0:00:10.4 Junior: The quality of interaction regulates the speed of discovery. Welcome back everyone, to The Leader Factor. I'm Junior here with my co-host, Dr. Tim Clark, and today we're gonna be talking about what non-HR executives need to know about psychological safety. So, Tim, that first line, that's one of yours, tell me about that line.

0:00:27.7 Tim: Yes. Does quality of interaction regulates the speed of discovery? That's actually a research finding Junior. And you gotta think about that to really have it register, the quality... So think about a team, think about a department, think about the entire organization. The quality of interaction regulates the speed of discovery. So think about innovation. So that is the valve that turns that on or turns it off. That's the regulator, that's the governor.

0:01:00.3 Junior: And in my opinion, as we were going through this episode and preparing what do non-HR execs need to know about psychological safety, if we could reduce it all the way down to a single sentence, I think that that's the single sentence.

0:01:13.4 Tim: Yeah.

0:01:15.2 Junior: Non-HR executives aren't going to have time and maybe interest to dive deep into the weeds of the research like we've had the opportunity to do. And like many of the people we speak with every day have the opportunity to do. And so we wanted to dedicate some time in an episode to really get into the SparkNotes.

0:01:33.3 Tim: Yeah.

0:01:33.7 Junior: The summary findings. What is it that you need to be concerned about if your goal is to have a high performing team, a high performing organization that consistently executes and predictably innovates. If you want that, then this is the episode for you. It's not gonna take us very long to do it either. As we were discussing in preparation, you mentioned a slide that's been in a few decks we've put out, about some of the outcomes related to psychological safety. So that's where we thought we would start today. So let's go to the slides and take a look at this one. Psychological safety is core business. Walk us through this one.

0:02:09.5 Tim: Well, Junior, before we jump into this slide, I just want to set a little bit more context for all of the non-HR executives. And that is we're really talking about culture. And we're talking about the importance of culture, and we're talking about culture as an independent variable that has a huge influence on a number of critical outcomes over the years. I just wanna rehearse this a little bit. Over the years, I've heard executives say, I have a business to run. I don't have time to worry about culture. What an ironic statement. What that says to me, that's a reflection of their immaturity in understanding how organizations work. So if those words come out of your mouth, I know where you are, and I know that you don't understand how organizations work yet. Because culture is everything. It's in and around everything. It influences everything. And you are a chief cultural architect. So if those words spill out of your mouth, then that's reflecting your, you still don't understand how profoundly important culture is in shaping outcomes.

0:03:34.2 Junior: So help us understand how does it shape outcomes?

0:03:38.6 Tim: Well, for example, psychological safety is a type of culture, and we're gonna define that more specifically. But psychological safety becomes an independent variable that's directly tied to 10 critical outcomes. And over the last five years, we've had building evidence, empirical evidence that shows the direct tie between psychological safety and these 10 outcomes. Should we talk about these a little bit?

0:04:04.7 Junior: Let's do, I'll take the first five. You take the back Five.

0:04:07.2 Tim: Okay.

0:04:08.0 Junior: First one, customer experience. We're not gonna get into the weeds on these, but you can see the quality of interaction is dictated by the level of psychological safety in the environment. EX equals CX. If you have low psychological safety, that will bleed through all the way to the customer interface.

0:04:26.2 Tim: That's right.

0:04:26.8 Junior: Inclusion. We'll talk a little bit about stage one. That's the first level that we need to reach in the four stages of psychological safety, If you're familiar with that. Mental health and wellness, that's obvious. Engagement. Engagement. We did an episode on this a little while ago and talked about engagement as a downstream outcome as a consequence of the inputs relative to psychological safety. If we have low psychological safety, we're gonna have low engagement as an outcome. Engagement is not an input, it's an outcome. And we have physical safety, If you don't feel safe to challenge the status quo, raise your hand. Voice a concern. Ask a question. Do you think that physical safety will be at more or less risk? Certainly more.

0:05:11.0 Tim: Yeah.

0:05:12.7 Junior: And we see that in the literature. We see that in the research, and we've seen it in our own interaction with our clients.

0:05:16.6 Tim: So junior, that one's near and dear to my heart.

0:05:18.9 Junior: Yeah.

0:05:19.7 Tim: Because of my time in manufacturing. So I want to say a little bit more about that.

0:05:25.1 Junior: Please.

0:05:26.5 Tim: In physical safety, what happens is the entire safety system reaches diminishing returns unless the employees feel safe to identify dangers, risks, and hazards, they have to be able to identify those and bring those up and speak out about those things. If they don't feel a threshold level of psychological safety to mention those things, those three things, dangers, risks, and hazards, then you hit the wall and you do not continue to improve your safety environment. That's how there's the crucial link right there. Gotta be able to do it.

0:06:11.1 Junior: Yeah. So take us through the last five.

0:06:12.9 Tim: Last five. Resilience. Resilience is the ability to continue your efforts in the face of adversity. So you have to have some endurance capacity. Resilience is part of the journey in any organization. So that is factor number six. Factor number seven is learning agility. And we define learning agility as the ability to learn at or above the speed of change. Now, it's one thing if you can do it by yourself.

0:06:47.0 Junior: Yeah.

0:06:47.4 Tim: We're not talking about that. We're talking about the team doing it. So it goes back to the premise. The quality of interaction regulates the speed of discovery. That means that we are learning together. It's a collaborative exercise, and it produces, so we are able to exhibit learning agility. Next one is retention. Psychological safety has a direct impact on retention. If the psychological safety is low, you're going to see some initial signs where some of your best performers are leaving. So you're gonna bleed out your top talent, you're gonna have an attrition problem, and you're not going to be able to compensate for that problem with any other solution. There's no solution that can be a replacement for the psychological safety that you lack. So it's directly tied to retention. The next factor is productivity, direct impact on productivity. That's the way we execute every day as we interact, as we get things done. And then the last one is innovation. And I think that we see the direct tie to that. The quality of interaction regulates the speed of discovery. What is innovation? It's all about doing things better, whether it's a marginal gain or it's some kind of big breakthrough.

0:08:17.7 Junior: Yeah. And this one's so important for many people listening, this could be the most important one. Innovation by definition is a deviation from the status quo.

0:08:27.1 Tim: Yeah.

0:08:28.2 Junior: And if we quell any deviation from the status quo, we'll likely get less innovation over time. And that becomes a cultural norm. So if we squash that, we're gonna be swimming upstream.

0:08:42.3 Tim: Yes.

0:08:42.8 Junior: Okay. So I'm gonna go ahead and just list these 10 really quickly. I want every listener out there to key in on the one that's most important to you. So as I go through this list, think about your business. Think about your team. Think about your environment, what's important to you, customer experience, inclusion, mental health and wellness, engagement, physical safety, resilience, learning agility, retention, productivity, innovation. So think to yourself, which of those 10 is most important to me? And our commitment to you listening is that by the end of this episode, you will have some meat and potatoes, some next steps, things that you can do to affect whatever of those 10 outcomes is most important to you. So let's get into what is psychological safety? Very simple. A culture of rewarded vulnerability. Take us through that definition.

0:09:30.5 Tim: Junior what that means is, if you think about the nature of human interaction is such that we engage in acts of vulnerability with each other. Human interaction is a vulnerable activity by definition. So when that vulnerable activity happens, then what? There's always a choice for someone to... Well, we have to respond. And the choice is, will I punish or will I reward that vulnerable activity? That act of vulnerability, everything turns on the response to vulnerability. Psychological safety means that consistently we reward acts of vulnerability.

0:10:17.4 Junior: We say that human interaction is a vulnerable activity. And some people may hear the word vulnerability and think, wow, soft. I don't think that that has anything to do with my day-to-day. But vulnerability is exposure to potential harm or loss. Now that could be true across a variety of variables. It could be political risk, social risk, physical risk. It could be the risk of your very job.

0:10:44.5 Tim: Yeah.

0:10:45.8 Junior: So people are constantly scanning the environment and doing threat detection and trying to figure out, is this a safe place for me to ask a question? I see that danger on the shop floor. Is that something that I should point out? Or is that something I should keep to myself? So on and so forth. I have an idea. Should I share it? Should I not? As a leader, you hold the levers most of the time for whether or not that vulnerable act is punished or rewarded. I really like this slide here. It's impossible to avoid the risk of interaction. If you are human, there will be risk in your interactions daily. And you can look back just on the last 48 hours, let's say.

0:11:23.6 Tim: Yeah.

0:11:24.7 Junior: Point to one instance where you felt a little twinge of vulnerability. Was it a question you thought about asking, you were gonna raise your hand? Is it a concern that you were gonna voice but didn't? Is it somebody who attacked you personally? There are a variety of ways that that vulnerability shows up every day. And depending on whether or not that's rewarded, determines the health of the culture.

0:11:49.9 Tim: Well, Junior, I think there are two points behind this statement. Just just to illustrate how fundamental it is. Let me restate it. It's impossible to avoid the risk of interaction. So two questions. Can you do your job without engaging in acts of vulnerability, without avoiding the risk of interaction? Can you do your job day in and day out, number one. Number two, can you be human and avoid the risk of interaction? I think clearly the answer to those two questions is, no, you cannot do your job, nor can you be human if you try to avoid the risk of interaction. Not possible.

0:12:37.0 Junior: Can't be a happy one. Can't be a productive one.

0:12:38.9 Tim: No. You could be a recluse. You can be on your own. But that's about it.

0:12:43.6 Junior: That's about it. And even then, are you really?

0:12:48.2 Tim: Right.

0:12:48.5 Junior: Okay. Let's move on to the next piece here. There are two arguments that we're going to put forward for why psychological safety is so important. There's a practical argument and there's a moral argument. And we're gonna go to the moral argument first. The moral argument hinges on this statement. Human beings have inherent value. This is a question that we need to ask ourselves as leaders. Do you, do I as a leader, believe that humans have inherent value? And don't just slough that off and let it run off your back and avoid the question. Really think about it.

0:13:24.5 Tim: You gotta come to terms with this.

0:13:25.9 Junior: You do. And you can't just say yes and move on really quickly. You have to think about this question. Do human beings have inherent value? You have to wrestle with this. You have to have a point of view.

0:13:37.8 Tim: You do.

0:13:38.4 Junior: You have to have a point of view that you can explain, and it has to show in your behavior.

0:13:44.4 Tim: It will show in your behavior.

0:13:46.2 Junior: For better or worse.

0:13:47.3 Tim: That's right.

0:13:48.9 Junior: So the moral argument, human beings have inherent value. If we believe that human beings have inherent value, what does that mean? What does that mean to you.

0:13:56.0 Tim: It means that they are entitled to respect and dignity by virtue of that inherent worth. So that naturally follows. So then there are implications and moral obligations for me as I interact with others. And if I really believe that, then I have to take that seriously. And if I fall short, then I have to do some personal reckoning. And I've got to do better.

0:14:29.0 Junior: You used the word entitled. And I think that that's interesting in this context, because your argument is that human beings have a threshold level of respect that they're entitled to by virtue of our shared humanity. Also, you can pose the question to yourself. Do you believe that you have inherent value? Why? And eventually, you probably will get down to this idea that, well, it's because I'm human. There's some latent inherent intrinsic value.

0:14:57.4 Tim: Yes.

0:14:57.6 Junior: Well, if that's true for you, is it true for other people? Is it necessarily true? What would have to be different in order for it to not be true? You have to grapple with this idea. Because if you truly believe, yeah every single time there's a person in front of me, they have inherent value that should then affect your behavior.

0:15:15.8 Tim: And if you're telling yourself that somehow you're superior, you need to excavate that belief, that assumption, that point of view. Where is that coming from? Inevitably, you will find that you are telling yourself a soothing story. That is a junk theory of superiority.

0:15:35.6 Junior: Yeah. Well, and another way to look at this is that every time, let's say that we say we believe this every time we transgress that law and we disrespect the person in front of us, we make a personal attack. Maybe it's overt, maybe less so. We're transgressing that law, and we're saying, actually, in reality, in practical terms, we maybe don't believe this so much. We maybe think that you're not so entitled to the respect that we said you were. So this is something that we really do have to come to terms with. It's something that we need to express culturally and needs to shine through in our behavior as leaders. So that's the argument number one, the moral argument.

0:16:18.7 Tim: Let me qualify that a little bit Junior, just so we don't get confused. It doesn't mean you agree.

0:16:23.2 Junior: Yeah, of course.

0:16:25.1 Tim: It doesn't mean you agree. You have inherent worth. You have inherent worth. You have inherent worth. I have inherent worth. It doesn't mean we agree, but having that inherent worth and exercising, exhibiting, demonstrating the respect and the dignity that we should give each other because of that, gives us terms of engagement to interact. It helps us negotiate. It helps us navigate those differences. But it doesn't mean we agree. So that doesn't naturally follow.

0:17:02.6 Junior: No. Well, let's move on to this next one. This one's interesting to me. Let's say that you disagree with the moral argument. You're like, yeah no, I'm a bit of a nihilist. I'm very utilitarian. I just want to get the job done.

0:17:18.7 Tim: Regardless.

0:17:19.7 Junior: Regardless. Well, let's move to the performance argument. The performance argument is that the quality of interaction regulates the speed of discovery. If you are interested only in the utility of psychological safety as it relates to performance then this is the argument that you can hang your hat on. This is what will enable consistent execution. This is what will enable predictable innovation, because you are setting a cultural tone and you are affecting the feedback loop. That's the piece of this argument That to me is the most important, is that feedback loop. As a leader, you will become increasingly distanced from that front line, from the local knowledge of what's going on tactically on the ground. If you don't have good access to that information, then your decision making capacity or its quality will only be as good as the information you get.

0:18:14.5 Tim: And you're deprived.

0:18:15.5 Junior: And you're deprived. So let's say that there are a 100 points of information and you have access to 40 of them. You can't be. You can't have the decision-making power that you otherwise would have if you had tapped into the local knowledge of the front. And the local knowledge of the front will only move its way up when it's culturally advantageous for it to do so. If you're consistently punishing that front line or people feel scared, they don't wanna move the information up because maybe it's bad news, maybe it's dissent, and they're saying, well, based on the risk profile, I don't wanna lose my job, or maybe I don't want to lose my social credibility, or I don't want to lose my political standing. So this information that could be useful up there, I'm just gonna keep it here to myself. You don't get to have it. And you may never even know that as a leader. You don't know what you don't know.

0:19:13.4 Tim: No, you don't.

0:19:13.5 Junior: And you don't know that that information is just over in the corner waiting to be unearthed, but you're not going to have access to it because of your behavior or because of the behavior that you tolerate.

0:19:24.5 Tim: Yeah. I want to continue this, Junior. So we're making the practical argument now, the utilitarian logic here. So let me frame it this way to add to what you just said. Do you want your team working, acting, performing on a compliance model? Do you want them on a compliance track, or do you want them on a commitment track? Because if they're on a commitment track, they will, of their own volition, release their discretionary effort. They will circulate the local knowledge. They will collaborate. They will help each other. They will try to solve problems together. They will try to create solutions together. That's what a commitment track looks like. So from a purely, as you said, a purely utilitarian point of view, do you want them on a commitment track, or do you want them on a compliance track? From a performance standpoint, what does a compliance track look like? We're withholding information, as you just said. We're not reaching out. We're not collaborating. We're not involved in joint discovery. So you're going to pay the price for that.

0:20:51.3 Junior: Yeah. Well, here's a way to look at it. As a leader, what do you get paid for? You get paid for judgment, and that becomes increasingly true as you move up the hierarchy. You are not getting paid for your tactical contribution. You're getting paid for judgment, and that may come down to a few crucial decisions in a given time period. Maybe in a year, you need four good ones, and that's what they pay the big bucks for.

0:21:19.3 Tim: It could be.

0:21:20.1 Junior: Your judgment is a function of the information available to you, and that's the argument. If that information is poor, or there's not much of it, your judgment Bill will be worse than if you had more information, and it was better quality. So if you look at it from a purely utilitarian perspective, you want access to good information, and the culture has to be such that we can have good information that goes from the top down, that comes from the bottom up, and that's constantly cycling. And what you said is an interesting segue into the next point, which is kind of a third, and it's not too distant third reason why psychological safety is so important. If you are on a compliance track, how much discretionary effort do you give? Little to none.

0:22:13.2 Tim: Not a lot.

0:22:13.5 Junior: If you're on a commitment track, how much discretionary effort do you give? A whole lot. And for me, this is my personal experience, the highest performing teams that I have ever been on have been those in which its members give the most discretionary effort.

0:22:30.3 Tim: No question.

0:22:31.2 Junior: To me, that's a characteristic that might go unnoticed of the highest performing teams. If you have a team all else equal, one gives more discretionary effort, which one's gonna win? That team?

0:22:42.0 Tim: Yeah.

0:22:42.3 Junior: By a mile.

0:22:44.4 Tim: Every time.

0:22:44.7 Junior: It's not even close.

0:22:45.3 Tim: Every time.

0:22:46.2 Junior: Will you get discretionary effort if the environment is characterized by low psychological safety and punished vulnerability? No, you won't. So you want people to go the extra mile? It's a cultural issue. You can't press people into giving you their discretionary efforts. It's not possible.

0:23:02.5 Tim: As we like to say, Junior, fear breaks the feedback loop, and then you suffer the consequences.

0:23:10.4 Junior: Yeah. And in this slide, you can't afford to kill the discretionary effort of your people. I believe this strongly. And that discretionary effort is like trust. It's pretty difficult to get back. Once people start withholding their discretionary effort, it's difficult for them to start up again.

0:23:28.2 Tim: That's right.

0:23:28.5 Junior: And so you don't ever want to kill that. Let's move to this next section of the conversation. What psychological safety is not. We've talked about this many times. We have a recent episode, which if you're interested in and if what we say in the next couple of minutes resonates, go listen to that. But we felt it appropriate to throw in here. If this is the only thing you ever hear about psychological safety, we have to go through this list to debunk what psychological safety is not. It's not a shield from accountability. It's not coddling. It's not consensus decision-making, niceness, political correctness, unearned autonomy, or verbal reassurance. Any of these you want to click on?

0:24:07.3 Tim: Yeah, I think niceness, niceness is one that keeps coming up. And I think that there's a easy way to misinterpret psychological safety and conflate it with the concept of niceness. The problem with niceness is that you can be nice and have no tolerance for candor. And that's where we get into trouble. So that niceness turns into what we call kind of a dysfunctional, superficial collegiality. And that becomes dangerous because we're on the surface, we're making nice, but we're not addressing the tough issues. We can't have the hard-hitting conversations. So that's not, so you see the confusion. That's not psychological safety. That's a charade where we are kind of pretending, but we're not addressing the issues.

0:25:11.3 Junior: Yeah. Let's move into this principle here. I think that that goes along with it. Culture by design or culture by default. These are the two ways that we can approach culture. We can be intentional, we can be strategic, or we can let the chips fall and sit back and wait and see what we get. To you, what's the difference between culture by design or by default in practical terms? What do you see on the ground with organizations that choose to do it one way or the other?

0:25:44.4 Tim: When you approach culture by default, you view culture as a by-product of what you're doing. And you're not focused on it. You're not saying we are going to design for this. You're worried about the widgets that you're making. And what we're saying is, okay, we know you have to worry about the widgets that you're making, but just as importantly, you need to worry about and be intentional about the culture because the culture actually shapes the widgets that you're making. And it also shapes the people who make those widgets. And so if you let culture go, if you take this kind of, I don't know, organic approach and you just let it go, culture by default, there's about 100% chance that you're going to get a culture that you don't exactly want.

0:26:48.3 Junior: Yeah. If you approach culture by default, you're probably gonna ignore psychological safety. And ignoring psychological safety doesn't absolve you of your responsibility for psychological safety. It doesn't absolve you of your responsibility to treat your people a certain way. And it doesn't absolve you of the consequences of not having it. That's an important point. So we've hopefully given enough information at this point, and we certainly will in the next 10 minutes as we go through a bunch of stats.

0:27:20.1 Tim: I'll add one more comment, Junior. I think that when you approach culture by default rather than by design, you're actually, and I know this is a bit of a strong statement, but I think you're actually abdicating to a certain extent your role as a leader. Because for example, if you lead a team, you are the chief cultural architect of that team.

0:27:44.2 Junior: Yeah, that's not a long shot.

0:27:46.4 Tim: If you're the chief cultural architect of that team, but you approach culture by default, then are you not abdicating that stewardship, that responsibility? I think you are.

0:27:58.2 Junior: Of course. Of course you are. The chances that you will hit what you're aiming at in any pursuit if you don't aim is low. The chances are low.

0:28:11.3 Tim: 'Cause you're not aiming.

0:28:12.2 Junior: You're not aiming. So if you say, I want a really high-performing team, and high-performing teams are a function of culture, and you don't do culture by design, how likely are you to have a high-performing team? Not. Not likely at all.

0:28:28.2 Tim: No.

0:28:28.3 Junior: The chances that you achieve that by default are very close to zero.

0:28:33.2 Tim: That would be a complete accident.

0:28:36.4 Junior: It would be a complete accident.

0:28:37.1 Tim: Would it not?

0:28:37.6 Junior: The only way that that could happen in reality, I think, is if you are just sidelined, and the organization or the team itself moves on without you, and does culture by design itself, and just puts you in timeout.

0:28:56.2 Tim: It's like getting your bow and arrow out, putting a blindfold on, and hitting the middle of the target. Chances are not great that that's going to happen.

0:29:05.5 Junior: Not great. So what are the consequences of low psychological safety? If we haven't convinced you by now, let's move into some meat that will hopefully help make the point. In organizations with low psychological safety, 27% are more likely to leave their job within a year. So not just more likely to leave, period. We're going to leave at some point. 27% are more likely to leave within 12 months. 70% report feeling disengaged at work.

0:29:37.3 Tim: That's a huge number.

0:29:39.1 Junior: People, it's a massive number. Let's just go back to that for a second. 70% report feeling disengaged at work. What are the consequences of that?

0:29:50.4 Tim: What kind of... Well, it goes back to what you said, Junior. What kind of discretionary effort comes out of disengagement?

0:30:00.2 Junior: Zero.

0:30:00.5 Tim: Yeah, it's.

0:30:01.3 Junior: Well, here's another. So for all the utilitarian folks out there still listening, this to me is a competitive opportunity. If I look at this and I say 70% of people out there in low psychological safety environments, and I mean in other environments too, report feeling disengaged at work, that means that if I can get my people engaged at work, I'm gonna smoke 70% of you out the gate.

0:30:28.3 Tim: Yeah. You might want to think about doing that.

0:30:31.4 Junior: You might want to think about that, right? Okay, next one. They are 60% less likely to take risks or suggest new ideas. Not mysterious.

0:30:44.2 Tim: Wow. Think about the link to innovation here.

0:30:47.5 Junior: Right. So if you care, and we're not talking about bleeding edge technological innovation when we say innovation, although it includes that. We're talking about marginal improvements. Incremental gains.

0:31:00.3 Tim: 1% better.

0:31:00.4 Junior: 1% better. Would it be nice if your team could find 1%, 5%, 10% areas of improvement? Yeah, it would probably help a whole lot. If you could do that consistently, now we get exponential. Things start to get really interesting. And then you compare that against status quo. You compare that against incumbents. You compare that against the competitive landscape. All of a sudden it becomes pretty attractive.

0:31:29.3 Tim: Junior, I keep thinking about the organizations, many of the organizations that we're working with right now, who have a growth plan that is going from linear to exponential. And what are the implications? The cultural implications are such that you've got to have psychological safety to unleash the full potential and power of that organization or it's not gonna happen.

0:32:09.2 Junior: Yeah, if you rely solely on technical improvements to get exponential growth, you're going to be part of a very, very small bucket of organizations that are able to do that.

0:32:20.2 Tim: The culture has to carry that.

0:32:21.4 Junior: The culture has to carry that.

0:32:23.2 Tim: It does.

0:32:24.5 Junior: Yep. Here's the next one along the same lines. 40% admit to withholding ideas that could improve work processes. Withholding.

0:32:32.3 Tim: Withholding.

0:32:33.2 Junior: Meaning they have them.

0:32:34.4 Tim: Yeah.

0:32:34.7 Junior: Here's an idea.

0:32:35.3 Tim: They've got good ideas.

0:32:37.2 Junior: I'm just not going to give it to you. Is that a product of a technical outcome or a cultural outcome? Culture.

0:32:45.4 Tim: Right, right.

0:32:47.4 Junior: They are 50% more likely to experience high stress levels. Not nothing. 47% report poor team dynamics and communication. Do you think that that affects performance? Of course it does. 66% of employees are reluctant to report mistakes.

0:33:08.2 Tim: Oh, this one hurts.

0:33:09.4 Junior: This one hurts.

0:33:10.3 Tim: You cannot fix a secret, Junior, as we like to say. And so 66% of employees are reluctant to report mistakes. The mistakes are the clinical raw material to help you do better. But you don't have the benefit of even knowing that a mistake happened. What are you going to do?

0:33:34.4 Junior: Yeah. You're gonna be ignorant to that.

0:33:35.3 Tim: That's right.

0:33:35.6 Junior: Perhaps forever until it becomes or until it becomes a really big issue. And those unreported mistakes are often small enough in the short term that you won't feel them until they're catastrophic. Then very suddenly they become obvious.

0:33:53.2 Tim: That's right.

0:33:53.5 Junior: And we see that with organizations all too often.

0:33:56.2 Tim: They gradually and then suddenly pattern.

0:33:58.3 Junior: That's right.

0:33:58.4 Tim: That's right.

0:33:58.7 Junior: They see a 30% decline in customer satisfaction score. So if you think that this is just lost on your people and it's not going to affect customers, think twice. Customer sat is highly linked to employee sat. And if that employee satisfaction is a function of psychological safety, once again, you start to see what is most upstream in all of these outcomes. It's the basic cultural health for which psychological safety is the best proxy. If you ignore that, then you're ignoring the biggest lever in all of these outcomes. And to me, that seems ludicrous. Why would you ever do that? Again, depending on how you're approaching this, if it's purely profit driven and you're very operationally minded, you still can't get around it.

0:34:52.3 Tim: No, you can't.

0:34:55.5 Junior: So last one, or maybe we might have a couple more.

0:34:58.3 Tim: Yeah. A couple more maybe.

0:35:00.4 Junior: 58% report low trust in leadership. Are you gonna be able to trust your people if there's not mutual trust? If they don't trust you? No. Are you gonna get discretionary effort? No.

0:35:12.3 Tim: So can we just define trust, Junior?

0:35:15.1 Junior: Please.

0:35:16.2 Tim: 58% report low trust in leadership. Here's a very basic operationalized definition of trust. The predictive understanding of another person's behavior. So if there's low trust in leadership collectively, right, collectively, then that's the entire leadership team. That means that I don't feel confident. I don't have the reassurance about my predictive understanding of their behavior. It's either inconsistent or I can predictively, I can predict that their behavior is not going to be positive. It's going to be negative or destructive in some way. That's what we're talking about.

0:36:11.3 Junior: When I hear you say that, I think about track record. The predictive understanding comes from history. The more the history, the better the prediction. So you can't ignore this and then expect that you will have a good cultural track record and that your people will trust you. You need to build psychological safety in a way that shines through in people's perception of you as a leader. It's not something that you can just turn on immediately and build trust overnight and people will think of you as the cultural architect. It's something that they need to be able to see over time. How does this person behave?

0:36:51.3 Tim: Yes.

0:36:51.5 Junior: Such that they can spin up a scenario and with a high degree of probability say, this is what I think this person would do.

0:37:00.0 Tim: So therefore trust is based on time series data.

0:37:04.6 Junior: Yeah. Well, here's a practical example. I have bad news. I've seen you react to bad news before as a leader. And so I... Let's say that it hasn't been so good and you've flown off the handle. What do I do? I'm doing that mental math, and I'm thinking about, Well, should I tell the leader, should I not tell the leader? Let's not. That's as simple as it becomes day-to-day. Those are the types of things that are happening inside a team every day that will affect the information you get. This is the last one. 35% are less likely to pursue development opportunities. So they're just gonna stagnate, not interested in getting better for whatever reason. I'm just gonna stay here. Do you think that that affects your team? Yes. Absolutely. Do you want a team that's learning at or above the speed of change? Yes. Are they going to without an environment that supports that? No, they're not. So as we look through all of these, we have to face them and ask ourselves, can we afford all of these statistics? Can we afford to be on the back end of these? Can we afford to be the disengaged, the non-performant, the uninterested team?

0:38:34.9 Tim: Yeah.

0:38:35.2 Junior: Can we afford that and achieve this audacious goal that we have?

0:38:38.3 Tim: Yeah.

0:38:38.7 Junior: No.

0:38:39.5 Tim: These are the costs.

0:38:40.6 Junior: Of course we can't. So let's get into this next piece of the conversation, which is the looking up part of the conversation. What can we do? What's your responsibility as a leader? And what are the levers you can pull? To us there are two, modeling and coaching. Walk us through these two levers, Tim.

0:39:01.8 Tim: These are the two fundamental levers that we have as leaders. Modeling, so let's understand why modeling is number one. Modeling is your number one lever as a leader because your people learn primarily through observation and imitation, that's why. And that's why modeling will always be your number one most important lever in all of leadership. It will never go to second place or third place. It will always occupy that pull position. Always.

0:39:39.2 Junior: Yeah. As I was thinking about these two levers, I thought about two questions. The modeling question is, how do you behave? Practically speaking.

0:39:52.5 Tim: Yeah.

0:39:55.7 Junior: The coaching to me, practically speaking, is what do you tolerate? How do you behave and what do you tolerate? If you can ask and answer those two questions, you're gonna have a pretty good idea of how effective you're going to be as a leader, especially as it pertains to culture.

0:40:13.3 Tim: I think you got to say more though, Junior. Why is this about toleration? What?

0:40:21.8 Junior: Modeling is you to others, right?

0:40:24.2 Tim: Yes.

0:40:25.0 Junior: Your behavior to them, coaching is helping them with their behavior. So the tolerance comes when we're looking at the behavior of others and asking ourselves what's okay? What's acceptable? If there is no level of acceptability and everything goes.

0:40:43.6 Tim: Anything goes.

0:40:47.3 Junior: We're gonna have a problem when there's a problem. We talked at the beginning about the threshold level of respect, that each human is entitled to. And this is where this is most important. If we tolerate infractions, someone crosses that line and denigrates another person for whatever reason, and they break that law. If we tolerate that, then that is what is now acceptable in the environment. As a leader, you get what you tolerate. If we say that's intolerable here, it's not acceptable. I'm gonna draw the line. We do not do that here. And if you continue to do that, you are not welcome here. It has to be that firm.

0:41:30.2 Tim: It does.

0:41:31.1 Junior: And that can sound harsh. And that can sound like, Whoa, that's some, like, that's some cold energy.

0:41:36.7 Tim: Junior.

0:41:37.0 Junior: But you need to be deadly serious when it comes to stuff like this.

0:41:40.2 Tim: You do.

0:41:40.4 Junior: Because that's the tone that gets set. And so when everyone else sees that, they're like, Oh, he's serious. Oh, got it. Got it. That's what's acceptable or not. But if it's, Hey, I just, I don't know. I don't know if that's okay. How do you feel about that?

0:42:02.7 Tim: Yeah.

0:42:03.2 Junior: And you feel, and you come across as indecisive.

0:42:07.4 Tim: You're equivocating.

0:42:08.8 Junior: Not good.

0:42:10.0 Tim: And we're talking about the formation of norms.

0:42:13.2 Junior: Yeah.

0:42:13.6 Tim: Junior, there's an organization that we've worked with that is near and dear to my heart. And the, it's a highly productive, highly ethical organization. And the mantra that they have on the ethical side of leadership is that there is never a wrong time to do the right thing. And that is modeled A, by the leadership and then B, it's reinforced in coaching and nothing else. Nothing else is tolerated. And so when you do the modeling and you do the coaching to reinforce that, you get that norm, that becomes real. Now it's not permanent, it's perishable. So you have to keep modeling and keep coaching. But that's what leadership requires over time.

0:43:24.1 Junior: So let's bring it all the way back to psychological safety. Psychological safety is a culture of rewarded vulnerability. Vulnerability is the mechanism that determines the level of psychological safety. So when we're talking about modeling and coaching, we're talking about it relative to this principle. We are modeling acts of vulnerability. We're asking questions. We are voicing our mistakes. We're acknowledging them. We're taking some risk, we're doing things that we want our people to do. We're modeling those acts of vulnerability that we would like for them to engage in. And on the coaching side, we're helping create an environment that's conducive to that. If we do those two things well, if we model and we coach, then hopefully that vulnerability we'll be seen as predictably rewarded. And we'll start to get all of those 10 outcomes that we talked about at the very beginning. So if we go all the way back up to the top and go through those 10, one more time, I won't name them off again, but you can see them here. If I want engagement, if I want learning agility, if I want innovation, I have to be keyed in on all those acts of vulnerability that relate to that area.

0:44:39.5 Junior: So in innovation, I'm gonna be looking for people, asking questions, people making small bets, people voicing descent about a certain path. Those are the types of things I'm going to be keyed in so that I can have predictable innovation. If I want engagement. Those are the types of things that I'm gonna be especially interested in, so on and so forth.

0:45:01.6 Tim: That's right.

0:45:03.6 Junior: So whatever it was that first topic, that was a light bulb for you, I need that. As an exercise, what might be useful is to create a list, write down a list of acts of vulnerability that relate to that thing that you want. And then make it a point to look for those acts of vulnerability and validate them on your team. If you do that consistently, you'll get more of them and you'll positively affect whatever that outcome is that you want.

0:45:34.9 Tim: That's right.

0:45:36.6 Junior: What else would you say, Tim, today as we wrap up?

0:45:39.9 Tim: Well, I wanna go back and just restate one of the tenets that we talked about at the beginning of the episode, Junior. And that is it's impossible to avoid the risk of interaction. So that's not a choice that anybody has. And if you're a leader, you don't control that. But what you can control and influence in a powerful way is the pattern of response to the vulnerability. That's what we're talking about. And that is the essence of being a cultural architect.

0:46:13.3 Junior: Yeah. Couldn't agree more.

0:46:13.8 Tim: Yeah.

0:46:16.6 Junior: So let's summarize everywhere we've been. You have an organization to run as a leader. That's what you're interested in. That organization's culture affects its performance. And the best proxy for culture is psychological safety. And you control that through two channels. Your modeling behavior and your coaching. So as you do those two things well, you'll create the type of culture that enables high performance. That's the idea. So that is what you need to know about psychological safety. There's a lot more to know. There's a lot more research, there's a lot more... If you go to the YouTube channel or you go to the website, you'll see there are almost unending resources to help you learn a little bit more about psychological safety. If you're interested in the topic more broadly, go read the book, the 4 Stages of Psychological Safety. We've been on quite the ride since that book was published.

0:47:06.3 Tim: Yes, we have.

0:47:07.5 Junior: And we found that this message has resonated with a lot of leaders that we've had the privilege of helping in many organizations around the world. So, Tim, final thoughts, last sentence or two from you, what would you leave everyone with?

0:47:21.5 Tim: Well, you said it. I'll just reinforce it. Psychological safety is the best proxy indicator for the overall health, vitality, productivity of your culture.

0:47:35.6 Junior: Love it. With that, everyone, we will wrap up and say goodbye. If you like today's episode, please like and subscribe to the channel. We will post... We've been posting a lot. There's a lot of content out there.

0:47:46.5 Tim: Yeah.

0:47:47.1 Junior: And there are good episodes coming. So stay tuned and leave us a comment with what stood out to you from today's episode. We would love to hear that. And if you have ideas for future episodes, drop those in the comments as well. See you next time everybody. Bye-Bye.

0:48:08.8 Jillian: Hey, LeaderFactor listeners, it's Jillian, if you liked the content in today's episode, we've compiled all of the concepts and slides into a downloadable resource for you. Click the link in the description or visit leaderfactor.com to explore our full content library. Don't forget to subscribe and we'll catch you in the next episode.

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