By: Maria Williams

Imagine a workplace where team members feel empowered to share ideas and take risks without fear of judgment. In such environments, creativity thrives, collaboration deepens, and performance soars. This is the reality for organizations that have mastered psychological safety — a key element in modern leadership that fosters innovation and engagement.

Irina Prosviriakova, a recognized expert in Psychological Safety, a PhD Candidate, and the founder and CEO of the International Training and Consulting Company, provides valuable insights into the critical role of psychological safety in modern leadership and organizational success.

The Evolution of Leadership

Leadership in today’s business world has shifted from authoritarian, top-down management to more collaborative, empathetic approaches. Leaders are now expected to inspire and motivate while being adaptable to rapid technological and market changes. Central to this new leadership paradigm is psychological safety, which emphasizes empowering employees, promoting diversity, and fostering a culture of continuous learning.

However, the challenges in maintaining this approach have been highlighted by recent developments in various industries. While companies like Microsoft have downsized their Diversity, Equity, and Inclusion (DEI) departments, raising concerns about their commitment to fostering inclusive environments, other organizations have continued to prioritize psychological safety as a cornerstone of their leadership strategies.

Understanding Psychological Safety

Psychological safety, popularized by Harvard Business School professor Amy Edmondson, is the belief that a workplace is safe for interpersonal risk-taking. In such environments, team members feel free to speak up, share ideas, and take risks without fearing negative consequences. Psychological safety drives creativity, collaboration, and performance, making it essential for organizational success.

When psychological safety is present, employees are more likely to:

• Engage in open communication
• Take risks and innovate
• Collaborate effectively
• Experience higher job satisfaction
• Promote continuous learning and improvement

The Role of Psychological Safety in Effective Leadership

Psychological safety is a foundational element that enhances the effectiveness of various leadership styles. Let’s have a closer look at possible links between psychological safety and modern leadership styles.

Transformational Leadership

Transformational leaders inspire and motivate their teams to achieve extraordinary outcomes by creating a compelling vision and fostering an environment of trust and mutual respect. Psychological safety is crucial for transformational leadership as it:

• Encourages open communication: team members feel confident sharing their ideas and feedback, which helps the leader refine and align the vision with the team’s strengths and aspirations.
• Promotes risk-taking and innovation: they can experiment and innovate without fear of failure, aligning with the transformational leader’s goal of driving significant change and progress.
• Fosters individual growth: leaders focus on the personal and professional development of their team members;psychological safety enables individuals to seek feedback and embrace learning opportunities, enhancing their growth and performance.

Servant Leadership

Servant leaders prioritize the needs of their team members, focusing on their well-being, development, and empowerment. Psychological safety is integral to servant leadership as it:

• Builds trust and respect: by ensuring a safe environment, servant leaders demonstrate their genuine concern for their team’s well-being, fostering trust and respect;
• Encourages collaboration: open dialogue and collaboration allow team members to work together effectively and support each other’s growth;
• Empowers team members: team members feel empowered to take initiative and make decisions, aligning with the servant leader’s goal of empowering their team.

Authentic Leadership

Authentic leaders are transparent, self-aware, and true to their values, building trust through genuine and ethical behavior. Psychological safety supports authentic leadership by:

• Encouraging Vulnerability: authentic leaders model vulnerability by being open about their mistakes and challenges; psychological safety creates a culture of honesty and learning.
• Fostering Transparency: leaders maintain transparency and open communication, reinforcing their credibility and trustworthiness.
• Building Strong Relationships: promotion of deeper connections and trust between the leader and their team.

Psychological safety is a critical enabler of various leadership styles, enhancing their effectiveness by promoting open communication, collaboration, innovation, and trust. By prioritizing psychological safety, leaders can create an environment where their chosen leadership approach can thrive, leading to higher team performance and organizational success.

The Impact of Psychological Safety on Team Performance and Organizational Outcomes

Psychological safety is a vital component that significantly influences team performance, organizational outcomes, and overall effectiveness.

Effects on Team Performance

• Increased innovation: psychological safety encourages team members to share novel ideas and experiment without the fear of failure. This openness is crucial for fostering innovation as team members feel empowered to think creatively and propose unconventional solutions. Google’s Project Aristotle study found that psychological safety was the critical factor in determining high-performing teams, as it enabled risk-taking and innovative thinking.
• Improved problem-solving: teams that operate in a psychologically safe environment are more likely to engage in constructive debates and discussions. This open communication allows for diverse perspectives to be considered, leading to more comprehensive and effective problem-solving. 
• Higher engagement and motivation: when employees feel safe and supported, their engagement levels increase. They are more likely to take ownership of their tasks, show initiative, and go above and beyond in their roles. A Gallup study revealed that engaged employees are 21% more productive and contribute to higher growth. 
• Enhanced learning and development: psychological safety fosters a culture of continuous learning. Team members feel comfortable seeking feedback, admitting their knowledge gaps, and learning from their mistakes. Organizations that promote learning from failure, such as Toyota’s practice of continuous improvement, consistently achieve high performance and innovation.

Organizational Outcomes:

• Better collaboration and team cohesion: in a psychologically safe environment, trust and mutual respect are strengthened, leading to better collaboration and team cohesion. Employees are more willing to support one another, share knowledge, and work together towards common goals. This collective effort enhances the overall performance and efficiency of the organization.
• Lower turnover rates: a supportive and safe work environment contributes to higher job satisfaction and employee retention. When employees feel valued and understood, they are less likely to leave the organization. Reduced turnover rates save the organization significant costs associated with recruitment and training and ensure continuity and stability within teams.
• Increased organizational resilience: organizations with a strong foundation of psychological safety are more resilient in the face of challenges and changes. The ability to adapt and respond to unforeseen circumstances is enhanced when team members feel confident in voicing their concerns and suggestions. This agility is crucial for maintaining competitive advantage in a rapidly changing business landscape.
• Higher business performance: the cumulative effect of enhanced innovation, problem-solving, engagement, and collaboration leads to superior organizational performance. Companies that prioritize psychological safety consistently outperform their peers. A study by McKinsey & Company found that organizations with strong, psychologically safe cultures were more likely to achieve higher levels of growth, customer satisfaction, and operational efficiency.

Psychological safety is a critical driver of both team performance and organizational success. Leaders who prioritize psychological safety are not only investing in the well-being of their employees but are also laying the groundwork for sustained organizational success.

A Unique Approach to Psychological Safety: The Novo Nordisk Case Study

Novo Nordisk, a global healthcare company specializing in diabetes care, offers a distinctive case study of how psychological safety can be cultivated through thoughtful leadership and a commitment to organizational values. 

The Triple Bottom Line: Balancing Financial, Social, and Environmental Responsibility

Novo Nordisk operates under a “Triple Bottom Line” philosophy, where the company’s success is measured not just by financial performance, but also by its social and environmental impact. This holistic approach to business creates a culture where ethical behavior, sustainability, and employee well-being are deeply intertwined. The leadership at Novo Nordisk emphasizes that creating a psychologically safe environment is essential for achieving these broader goals. This alignment between ethical values and psychological safety is crucial in fostering a culture of trust and openness.

Leadership’s Role in Building Trust

At Novo Nordisk, leadership plays a central role in fostering psychological safety. Trust is seen as the bedrock of psychological safety, enabling employees to take risks and innovate. One of the ways Novo Nordisk leaders build trust is through regular, open communication. For instance, senior leaders frequently engage with employees through town hall meetings, where they discuss company performance, upcoming challenges, and strategic initiatives. These meetings are not just top-down information sessions; they are interactive, with leaders encouraging questions and feedback from employees at all levels.

Empowering Employees through “Freedom to Operate”

Novo Nordisk has also implemented a concept known as “Freedom to Operate,” which is a principle that gives employees significant autonomy in their work. This principle is closely tied to psychological safety, as it empowers employees to make decisions, take risks, and innovate without the constant oversight of their managers. The “Freedom to Operate” concept is particularly evident in Novo Nordisk’s approach to research and development (R&D). Scientists and researchers are encouraged to explore new ideas and pursue innovative approaches, even if they involve significant risk. The company recognizes that breakthrough innovations often come from taking unconventional paths, and this is only possible in an environment where employees feel safe to experiment and fail.

Addressing Challenges and Learning from Failure

Leaders at Novo Nordisk understand that fear of failure can stifle innovation and creativity, so they actively work to create an environment where mistakes are seen as opportunities for learning rather than reasons for punishment. One example is the company’s response to a failed clinical trial for an aiming new treatment. Instead of sweeping the failure under the rug or blaming the team involved, Novo Nordisk’s leadership held a series of reflective sessions with the team and other stakeholders. The purpose was to understand what went wrong, identify lessons learned, and apply these insights to future projects. This approach not only mitigated the impact of the failure but also reinforced the psychological safety of the team, encouraging them to continue innovating without fear.

Lessons for Other Organizations

Novo Nordisk’s approach to psychological safety offers several valuable lessons for other organizations:

Align Psychological Safety with Ethical Values: when employees see that their leaders are committed to doing the right thing, they are more likely to feel safe expressing their concerns and ideas.

Empower Employees with Autonomy: by trusting employees to make decisions and take risks, organizations can foster a culture of innovation and continuous improvement.

Build Trust through Transparency: leaders who engage with employees transparently, addressing challenges openly and encouraging feedback build real trust

Embrace Failure as a Learning Opportunity: organizations should create environments where mistakes are not punished but are instead seen as opportunities to learn and improve.

Psychological safety is not just a leadership trend; it is a fundamental component of effective, humane management practices. As organizations navigate the complexities of today’s business landscape, the need for psychological safety has never been greater. Leaders who prioritize psychological safety will find that they are not only enhancing the well-being of their teams but also laying the groundwork for sustained organizational excellence.

Published By: Aize Perez