Friday, September 1, 2017

The Promises and Risks of Psychological Safety

Several years ago, I was working with the CEO of a Fortune 500 company to organize a task force of senior executives on a special short-term project. At the kick-off meeting, the CEO explained the purpose of the task force, why each of them was selected, and his expectations of the project. He was making some observations about the state of the business and the industry when John, a Vice President and one of the task force members, raised his hand to express his point of view about a business issue that was at odds with what the CEO had stated. As far as I could tell, John made his point respectfully and politely. Yet the CEO (who was known to have a temper) bristled at the comment and pretty much shut John down. John remained quiet for the remainder of the meeting. An hour later, I visited John to check in on him. He was still visibly upset, and told me that he half expected his computer to be shut down and for Security to walk in to escort him out of the building – all because he dared to disagree with the CEO!

As those of you working in organizations are aware, and as the research indicates, getting employees to speak up is a challenge for many companies. At Wells Fargo, many workers were fired for raising questions about the legality of its practices for signing up customers for credit cards. In his terrific book about Alan Mulally and Ford’s turnaround (Hoffman, 2012), the author describes a meeting between Mulally and his executive team where Mark Fields, then head of the Americas, admitted that there was a problem with the pending launch of the Ford Edge. Prior to this meeting and under previous CEOs, no one would ever admit to anything going wrong within their business or function. At the next meeting, when Fields showed up, the other executives were stunned (p. 125):
“The truth was that many of the other executives were surprised to see him at the meeting. They assumed he had been taken out back and summarily executed when no one was looking. Some expected the ax to fall during this week’s session. But when that meeting ended with Fields still in charge of the Americas, most of his peers had reached the same conclusion he had: Mulally was true to his word. He said he wanted honesty and he meant it. It was not a trap.”

One of the most important ingredients for having a speak-up culture, and effective teams, is to build psychological safety, where employees feel safe in offering ideas and are not afraid of taking risks. Many executives I have interviewed believe that encouraging employees to speak up is vital to creating a healthy organizational culture. As reported in the New York Times (Duhigg, 2016), Google embarked on a study in 2012 to understand what makes great teams. Their researchers reviewed academic studies and groups within Google – over 180 teams in all. What did they find? First, the composition of the team (in terms of skill mix, personality type or level of experience, for example) did not seem to matter for team effectiveness. They concluded that understanding and influencing group norms were the keys to success, and that the most important of these norms were around creating a climate of psychological safety. There were other important behaviors critical to team effectiveness, such as having clear goals and “creating a culture of dependability.” But psychological safety norms trumped everything else. The Google researchers pointed in particular to a study by Williams et al. (2010) that found two behaviors indicative of psychological safety: conversational turn-taking and average social sensitivity.

It is somewhat ironic that Google is currently grappling with this issue in its firing of one of its engineers for expressing his point of view. However, psychological safety does not necessarily mean that individuals can express any opinion, regardless of its content and its potential impact on other members of the team. To take an extreme example, a worker who advocates at a meeting to do something illegal, immoral or unethical (such as maiming another employee or bribing a government official), or that goes against the company’s core values and code of conduct, should be held accountable and face consequences. A team member who disparages and insults other team members should be confronted. The leader’s responsibility is not only to encourage and role-model behaviors that are conducive to psychological safety but also to make clear what the boundaries are. As most of us know, a firm is not a democracy, and rules around freedom of speech are more restricted in most companies.

In her now classic article, Edmondson (1999) points out that psychological safety is not the same as team cohesiveness since members of cohesive teams might be hesitant to disagree with others for fear of rocking the boat. Although cohesion is different from safety, there might be a contagion effect among cohesive groups, where all members feel they belong to the same in-group. Research by Gino et al. (2009) suggest that the behavior of one or more in-group members has a strong influence on other in-group members; these “microelements” might even be stronger than “macroelements” such as organizational policies. As Edmondson explains: “The term (psychological safety) is meant to suggest neither a careless sense of permissiveness, nor an unrelentingly positive affect but, rather, a sense of confidence that the team will not embarrass, reject, or punish someone for speaking up. This confidence stems from mutual respect and trust among team members.” (p. 354) She has developed a scale to measure psychological safety; sample statements include the following: "If you make a mistake on this team, it is often held against you" (reverse scored), "It is safe to take a risk on this team," and "No one on this team would deliberately act in a way that would undermine my efforts."

In a recent review, Edmondson and Lei (2010) state that “…across decades and levels of analysis … (psychological safety) facilitates the willing contribution of ideas and actions to a shared enterprise.” (p. 24) In other words, “People are more likely to offer ideas, admit mistakes, ask for help, or provide feedback if they believe it is safe to do so.” (p. 36) They are also more likely to speak up at work. The evidence of its positive impact seems strong, although Edmondson and others do acknowledge that the impact of psychological safety may vary with contextual factors, such as the degree of teamwork required or the size of the group. Effective team leader coaching and context support (such as access to information and resources) are two other factors that might impact psychological safety.

Does psychological safety have a downside? As Edmondson and others have suggested, there are certain conditions in which creating psychological safety might not be as important or as relevant. In highly constrained teams (e.g., when the work is very routine, where performance measures are very specific), safety might not have as much of an impact since the task is well structured and the processes are explicit.

Another of these conditions might be the level of belief about hierarchy or power distance. In an interesting set of studies, Anicich et al. (2015) analyzed data from over 30,000 Himalayan mountain climbers from 56 countries on over 5,000 expeditions between 1905 and 2012. They created an overall index of hierarchy for each expedition based on its country of origin and controlled for such variables as climber age, number of climbers, country GDP per capita and mean elevation of the expedition’s native country. They predicted that climbing teams from more hierarchical cultures would be more successful, that is, more likely to summit. On the other hand, because hierarchical cultures are less likely to encourage others to have a voice, and since member perspectives are important to avoid any disasters, they predicted that teams from such cultures would also be more likely to suffer fatalities. Their analysis confirmed their predictions: expeditions from high power distance cultures were more successful in reaching the summit, but they also had more climbers die while climbing.

And then, some would argue, there is the reality that in many organizations, you can never let your hair down completely. Many individuals, particularly bosses, are living in fishbowls where their behaviors are continuously being observed. Sutton (2010), for example, writes that he has seen three reactions by bosses to failure by subordinates: 1) remember, blame, humiliate or expel the culprit, 2) forgive and forget, and 3) forgive and remember (the most effective of the three, according to him). In one organization, I asked several executives what would happen if a manager failed in an assignment. Their response was uniformly similar, indicating that there were very clear messages on the consequences of failure. You had two chances, they all said (of course, depending on the magnitude of the assignment or failure). If you failed the second time, your career would be over. In another organization, senior executives were puzzled as to why many candidates were turning down opportunities to accept overseas assignments in several emerging markets. As it turned out, many of these assignments were very high-risk, and the company had a reputation of not tolerating failure.

As a manager, you can create your own mini-climate of psychological safety by considering these two recommendations. First, examine your own behavior and style and make the appropriate adjustments, especially in building your empathy and social awareness. Here are some questions to reflect on. What is your reaction to those who disagree with you? When subordinates make mistakes, is your first instinct to blame and berate, rather than understand and listen? Do you ask “information-seeking” questions before stating your opinion? Do you welcome disagreements from your team? Do you make sure that everyone gets a chance to have a voice in the team? Second, remember that psychological safety cannot be established unless there is trust. Learn how to build trust, keeping in mind two different approaches to building trust across cultures. In many Western cultures, trust is built through the task (showing that you are competent, reliable, that you keep your word, and that you are consistent in your words and actions). In other cultures, trust is built through building interpersonal ties and relationships. Both can be effective, and learning when to use one or the other, or in what sequence or combination, will help you create your own mini-climate of safety with your team.

Duhigg, C. (February 25, 2016). What Google Learned from Its Quest to Build the Perfect Team. https://www.nytimes.com/2016/02/28/magazine/what-google-learned-from-its-quest-to-build-the-perfect-team.html?smid=pl-share
Edmondson, A. (1999). Psychological Safety and Learning Behavior in Work Teams. Administrative Science Quarterly, 44 (2) (June 1999): 350-383.
Edmondson, A. and Lee, Z. (2014). Psychological Safety: The History, Renaissance, and Future of an Interpersonal Construct. In The Annual Review of Organizational Psychology and Organizational Behavior: http://www.annualreviews.org/doi/10.1146/annurev-orgpsych-031413-091305

Gino, F. et al. (2009). Contagion and Differentiation in Unethical Behavior: The Effect of One Bad Apple on the Barrel. Psychological Science, 20 (3): 393-398.

Hoffman, B. (2012). American Icon: Alan Mulally and the Fight to Save Ford Motor Company. New York: Crown Business.

Sutton, R. (2010). Good Boss, Bad Boss. New York: Business Plus.

Williams, A. et al. (2010). Evidence for a Collective Intelligence Factor in the Performance of Human Groups. Science, 29 (330): 686-688.


Tuesday, August 1, 2017

Management Lessons from "The Fix"

In his recent book “The Fix: How Nations Survive and Thrive in a World of Decline,” Foreign Affairs editor Jonathan Teppermann lays out ten seemingly intractable problems that the world faces today, such as inequality, poverty, immigration, and Islamic extremism. and then proceeds to detail solutions that some countries and cities have implemented to address these problems. It’s a hopeful book, and shows the importance of such drivers as determination, drive, out-of-the-box thinking, luck, and the power of human spirit and cooperation.

While many large corporations today have continued to enjoy success, there is no executive I have spoken to in the past few years who can deny the many challenges that his or her corporation faces - geopolitical issues, pressures from activist shareholders, ethical scandals, engaging employees, disruptive innovations, changing consumer demands, technological shifts, cyber security, and competitive challenges, to name just a few.

These corporate challenges may not rise to the level of the problems that Tepperman has laid out in his book, but they are nonetheless daunting for most executives. I believe that there are lessons in his book that might be relevant for organizations. Tepperman suggests the following five general lessons for nations; I’ve provided brief explanations for these (since his titles alone are not self-explanatory), and some take-aways for organizations.
1.     The power of promiscuous thinking. From his success stories, Tepperman concludes that nations and their leaders should not hesitate to be pragmatic and to apply good ideas: “… when the stakes were greatest, they refused to let their principles or loyalties get in the way of their search for solutions.” Tepperman does not suggest doing anything unethical or illegal, or what might go against a nation’s core values. Rather, my take-away here is that organizations need to employ “outside-in” thinking, and do their best to eliminate the Not-Invented-Here syndrome.
2.     Embrace extremity. In other words, view a crisis as an opportunity to become unshackled from the past: “…leaders … all saw that their crises gave them a once-in-a-generation chance to turn adversity into advantage and rewrite the rules …”. In his classic Good to Great, author Jim Collins identified successful leaders who were willing to confront the hard facts about their situation. As another example, Andy Grove, when he was leading Intel, decided to walk away from the memory chip business when it became clear that, profitable as this business was, it had no long-term future.
3.     Please all the people – some of the time. Tepperman argues that while many of the successful leaders in his book did compromise on their solutions, they also made sure that no group felt disenfranchised or alienated by their decisions because no one got everything. There were no outright winners and losers. This lesson might not be as relevant for organizations, but one take-away for me is what I have observed when company leaders decide to sell off or shut down parts of their business (as when companies like P&G and GE have done). By explaining their decisions clearly, engaging their teams, and treating employees with respect and fairness, leaders an mitigate the risks to morale and productivity.
4.     Govern with guardrails. For nations, this means having checks and balances as well as creating conditions to minimize unacceptable behaviors, such as corruption. This seems to me like the efforts many governments are establishing to “nudge” their citizens. In their classic work, Thaler and Sunstein (2008) describe choice architecture and how nudges can help. Starting in the UK with the creation of a Behavioral Insights Team in 2010, nudge strategies have been formally implemented in over 50 countries. As reported in The Economist (May 20, 2017), when the UK established its own nudge unit with the help of Richard Thaler, the government made it clear that unless the unit saved at least ten times its running cost (about 500,000 pounds a year), it would be shut down after two years. It saved about 20 times its running cost, and the unit is still operating. Managers in organizations can help make sure that they have policies and practices that make judicious use of nudges, in addition to applying both positive and negative incentives.
5.     Make revolution through evolution. In other words, don’t take short cuts when making changes; make sure you do the hard work necessary and get involved. When Jack Welch and John Reid (former CEO of Citibank) decided to implement Six Sigma as an initiative in their respective organizations, for example, they themselves went through black belt training and taught classes to managers and supervisors.

In addition to the five lessons above, I suggest that there are five other management lessons from his book that could be added to this list.

First, having the right leader is critical. Tepperman describes how in Rwanda, which had gone through a period of genocide when the Hutu majority tried to exterminate the Tutsi minority, President Kagame emerged to unify the country and get rid of ethnic discrimination. For example, government ID cards and other official documents removed all references to tribal affiliations. He and the government also invested heavily in economic reconstruction and institution building. In my experience, leadership matters not only at the C-suite level, but at every level of the organization.

Second, innovations might not always work immediately, or might be counter-intuitive. In Brazil, former president Lula introduced a program called Bolsa Familia (or Family Grant) to address the severe inequality and poverty problems that the country faced. Families that qualified (those who lived in extreme poverty as well as moderately poor families) received a hand-out from the government, and they could do what they wanted with the money. There were a few other conditions: children between six and fifteen years old had to attend school at least 85 percent of the time; children under seven had to get immunized; and all children had to get regular medical check-ups. There was strong pushback at the beginning, from conservatives to progressives, as well as from economists and government officials. Eventually, the program became a success, reducing inequality and even giving a boost to the economy. Take one among many corporate examples. While companies like IBM and HP have been struggling with their PC business, Microsoft has invested in innovations with its various Surface devices. Although not yet hugely profitable, these devices have been earning well-deserved recognition and are now considered competitive with some of Apple’s Mac devices.    

Third, get people involved and engaged. In Botswana, one of Africa’s success stories, its first president Seretse Khama used a practice called kgotla. This is how Tepperman describes this practice:
“In precolonial times, the Tswana used kgotla to work out personal disputes, make financial decisions, and answer other administrative questions. Whenever a kgosi (king or chief) needed to resolve such a matter, he’d convene his tribe in a designated enclosure surrounded by fence posts topped with rhino or cattle skulls. There the Batswana would hash out business. And they would use the meetings to hold their rulers to account, questioning and challenging the kgosi’s decisions.” (p. 123)

President Khama applied this principle in his government. For example, before implementing a policy, the proposal would first “… be circulated to all ministers and their top civil servants. It would also be discussed in Parliament’s all-party caucus and at kgotla meetings held throughout the country. Only after consensus had been achieved would cabinet vote on a measure. And only then would be government act on it.” (p 130) With any major transformational change in an organization, engaging the leaders as well as the troops is critical to long-term success. Lou Gerstner learned this lesson well in his turn-around of IBM in the eighties.

Fourth, emphasize on what can unite rather than on what will divide. One of his examples is Singapore, where its former leader Lee Kuan Yew focused on good governance and getting rid of bribery, graft and corruption as a competitive advantage of this nation-state to attract foreign investment. A few years ago, I worked with an executive who had just taken over a division. What he found were department heads constantly bickering and blaming each other for problems with the business. One of the first actions that Rick (not his real name) took was to have an off-site, where he brought in competitors’ products and commercials to show the external threats that the division faced. He pointed out that the enemy was not each other, but these competitors and that only by working together could they hope to defeat the competition.

Fifth, make sure you have the right team in place. It was fascinating to read Tepperman’s description of how former Mayor Michael Bloomberg created an antiterrorism strategy in New York City following 9/11, despite receiving little cooperation from the FBI or funds from the federal government. But the key to his success was “…his ability to surround himself with brilliant, unconventional thinkers and doers. The mayor consistently hired the best people he could find for any given job, and he rarely worried about whether or not they possessed conventional credentials.” Furthermore, he continues, Bloomberg avoided the problems faced by other government officials: bad management, excessive bureaucracy, and risk aversion. He did this “by giving his lieutenants an uncommon amount of freedom, encouraging them to think big – and then standing by them if and when they failed big.”

Professor Richard Hackman and his colleagues have done extensive research on the effectiveness of senior leadership teams (Wageman et al., 2008) and found that only about a third of senior teams are effective. They concluded that having the right team in place is one of the essential conditions for an effective leadership team. This means ensuring that the team consists of individuals who have the knowledge, skill, and experience required for the team’s work. Beyond technical skills and experience, they argue for selecting team members who have strong conceptual thinking ability, as well as empathy and integrity.

Many of these principles or lessons are not new; they have been discussed by management gurus such as Peter Drucker and Marshall Goldsmith as well as highly-respected and successful business and military leaders. The parallels to governing nations and Tepperman’s examples is further evidence of their broad applicability.

Collins, J. (2001). Good to Great: Why Some Companies Make the Leap and Others Don’t. New York: HarperBusiness.

Tepperman, J. (2016). The Fix: How Nations Survive and Thrive in a World in Decline. New York: Tim Duggan Books.

Thaler, R. and Sunstein, C. (2008). Nudge: Improving Decisions about Health, Wealth, and Happiness. New Haven, CT: Yale University Press.


Wageman, R. et al. (2008). Senior Leadership Teams: What It Takes to Make Them Great. Boston: Harvard Business School Press.