressure, emotional and cognitive load.
• Individual challengesg. what is happening outside work.

In simplistic terms, safety comes from who we are as individuals, how we interact with others and how we then collectively navigate the tasks themselves. We are tribal by nature. We want to belong and feel valued. When we do, we feel energised and safe. When demands keep draining our energy, we start to feel unsafe.

2. What’s the cost of a psychologically unsafe workplace?

Direct costs include:

• Higher turnover and recruitment costs
• Constant training for new hires
• Higher absenteeism
• Investigation costs from harassment claims
• Productivity losses from disengaged employees
• Increased workers’ compensation claims.

Other costs include:

• Suppressed innovation
• Reduced problem-solving capabilities
• Homogeneous thinking
• Decreased employee discretionary effort
• Talent and knowledge drain as top performers seek better environments.

Most critically, your business doesn’t reach its full potential.

3. What are your legal obligations?

You have a legal obligation to ensure, as far as is practicable, a physically and psychologically safe workplace. Governments are increasing scrutiny this. Workplace inspectors may ask employees:

• Do you know what a psychosocial hazard is and how do you report it?
• Do you feel safe to raise these issues without fear of consequences?

They may also examine complaint records, review team turnover rates, assess risk management and training programs and evaluate culture and communication practices.

Non-compliance can result in substantial personal and company fines.

4. What are the transformative benefits of psychological safety?

Before you groan at the idea of more ‘bureaucracy’, it is valuable to change your frame of reference to the benefits:

• Improved productivity and performance
• Faster Problem identification
• More effective problem solving
• Continuous process improvements
• Increased innovation
• Enhanced collective intelligence

5. Where do you start?

While there is a process you can follow to help identify where risk lies, at the heart of it all, is how you are leading the organisation. You cast a significant shadow. Increasing your own self-awareness is where you start.

• What do you do to look after your own energy so you can be engaging and curious with your team?
• Be honest with yourself on how you navigate conflict. Do you run for the hills? Assert your view as the right way through?
• Do you react with frustration or compassionate curiosity when things don’t go to plan?
• Notice when you’re in ‘I am right’ mode. What can you do to become more curious about truly listening to other ideas, coaching not telling?
• How well do you know your team? Safety starts with feeling like we belong. Find out what you have in common with them outside work and bring that into conversations.
• When you see someone ‘blow up’ or withdraw, get compassionately curious. Use ‘help me understand’ to unearth where bottlenecks lie.

Invest in skill development in your teams to build their ability to own their own behaviour and have effective conversations to curiously explore issues. When you have strong relationship foundations it is then easier to get collectively curious on the other environmental issues causing concern.

Psychological safety isn’t easy, but it is worth the investment of curiosity. Don’t get caught in tick-box exercises or put your head in the sand. Psychological safety unlocks organisations. Fear creates a culture of silence to fit in. Silence kills a business. Don’t let it kill yours.

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