Psychological Safety In Banking
PSYCHOLOGICAL SAFETY IN BANKING
Organisational psychologists Abigail Freeman and Nicole Brigandi explain ‘psychological safety’ and why it matters.
How do you build the best team? When Google asked this question in 2012, it shed new light on the importance of psychological safety.
“In a study of 180 teams, Google found the best performing were those where colleagues were able to share ideas, speak out and ask questions without being ridiculed or punished,” explains organisational psychologist and leadership coach Nicole Brigandi.
“Unwritten rules and behavioural norms like these were fundamental in shaping the culture of a team. And this culture had more of a bearing on the team’s performance than other factors, such as personality, engagement or individual performance.”
This is the essence of psychological safety, and its rise to prominence as a leading predictor of high-performing, healthy teams and organisations.
“It’s a concept that has been around since the 1960s, but has become mainstream alongside an increasing focus on corporate culture,” says Abigail Freeman, an organisational psychologist and founder of organisational consultancy Brink.
“For example, an update to the UK’s Corporate Governance Code earlier this year highlights the importance of a healthy culture in delivering long-term, sustainable performance and trust in business.
“The Financial Conduct Authority views culture as a widely accepted root cause of some of the major complex failings and breaches of conduct in financial services over the past few years. And the Banking Standards Board is also focused on building the trustworthiness of banks and building societies.”
Invisible but clear
Like oxygen, psychological safety is invisible – but when it’s not present in an organisation, you tend to hear about it.
For example, the vehicle emissions scandal that claimed Volkswagen chief executive Martin Winterkorn was said to stem from a culture of fear and intimidation.
“Fear-driven cultures can achieve great results – but it can unravel very quickly,” Brigandi says. “However, the fallout can also impact beyond the organisation itself – and affect the industry as a whole.”
Freeman shares the story of former $9bn Silicon Valley darling Theranos, a lab testing start-up, whose disgraced founders were indicted last year for defrauding investors out of hundreds of millions of dollars, as well as deceiving hundreds of patients and doctors.
“They found the biggest problem of all was there was a dysfunctional corporate culture, so any employee that challenged what was happening with the lies and hype was either marginalised or fired,” Freeman says. “Meanwhile, sycophants were promoted.
“The point here again is that it’s dangerous if leaders surround themselves with yes people and focus on looking good publicly – rather than inviting healthy conflict and creating the conditions for anyone from across the organisation to challenge leadership when they question its conduct.”
Read more about psychological safety – and how to build it in your organisation – in the latest issue of Chartered Banker magazine.