These are incredibly challenging times for leaders.

40% of CEOs fail in their first 18 months!*

However, the top CEOs’ companies generate 2.8x more returns for their shareholders than their peers.

One of the mindsets separating these top CEOs from all the others is they treat people and culture as a top priority. The top CEOs and leaders address the psychology of the team first, focusing less on what the team does together and more on HOW they work together.

Specifically, they recognize that psychological safety is the foundation for successful teams and thriving organizations.

What is psychological safety?

It’s the belief that you won’t be punished or humiliated for speaking up with ideas, questions, concerns or mistakes, according to Dr. Amy Edmonson, a Harvard Business School professor who has researched psychological safety for over 30 years. When people feel psychologically safe, they’re able to fully collaborate, leverage collective talents, and drive innovation.

Why does it matter?

Teams are how things get done in organizations.

Recent findings by McKinsey underline the significant impact of team dynamics on the execution of strategies. Challenges with people and culture account for 72% of the barriers to success. Addressing these not only doubles the likelihood of successful strategy implementation but also cultivates a resilient and adaptable workforce.

In our modern workplaces, collaboration has increased by 50% compared to two decades ago. Without a psychologically safe environment, employees are more likely to engage in self-preservation rather than focusing on collective goals. This defensiveness stifles learning, innovation, and efficiency—key ingredients for success in any business.

The cost of silence in an organization is high. Often, individuals refrain from speaking up not because they lack insight, but because they fear the repercussions of disrupting the status quo.

Psychological safety is fundamental to fostering a culture of open communication and innovation. In today’s fast-evolving business environment, where cross-functional teams must rapidly form and perform, creating conditions where employees can freely express themselves or voice concern is critical.

If you want the stats, according to Google’s Project Aristotle, psychological safety contributes 43% to team effectiveness. Without it, you are leaving performance on the table.

Why now?

The “post-pandemic era” has further eroded trust and psychological safety in many workplaces as we’ve had to adapt to new ways of working together. But savvy leaders see this as an opportunity to reset cultures by prioritizing psychological safety.

Thus, your mission, should you choose to accept it, is creating the conditions for psychological safety in your teams and organization. In today’s competitive environment, can you afford not to prioritize people and culture?

Guest blog by:

Stephanie Fleming

President, Viri Group

This article is based on the following research:

• *CEO Excellence: The Six Mindsets that Distinguish the Best Leaders from the Rest by the McKinsey partners Carolyn Dewar, Scott Kellar, and Vikram Malhotra
• The Fearless Organization by Amy C. Edmondson
• Project Aristotle, research by Google
• Losing from Day One. Why even successful transformations fall short, McKinsey & Company December 2021

I hope you found this useful. Gary