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How lack of trust and poor psychological safety in leadership teams can derail performance

You are about to enter a leadership meeting with a sinking feeling in your stomach. Maybe you are dreading an emotionally exhausting discussion or are just fed up with the lack of collaboration and alignment.

Blaming, subtle undermining, power plays… a climate of distrust and lack of psychological safety in leadership teams is surprisingly common. The People + Science Boardroom Psychological Safety Benchmark 2020 -2021 (Australia) found that only 4 out of 10 top leaders feel psychologically safe and just 3 out of 10 report high levels of trust with fellow decision-makers[1].

The results of our own LinkedIn trust poll in March 2023 show that just over a third of respondents (35%) trust other teams in their organisation and only 32% believe that leadership decisions are fair and transparent.

What happens when leadership teams have weak psychological safety

The impact of psychological safety in leadership teams on organisational performance is considerable. The People + Science study has shown it is a lead indicator and precursor of quality decision-making at leadership level. Boards that work effectively as teams have 800% greater impact on profitability than any one well-qualified board director[1].

In this article, we explore what happens when leaders lack trust in each other or in the most senior person in the team, and we share some techniques for building trust and psychological safety in leadership teams.

What is psychological safety and how does it relate to trust?

Psychological safety in leadership refers to a team climate characterised by interpersonal trust and mutual respect in which people are comfortable being themselves[2]. When people feel that they can speak up, share ideas, and ask questions openly, they are better able to deal with conflict and they collaborate more effectively.

Research identifies several elements of trust that are critical for positive interpersonal relationships and effective collaboration in organisations[3]:

Rational Trust

Competence – do others see me as competent and knowledgeable?

Predictability – do others see me as consistent, dependable, and reliable?

Emotional Trust

Benevolence – do others see me as kind, empathetic, and discreet?

Integrity – do others see me as acting in accordance with acceptable values and ethics, including honesty and fair treatment?

What happens when trust and psychological safety in leadership teams are missing

Leaders withdraw

When leaders are worried about getting blamed for problems or being treated unfairly if they voice a concern, they may not raise issues or admit mistakes. This often leads to avoidance of contentious topics or uncomfortable discussions. Directors retreat to their areas of expertise, valuable contributions become inhibited, issues are concealed or ignored, and groupthink reigns supreme[4].

The impact of this can be devastating. Patisserie Valerie – a UK listed company – collapsed in 2019, following a £40m financial statement fraud perpetrated by a supplier with the collusion of five finance staff members. For these staff members, it was “easier to fiddle the numbers than admit to bad results [to the executive chairman, Luke Johnston].”[5] Luke Johnston undermined psychological safety in his company and lost £225 million of his personal wealth as a result[6].

The profoundly impactful decisions made at the most senior levels require candour and taking interpersonal risks, which can only happen in a psychologically safe environment.

Lack of focus on enterprise goals

Most of an organisation’s competitive value is created when functions come together as capabilities (e.g., marketing, consumer analytics, and R&D, together developing innovation capability)[7]. When top leadership teams act primarily as a collective of individuals focussed on achieving individual goals, it prevents them from collaborating effectively to achieve shared goals and delivering that value. When leaders don’t consistently act in each other’s best interest, information doesn’t get shared, and problems don’t get solved[4].

At the National Institute of Health (NIH), competition between different departments meant that it was taking too long to bring effective medicines to the public. Patients were dying as the various teams worked in silos to try to be first to the finish line. The NIH formed a new organisation, AMP (Accelerating Medicine Partnership), to tackle silos, share expertise and information, and facilitate collaboration across teams as well as with external partners. This led to dramatic advances for the NIH, beyond the scope of any competitor[8].

Drop in innovation and flexibility

There is significant evidence that a climate of psychological safety and trust is key to being able to innovate and adapt[9]. Barbara Fredrickson at the University of North Carolina has found that positive emotions like trust and confidence help us become more open-minded and resilient, increasing solution-finding and divergent thinking – the cognitive processes underlying creativity[10], [11]. Leaders who see each other as competent, dependable, ethical, and focussed on shared goals, are more likely to come up with new ideas and respond quickly to changes.

Google – arguably one of the most innovative companies of our time – identified psychological safety as the first of five essential ingredients of high-performing teams. In their research, they found sales teams with the highest levels of psychological safety outperformed their goal by an average of 17%, while those with the lowest levels of psychological safety missed their goals by an average of 19%[12].

How can leaders build greater trust and psychological safety at the top?

Building psychological safety among leadership teams is vital and there are a range of ways to achieve this.

1. Evaluate the current climate in the leadership team

High psychological safety unlocks diversity of thought as everyone is comfortable sharing their thoughts, ideas and opinions. You can evaluate the level of psychological safety in a leadership team by reflecting on and rating the questions below on a scale of 1 to 5 (5 being highest):

Contributions

How often does everyone contribute equally in team discussions regardless of location, experience, seniority?

Challenge

How often do people disagree with or challenge your ideas?

Mistakes

How often do people openly discuss mistakes and problems when they happen?

Collaboration

How often do leaders ask each other for help and support?

Then, to understand the levels of trust within the team, create a relationship map. This can be done by asking each leader to complete a survey evaluating different aspects of the relationships they have with their fellow leaders, focussing on competence, benevolence, predictability, and integrity. Identifying clusters of high and low trust and understanding the underlying reasons can help focus on where to strengthen trust in the team.

Measure your team's psychological safety with Collective Advantage

Our unique psychometric assessment gives you the most insight on psychological safety by objectively measuring how teams and organisations think, collaborate, and solve problems together.

Learn more

2. Encourage accountability, not blame

Amy Edmondson, Professor of Leadership at Harvard Business School, describes a continuum of activities that portray reasons for failures and negative outcomes, spanning preventable, complexity-related and intelligent[13].​

Reasons for Negative Outcomes / Failures
Preventable

Deviance

Inattention

Lack of
Skills

Process
Inadequacy

Complexity Related

Task
Challenge

Process
Complexity

Uncertainty

Intelligent

Hypothesis
Testing

Exploratory
Testing

Some avoidable errors are more “blameworthy”, such as those due to deviance, whilst ‘intelligent’ failures, such as exploratory testing, are more “praiseworthy”.

To increase innovation, it is important to create environments where it is safe not to get things 100% right the first time so that people can explore, learn, and test things out. Role model the language and behaviours you want to foster by reframing problems or challenges as an opportunity to grow: “What can we learn? How can we improve?”

3. Build trust through words and actions

Action: Create robust communication channels within the leadership team

Steps:

Create a simple communication charter outlining agreed ways of communicating in meetings, such as:

  • Everyone contributes.
  • No cutting over people.
  • Build on ideas instead of criticising.
  • Offer a constructive way forward.
Action: Make time to develop or strengthen social connections

Steps:

  • Talk about life outside of work, e.g. spend time discussing people’s evenings or weekends, a favourite programme, or a book recommendation. It is important to consider that some people may prefer to keep this more private, however.
  • Acknowledge different pressures, whether additional family responsibilities, financial or other issues. Sharing these can create opportunities to build connections and support each other.

Why psychological safety is leadership teams is essential

Psychological safety and trust amongst senior leaders is critical for running an innovative, agile, and profitable organisation, enabling them to share ideas freely, raise tough issues, collaborate better, and create competitive value. Such an environment requires effort to build and maintain but can ultimately help people and ideas thrive.

Measure your team's psychological safety with Collective Advantage

Our unique psychometric assessment gives you the most insight on psychological safety by objectively measuring how teams and organisations think, collaborate, and solve problems together.

Learn more

References:

[1] Grant, C. (2021). Board Briefing: Boardroom Psychological Safety Impacts Decision Making. Women on Boards, here.

[2] Edmondson, A. C. (1999). Psychological Safety and Learning Behavior in Work Teams. Administrative Science Quarterly, 44(2), 350-383.

[3] Dietz, G. & Den Hartog, D. N. (2006). Measuring Trust Inside Organisations. Personnel review, 35(5), 557-588, here.

[4] Dempsey, S. (2021). Dealing with Toxic Behaviour in the Boardroom. Australia Institute of Company Directors, here.

[5] Marriage, M. & Beioley, K. (2019). Patisserie Valerie Report Talks of Fake Invoices and Ledgers. Financial Times, here.

[6] Brennan, N. M. (2022). Is a Board of Directors a Team? Irish Journal of Management, 44(4), 5-19, here.

[7] Carucci, R. Velasquez, L. (2022). When Leaders Struggle with Collaboration. Harvard Business Review, here.

[8] Conner, C. (2014). Why Most Collaborations Still Fail (And 5 Ideas for Turning the Equation Around). Forbes, here.

[9] Edmondson, A.C. (2018). The Fearless Organization: Creating Psychological Safety in the Workplace for Learning, Innovation, and Growth, first edition, Hoboken, NJ: John Wiley & Sons.

[10] Delizonna, L. (2017). High-Performing Teams Need Psychological Safety: Here’s How to Create It. Harvard Business Review, here.

[11] Positive Emotions and Psychophysiology Laboratory. University of North Carolina Chapel Hill, here.

[12] Rosovsky, J. (2015). The Five Keys to a Successful Google Team. Re-Work with Google, here.

[13] Edmonson, A. C. (2011). Strategies for Learning from Failure. Harvard Business Review, here.​