How We Created A Culture Of Psychological Safety

When I meet with Polen Capital clients or employees, I often get asked about our company culture. Within this discussion, psychological safety often comes up. My perspective is consistent: To build psychological safety, businesses must create trust among their employees by moving the concept from words to actions.

Trust creates the foundation for psychological safety. Teams — especially new ones — can’t run effectively until they form meaningful connections based on trust. Only then will their best thinking come through. It sounds obvious, but it’s not practiced as much as you’d think. Recent research indicates that around 25% of employees lack trust in their employers.

Our focus on trust began in 2012 when we started studying psychologist Dr. Carol Dweck’s concept of a “growth mindset.”  A growth mindset is about believing you can continuously improve, innovate, fail, and feel empowered to share ideas and challenge each other’s thinking. We put this into practice over the next 10 years, emphasizing continuous learning, open dialogue, and personal and professional growth.

Fast forward to January 2022, when we closed our first acquisition and expanded our team of 140 people to nearly 250 today. For the integration to be successful, we needed to build a bridge of trust between the two firms and accelerate our work around psychological safety.

We put these principles into place and continue to practice them today:

1. The first step is to commit to psychological safety. This means setting clear, measurable goals, consistently communicating them across the organization, and being accountable through action.

At the beginning of 2022, we launched “trust” as a firmwide initiative for the year. To dig in, we turned to an outside expert in corporate trust-building, David Horsager, and assigned his book “Trust Edge” as a firmwide reading. Then, with everyone together in the same room for the first time since the acquisition, Horsager delivered a keynote about his eight pillars of trust. While there has been some debate post-coronavirus about the value of in-person connections, the meeting provided firsthand evidence that spending time together to connect (a pillar of trust) is critical to building psychological safety.

We also created structure and a coordinated learning program around trust. Each month, we highlighted a different trust pillar, and employees nominated colleagues who embodied that pillar. I believe actions like these led to higher client survey scores, lower attrition, and a seven-year run (and counting) on Pensions & Investments’ Best Places to Work in Money Management list.

Psychological safety is critical to our performance, but if we want our employees to put it into practice, we can’t expect them to figure it out on their own — we need to provide practical tools, strategies, and frameworks that make it easy to navigate.

2. Next, foster a safe environment for radical candor. Psychological safety exists when people feel comfortable giving feedback. Particularly difficult feedback. No one enjoys those difficult conversations, so we need to provide structure around delivering feedback and doing difficult things. At Polen Capital, this is called radical candor.

Radical candor involves giving and receiving real-time, constructive feedback where you balance challenging someone directly while still caring for them personally — a concept we first learned about from author Kim Scott. Here’s the thing, though: Radical candor isn’t possible without a high degree of trust.

Think about it this way. If I give you feedback and you trust that my intent is genuine, magic happens. You will be more open to receiving and acting on the feedback, even if my delivery isn’t perfect. The better you respond to feedback, the better you will become. You will continue to improve, and it will translate to positive business outcomes. However, if you are defensive or argumentative, the opposite happens. Continuous and thoughtful feedback stops, and the feedback loop breaks.

We have proof that our approach is working. Through internal surveys and performance reviews, our employees are sharing difficult feedback without fear of retribution. And it’s part of why they want to stay with the organization.

3. Finally, be vulnerable and a ‘radical receiver’ — others will follow. At each all-hands meeting, we ask two employees to volunteer to share their “personal why.” These stories show who they are and describe a defining moment in their life. Their honesty inspires and creates an instant and long-lasting connection and trust. If I ask others to be vulnerable, I need to lead by example and do the same. That’s why I volunteered to share my personal why in front of the firm. It’s the talk the talk and walk the walk concept.

This also goes for providing radical candor and being a “radical receiver” of feedback. There are mountains of books on giving feedback and almost none on receiving it. When you actively solicit feedback, maintain receptiveness, avoid defensiveness, ask questions, and hold yourself accountable, psychological safety increases exponentially, and both parties get the best out of one another. Giving radical candor and being a radical receiver is necessary to develop a competitive advantage in psychological safety. Show that you can be vulnerable and take feedback, and you’ll solidify trust, creating a tighter, lasting bond with colleagues who are more self-aware and equipped for success.

Psychological safety at work requires continuous effort and improvement. This is accomplished through building trust, providing and receiving radical candor, having honest conversations, and challenging people to be their best. When this environment exists, employees feel empowered to speak up without fear, try new things, and innovate. It enables the best thinking from the team and creates better outcomes for stakeholders. I am grateful to see the benefits of a trusting workforce every day.