While “psychological safety” has become somewhat of a buzzword in management circles, it’s a concept that forward-thinking leaders dismiss at their own peril.

“I cannot think of a place where lower psychological safety would help you in any way,” says Harvard Business School Professor Amy Edmondson, known for her pioneering research on the topic. “Lower psychological safety would make you take fewer risks, but not necessarily better risks. So having anxiety about what other people think of you isn’t a great state for optimal performance.”

In this bonus episode of The Culture Kit with Jenny & Sameer, Edmondson, along with WD-40 CEO Steve Brass, joins hosts Jenny Chatman and Sameer Srivastava to discuss how to create a culture of psychological safety—and why it matters. This session was held November 13, 2023 as part of the Culture XChange series sponsored by the Berkeley Center for Workplace Culture and Innovation and is being broadcast publicly for the first time.

Do you have a vexing question about work that you want Jenny and Sameer to answer? Submit your “Fixit Ticket!”

You can learn more about the podcast and the Berkeley Center for Workplace Culture and Innovation at https://haas.berkeley.edu/culture/culture-kit-podcast/.

*The Culture Kit with Jenny & Sameer is a production of Haas School of Business and is produced by University FM.*

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Transcript

[0:04] JENNY CHATMAN: Before we dive into today’s episode, we want to recommend another great podcast: “Pfeffer on Power” with Stanford’s Jeffrey Pfeffer. The show equips leaders with tools for navigating power dynamics, influence, and negotiation.

[0:20] SAMEER SRIVASTAVA: It shares a similar focus on empowering leaders, just like our podcast does. Check out “Pfeffer on Power.” It’s also part of professors.fm, the podcast network that makes sense of the world with top scholars.

[00:00:00.77] SAMEER SRIVASTAVA: From Berkeley Haas and the Berkeley Center for Workplace Culture and Innovation, this is The Culture Kit with Jenny and Sameer.

[00:00:08.79] JENNY CHATMAN: I’m Jenny Chatman.

[00:00:10.17] SAMEER SRIVASTAVA: And I’m Sameer Srivastava.

[00:00:13.25] JENNY CHATMAN: We’re professors at the Haas School of Business. On this podcast, we’ll answer your questions about workplace culture.

[00:00:19.86] SAMEER SRIVASTAVA: We’ll give you practical advice that you can put to work right away.

[00:00:23.55] JENNY CHATMAN: Join us to start building your culture toolkit.

[00:00:28.10] SAMEER SRIVASTAVA: Hey, Jenny. So how’s life treating you in the dean suite?

[00:00:32.18] JENNY CHATMAN: Well, it’s exciting and busy, and I can say I’m learning a lot about leadership every day. That’s why I’m so excited to share today’s episode on how to create a workplace that is psychologically safe for everyone. It may sound like a buzzword, but I think this episode will make it clear why understanding the role of psychological safety is a critical part of every leader’s toolkit.

[00:00:56.76] SAMEER SRIVASTAVA: For sure. And we were lucky enough to host the foremost academic expert on this topic, Amy Edmondson of Harvard, last fall. She joined us along with WD-40 CEO Steve Brass for one of our culture exchange events. Let’s hear it.

[00:01:13.77] JENNY CHATMAN: Hello, everyone. It’s our pleasure to welcome you to Berkeley Center for Workplace Culture and Innovations’ Culture Exchange today focused on cultivating psychological safety and learning from failure. We are Jenny Chatman— that’s me— and Sameer Srivastava, who you’ll hear from in a moment, co-founders and co-directors of BCC and your host for today’s event.

[00:01:38.82] As you may know, our Culture Exchange series is designed to hone on specific tools and strategies from both an academic and industry standpoint that can enhance employee engagement and organizational performance. Our topic today, linking psychological safety and learning cultures, is one that many organizations are finding increasingly important, and we’re happy to share this discussion with you.

[00:02:03.16] SAMEER SRIVASTAVA: Thank you, Jenny. So let me begin with the introduction of Amy Edmondson. And it’s a real pleasure for me to introduce her because she is, as many of you know, a world-renowned scholar who has written seven books, has over 60 research papers and a global following.

[00:02:20.60] Her groundbreaking work on psychological safety and organizational excellence has been codified in several books, including The Fearless Organization, and her latest book continues on some of the same threads. It’s called The Right Kind of Wrong— the Science of Failing. Well, it’s already shortlisted for the 2023 Financial Times best business book, and I think you will all find it to be a really fascinating read.

[00:02:44.36] Amy has been ranked as one of the world’s top management thinkers. And on a personal note, I also am very grateful to Amy because when I was considering a career change to leave my job in industry and go pursue a PhD, she was very encouraging of that choice when I made it, and she also helped provide access to a company that served as a site for my dissertation research. So Amy, welcome to our session today.

[00:03:10.00] JENNY CHATMAN: I’m delighted to welcome Steve Brass. Steve is the CEO of WD-40, and he is an astute, empathetic, and perceptive leader who I’ve seen up close. Steve and I met when he took one of our CEO courses at Berkeley Executive Education, and I had a chance to learn about WD-40’s distinctive culture, which is built on articulated values, servant leadership, and a focus on collaboration.

[00:03:37.18] Steve himself as a leader is also a champion of other cultural hallmarks at WD-40, including prioritizing learning moments over blame and fueling continuous improvement and growth. This commitment to values and learning has accelerated WD-40’s success and enabled the company to thrive despite challenges like the pandemic and the Great Resignation.

[00:03:59.48] Today, we’re so honored to have Steve share with us his leadership, insights and the secrets behind WD-40’s successful corporate culture. Steve and Amy’s insights and experiences will provide a deeply informed perspective on how psychological safety can contribute to inclusive and innovative workplaces, and we look forward to hearing from them.

[00:04:20.04] So with that, thank you both for joining us, and let’s kick off the session. I have a first question. I’m guessing most people can relate to this question, which is, How do you define psychological safety in the workplace? And I’ll pass that to both of you.

[00:04:35.96] AMY EDMONDSON: OK, so I define it as a belief that you can take interpersonal risks at work. By that, I mean speaking up with a question, a concern, a dissenting view, a wild idea. These are all behaviors that at work can feel interpersonally risky. And yet if you have the confidence that that’s how we roll, that’s expected, that’s OK around here, then I would call that psychological safety.

[00:05:04.30] STEVE BRASS: Just to add to that, in terms of rereading the book over the weekend, The Right Kind of Wrong, this kind of mantra of creating an environment where employees feel safe to share ideas and collaborate and they aren’t afraid to share a contrarian point of view is something I took away from reading the book. Again, I was struck by the importance of active listening as a leadership skill in terms of encouraging psychological safety, and also the importance of transparent communication and something about communicating both the good and the bad, right. So not only sharing success stories, but also what’s not going so well.

[00:05:44.18] And I think as a leader, the importance of showing vulnerability, or as Amy would call it in her book— “fallibility” I think was the term you used— and showing that you’re kind of human and that we all make mistakes. And I think I liked as well the kind of reference to the importance of speaking up to a small thing before it becomes a big thing, because that’s the way that things tend to escalate.

[00:06:10.78] And I guess one of the key messages for me in terms of just rereading the book again was this concept of reframing failure as learning. That’s a really, really important thing, really, right, in terms of talking about failures. It’s like, How do we reframe this whole unpleasant area of failure as actual learning?

[00:06:31.02] SAMEER SRIVASTAVA: So, Amy, I want to turn to you next and talk a little bit about your research. And obviously, over a period of time, you’ve built out a whole body of research on psychological safety and its impact for organizational outcomes. If you were to summarize some of the key themes that have come out of your research, what were some of those be?

[00:06:50.13] AMY EDMONDSON: Well, I’d say that the key themes on the psychological safety research is its connection with learning. And that’s what got me interested in it in the first place, that learning in some ways in a hierarchical organization is an unnatural act. But there are conditions, there are contexts, in which you absolutely feel it’s possible to take the interpersonal risks of learning.

[00:07:12.12] So probably the most important initial and consistent observation across studies is that psychological safety varies substantially, significantly across groups within the same organization. So maybe even at WD-40, although occasionally you’ll find an organization that has such a strong learning oriented culture that those differences melt away. But more often than not, you will find organizations where some teams have psychological safety and others don’t.

[00:07:43.00] Now, famously, Google did a study called Project Aristotle probably almost 10 years ago now where they found that psychological safety was the most significant effective predictor of team performance, which tells us two things. One, that psychological safety is an enabler of high performing teams. But it also tells us more subtly that those teams had to vary in psychological safety.

[00:08:08.70] So if you were to say, how much psychological safety does Google have at that moment? it would have been a nonsensical question, because what we saw was that it was variable. That is, for me, a consistent finding across industries, across companies. It tends to vary, and it tends to predict all sorts of behaviors that can be roughly categorized as learning behaviors— asking for help, quality improvement. And it’s highly, in many, many studies, predictive of team performance. So there’s that. That’s kind of the nutshell.

[00:08:41.44] One of my favorite meta-analyses, which was done by Stuart Bunderson at Washington University and his student Bret Sanner, was that psychological safety across 5,000 teams and many different studies was consistently associated with team performance. But the effect size, the impact of psychological safety on performance, was greater the more the work required creativity, problem solving, the more it was knowledge intensive. Which is a very elegant result, because it says you can get away with a lack of psychological safety if the work is really routine or mundane or doesn’t require a lot of problem solving or collaboration. But if it does, then that climate factor comes into play in a very big way.

[00:09:28.84] JENNY CHATMAN: Yeah, super interesting. Steve, picking up on that learning culture— and he’s talking about learning subcultures even— how have you cultivated a learning culture at WD-40? What strategies worked well? What challenges did you encounter along the way? What does this look like kind of on the ground?

[00:09:49.89] STEVE BRASS: I think, I mean, going to start with the WD-40 company. So I mean, learning is in our DNA. So it goes all the way back to the scientists in San Diego who tried 39 times to find a formula for a water displacement. And on the 40th product and on the 40th attempt, they struck gold and found water displacement formula 40, which is WD-40. And so I’m personally very grateful they didn’t stop at 39, because WD-39 would have been much harder to market around the world.

[00:10:15.91] AMY EDMONDSON: [LAUGHS]

[00:10:16.68] STEVE BRASS: And we espouse a culture of the learning moment, and you mentioned it in your introduction. And it’s one way we create psychological safety. Your language is very, very important. And it’s much, much easier to go to your boss or coach, as we call them at WD-40 Company, and say “I had a learning moment” versus “I’ve made a mistake.”

[00:10:35.41] And so the power of language. A learning moment is part of our culture. And a learning moment we define as a positive or negative outcome of any situation. It needs to be openly and freely shared to benefit all people in the organization. So that aspect of the language, the kind of psychological safety that creates. And it’s much, much easier to go and talk about a learning moment versus “I screwed up, boss,” right?

[00:11:00.13] So that’s the first thing, I think. I think the second kind of element— and this is something that our previous CEO, Garry Ridge, over his 25-year tenure as CEO of the company really instilled— which is the culture of I’m not here to mark your paper. I’m here to help you get an A. And just to think about that. And so I’m here as your coach to help you win. I’m not here to judge you. I’m here to help you win.

[00:11:25.76] And coaching should happen before you go in the field of play. And so if you can make that happen as a leader and coach your people right in advance versus judging them posthumously for stuff they’ve done either wrong or right, I think that is very freeing from a cultural point of view.

[00:11:44.56] I think in terms of some of the things we’ve done well recently, as I think of a more recent years, particularly throughout the pandemic, the formation of global squads. We’re a global learning organization. We’re a global business. We operate in 176 countries around the world. And so that’s kind of our competitive advantage where we’re up against local competition. And so how we learn faster globally in order to grow faster as a business is a big part of who we are.

[00:12:11.42] And so this creation of this global squad. And it started with digital and e-commerce, actually just before the pandemic, and then the pandemic accelerated all of those learnings. And the reason I mention this is because I think in the digital world, in terms of this culture of experimentation that Amy refers to in her book, it really lends itself very, very well, I mean, for quite a legacy traditional company like us to really experiment very quickly and really learn much quicker.

[00:12:42.57] You can get immediate— you can do A/B testing online. You can test, learn, scale up, refine in one country, and then take those learnings to another country. You can measure your return on investment almost immediately with digital marketing. And so I think that’s one key area where we as a business have really learned to experiment in a much, much faster way. And so that’s been very, very powerful.

[00:13:06.48] Some of the challenges perhaps we’ve had along the way? Avoiding kind of having a box-checking mentality where we put people through a program, and checking boxes is kind of not a good thing. But even the timing of programs. And so if you’re teaching, for example, interview skills, I mean, you want to be teaching it on demand at the moment of need versus just putting it out there at a time when it’s perhaps irrelevant to people.

[00:13:30.83] And finally, I think one of the biggest kind of barriers I’ve seen has been siloed behavior. This is all about interdependence as an organization and collaboration. And so siloed behavior is the enemy of net.

[00:13:44.02] SAMEER SRIVASTAVA: Lots of great insights there, Steve. I especially like the idea of I’m not here to mark your paper but rather to help you get an A. Just a really nice management philosophy there I think that we can all take something away from.

[00:13:54.95] So, Amy, I wanted to turn back to you and talk a bit about your new book. Very exciting. And in the book you talk about different types of failure, and in particular you introduce this notion of three different kinds of failure— intelligent failures, basic failures, and complex failures. Can you unpack those terms for us? What do they mean, and how do they relate to creating a psychologically safe environment?

[00:14:17.40] AMY EDMONDSON: Great. Sure. So an intelligent failure— and by the way, that’s the right kind of wrong. That’s the only of the three types that is genuinely unavoidable and good news. I shouldn’t say unavoidable— unpreventable. It is avoidable, and I’ll try to explain the difference in a moment.

[00:14:35.22] So an intelligent failure is the undesired result of a thoughtful foray into new territory. So make no mistake, you were disappointed at something. Something happened. The event was not what you had hoped.

[00:14:50.45] But what makes it intelligent? Well, first of all, it’s in new territory, so there really wasn’t a playbook that you could rely on. It’s in pursuit of a goal. You’re not just messing around. Maybe it’s a new market you’re trying to conquer, a new customer account you’re trying to get. And you have a hypothesis, or you’ve done enough homework to have good reason to believe that what you’re about to try will work.

[00:15:13.53] And it’s as small as possible. The setback is no bigger than it has to be to get you the new knowledge that you badly need. And that’s what makes it intelligent. If you violate any one of those criteria, then you’re at least— I’m not saying it’s shameful or anything like that— but you’re at least at risk of having been wasteful in some ways.

[00:15:33.75] So more simply, an intelligent failure is a hypothesis that was wrong and as the result of a hypothesis that was wrong. That can be in a scientific laboratory. That can be in search of a life partner. That can be in the R&D department of your company. That can be in the sales context. There are many, many places where those four criteria uphold.

[00:15:53.90] Those, even though they’re disappointing, they’re failures, we must learn to celebrate them. We must learn to welcome them, because, as I said, they’re not preventable because nobody has a crystal ball. But they are avoidable, and the way you avoid them is you just don’t take risks. And that, of course, creates a different kind of risk— the risk of stagnation or failure to innovate and so on. So those we must learn to welcome with heart and soul and have companies that are doing those at a nice clip.

[00:16:24.73] Basic failures are undesired outcomes that have a single cause, usually human error. There is knowledge, there is a protocol, there is a procedure, safety or otherwise, and for whatever reason, a mistake was made and it led to the bad outcome. And then complex failures are essentially the perfect storms, the failures that happen as a result of many little things that add up where any one of the factors on its own would not have caused the failure, but the confluence of them come together and lead to some bad outcomes.

[00:16:58.69] Now, in all three of these definitions, you can have small intelligent failures. You can have larger intelligent failures, no larger than it has to be. But a clinical trial that doesn’t pan out, that doesn’t produce the efficacy you would hoped for that new drug, is very large in the sense that a lot of money and people hours went into it, but it’s no larger than it has to be if it’s a well-run trial. And a bad blind date would be an example of a small intelligent failure.

[00:17:25.94] You can have big basic failures. You can have small basic failures. So it has nothing to do with size.

[00:17:31.18] JENNY CHATMAN: That’s a super useful categorization, because I suppose if you can shoot for those advised categories, but also you can solve for them a little bit better once they’re kind of categorized. And it helps you understand probably the root causes or the emergence of the failure. So that’s super helpful.

[00:17:52.36] Let me ask Steve another question. And this kind of continues the thought of what psychological safety looks like on the ground. What are the measurable benefits you’ve observed as a result of implementing a learning culture, both in terms of business performance and employee attitudes, employee satisfaction? Can you give us some specific examples?

[00:18:16.12] STEVE BRASS: Sure. So I think when you look at— our employee engagement survey scores were about 93% consistently, which is pretty strong. We’re pretty proud of that. We have very low turnover rates, about 8%. And that hasn’t changed much actually all the way through the pandemic and the Great Resignation.

[00:18:33.49] So I think because of the culture that we’ve created, people come to our company, they learn and grow, and they stick around. We’re offering— we have a really strong internal development focus. We promote. About 70% of leadership positions are promoted from within. And so that’s kind of the contract. It’s like if you come to WD-40 Company and you perform well, you learn and grow, you will develop as the organization grows.

[00:18:59.88] When I look at our market cap in terms of business performance, it’s tripled over the past 10 years. And whereas none of that proves causality, it’s definitely correlated. Yeah, it’s all correlated. Our learning culture and the fact that we go out of our way to create this safe environment for people to be who they are, create a culture of psychological safety, a culture of belonging.

[00:19:23.53] We call ourselves a tribe. It’s a place where people belong. This real strong ethos of internal development. So they’re all parts of this successful long-term approach. We have a long-term focus as well. And I think that’s why people here, they resonate with the vision and mission that we have and the purpose of the organization, and they choose to stay.

[00:19:43.13] And so there’s eight-year tenure. I’ve been with the business 32 years, and there are many senior leaders who stick around for quite a long time. And that leads to real consistency of execution over time, and that’s very powerful.

[00:19:55.81] SAMEER SRIVASTAVA: Great. So let me turn to a question that’s really for both of you, and you can take it whatever sequence you’d like. As you’ve talked to different organizations about psychological safety, what would you say is the biggest misconception about what it actually means? And the second is, for firms that are trying to implement a culture of psychological safety, what’s the biggest challenge or roadblock that they’re likely to encounter?

[00:20:18.97] AMY EDMONDSON: Let me take the first one and let Steve take the second one, although we can go back and forth. But I just wanted to first comment on this idea of the correlation that Steve describes. I think an even better word is interconnected. I mean, the phenomena you describe— I think really the central emphasis on this is a place where people can learn and grow.

[00:20:42.07] To me, that almost says it all. And if you can pull that off, then all sorts of other good things come out of that psychological safety— but retention, belonging, promotions. So I’m comfortable calling that causal because you have a theory. You have a theory that you’ve worked on for a long time, and it pans out, right?

[00:21:03.76] If it were just sort of your— like us, we’re stepping back and we’re looking at it, and we’re going, OK, I’m going to call it causal. We maybe don’t have a right to do so. But when you are part of creating it, then I think you have a right to call it causal because it was by design, thoughtful design.

[00:21:18.58] And that is a nice lead-in to I’d say the biggest misconception, but it’s followed by a close second. The biggest misconception is that psychological safety is about being nice or such that everybody will just feel comfortable and happy all the time. I don’t know what planet that is true on ever. Actually, in a funny way, it’s almost the opposite, right? Because psychological safety is actually permission to engage in things that will be uncomfortable because of what’s at stake, because of our passion for the customer or our care for the patients or what have you.

[00:21:57.40] It’s essentially a recognition that we have to feel a little uncomfortable and we have to engage in things. You can’t learn and grow without feeling uncomfortable. So psychological safety describes an environment where that discomfort is possible, and we accept it because we know it’s serving us and our constituents.

[00:22:20.10] Probably the second one is that it’s sort of one and the same as job security. So there was a kind of funny story about a year and a bit ago when Google had maybe first massive layoffs in a long time. And there was a story widely reported where an employee in an all-hands meeting said that you promised us psychological safety. We don’t have psychological safety because look, these layoffs. That’s proof.

[00:22:46.41] I’m thinking, wait a minute. You’ve just stood up in front of everybody and expressed your dissenting view. Sorry, that’s psychological safety right there. It’s not a guarantee of lifetime employment. It’s a recognition that your voice can be heard.

[00:23:04.22] SAMEER SRIVASTAVA: Thank you. And, Steve, do you want to take the implementation question?

[00:23:06.98] STEVE BRASS: Yeah, I’ll take some barriers. And so I think it starts with that, as we kind started off, the just fear of failure. It’s a massive barrier. And so getting comfortable with— what’s the term you use in your book? You’re dispassionately analyzing failure and just taking it apart and having processes. And so that fear of failure is a big barrier.

[00:23:26.36] I think that leaders themselves can be a barrier. If you’re an ego-driven leader and all you want to do is get your opinion out there at the earliest possible kind of juncture in a discussion, that’s not going to create psychological safety. You have to use the old Simon Sinek adage, “Leaders speak less.” right. And so you have to facilitate the conversation and seek others’ points of view.

[00:23:50.01] I think that hierarchies and centralized decision-making are kind of the enemy of psychological safety and learning as well. You need to cut through those kind of barriers and just get to communication. And that’s, I think, one of the reasons these squads for us have been so successful, as I look back. Yes, and there’s some of the ones I’d put.

[00:24:09.56] JENNY CHATMAN: Maybe say a little more about the squads for people who don’t know about them.

[00:24:13.74] STEVE BRASS: So in terms of squads for us, our squads are global squads, and they are charged. So the e-commerce squad, we have [INAUDIBLE]. And I see the head of our culture squad is on, Tricia. Hello, Tricia.

[00:24:22.73] So we have global squads. We form them. I mean, let’s take the culture squad as another one. So they have a global remit. We did our global culture survey with Jenny a little while back following the attendance of the CEO program at Berkeley Haas. It gave us a whole load of insights, and so we put together a squad.

[00:24:38.60] So on my first day as CEO, I put out the survey, and then we had people volunteer to be part of the squad. And we had about 7% of the population of the company applied to be part of the culture squad. There’s such a passion around the importance of maintaining and building on our culture going forward.

[00:24:57.27] And so the squad reports into me directly, and they’re in the business of making recommendations as to how, from the outputs of the culture survey, we’re going to become an even more adaptive and innovative organization going forward. And so they’re looking at processes in terms of how we solicit points of view and creative ideas, and then how we experiment more quickly as an organization and how we close our learning loops and accelerate our learning loop.

[00:25:27.60] So it’s wonderful. It’s not Steve going out there and telling the employee base what I think we need to change. It’s our employees themselves making recommendations to senior leadership, some of which have already been adopted.

[00:25:39.98] JENNY CHATMAN: Yeah. And let me add my hello to Tricia. It’s nice to see you out there. And her squad has done really remarkable work. I would just add that one of the great features about the culture squad is that it’s cross-functional and cross-geography. So it’s really a cross-section of the organization. And I think it enables a broad perspective to be included, but also really interesting ideas to percolate up. And it’s remarkable, Tricia, what you and the squad have accomplished so far. I’ve really enjoyed watching that.

[00:26:16.48] So let me just extend the conversation a little bit further. We’re talking kind of implicitly about leading an organization that embraces psychological safety. And so let’s get a little bit more explicit about that. I mean, what specific strategies or behaviors can leaders adopt to promote a more psychologically safe environment? I heard Steve say you’re not the one who’s always talking in the room. What are some other ideas for encouraging psychological safety, and do these strategies have to be adapted when teams are physically dispersed, either geographically or now in the new world of hybrid work?

[00:26:57.64] AMY EDMONDSON: Well, I’ll start, which is to me, the answer is sort of team by team. And I don’t mean completely different formula team by team, but that even if it can be top-down or at least led and encouraged and espoused and celebrated at the top, the actual work of building psychological safety is team by team. It’s in the context of where work is done.

[00:27:23.27] And then that takes me to where the fundamental strategy is to lead with the work. Lead with the nature of the work. Let’s get on the same page about what it is this team or this unit or this branch is responsible for— maybe customer service, or it might be a new product development or whatever it is, like taking care of patients.

[00:27:44.45] Let’s get super clear on— even though it’s obvious what we’re doing— but let’s talk about what it means and why doing this, whatever this is, well is going to require us to lean in with honesty. It’s going to require us to take the risks of asking for help when we’re in over our head or sharing a wild idea. So it’s like creating the case in people’s minds for why this matters and then letting them figure out the best ways to support each other in this inherently hard thing of truth telling and taking interpersonal risks and engaging in those kinds of learning behaviors.

[00:28:22.37] And it will take slightly different forms in front-line production teams versus executive teams. What do the kids say these days, double-click on that? Because to me, that’s the key to culture change too, is conducting it in the context of the work that you’re already doing.

[00:28:39.89] People talk about culture change being so ethereal and difficult and broad. It really shouldn’t be an add-on. It should be done in the context of the work that you’re already doing. And I’m hearing you say the same thing about emphasizing psychological safety. It’s not offline. It’s inline, online.

[00:28:57.59] JENNY CHATMAN: Exactly.

[00:28:58.36] AMY EDMONDSON: And it’s really about— and for culture, it’s the same stuff. It’s just more local. It’s changing the norms, changing the behaviors, changing the taken-for-granted assumptions about how we show up with each other and what good looks like. Good looks like curious. Good looks like “I’m not sure, can you help me out here?” Good doesn’t look like “I’m perfect all the time, I never make a mistake.”

[00:29:22.09] JENNY CHATMAN: Right. Great. Steve, you’re the one who’s been in the hot seat as an actual leader.

[00:29:28.28] AMY EDMONDSON: [LAUGHS] [INAUDIBLE] leader.

[00:29:31.01] JENNY CHATMAN: What have you learned about cultivating a learning organization as a leader?

[00:29:36.97] STEVE BRASS: So I think as a leader, it starts with your behavior. So people observe what you do, not what you say. So it’s critical for leaders to walk the talk. That’s the first thing, right. In terms of not just talk the talk, but also walk the talk. And then this vulnerability or fallibility. Just demonstrate, and tell stories publicly about some of the learning moments you’ve had.

[00:30:00.56] So this concept of admitting when you don’t know, that’s very, very powerful as well. Garry Ridge used to say, my previous CEO, that the most underused words in the English language are “I don’t know.” So those are the most powerful words. And so if you can learn to say that as a CEO or a senior leader, I think it’s very, very powerful. And then if you can combine it with “what do you think?” you’re going even further and inviting a perspective in.

[00:30:26.17] So I think that’s important. And when you come down to it, it’s the whole system, isn’t it? The whole top level distributed leadership are the ones that execute this in their behaviors in terms of the organization, the hardware, the culture of the organization, and your vision, values, and mission. And so all of those things play into it. So what you reward, what you recognize as an organization.

[00:30:51.14] And so one of my kind of awards, which Tricia actually won this year, is the Contrarian, so somebody who puts forward contrarian points of view. And you publicly applaud those and the points of view that change the way we do business. And that’s really, really powerful. And it’s really hard, and it takes moral courage. And so we absolutely want to applaud that kind of behavior in our company.

[00:31:15.64] AMY EDMONDSON: What did she do to earn this very prestigious award?

[00:31:18.51] STEVE BRASS: Just leading the culture squad and raising some very uncomfortable issues. She’s challenging some of our culturally held beliefs this organization’s held for 30, 40 years, and that’s not an easy thing to do.

[00:31:30.47] AMY EDMONDSON: No. That’s great.

[00:31:32.02] SAMEER SRIVASTAVA: Great. Let me ask. The last question I have relates to intelligent risk taking and the extent to which it might reduce the level of accountability that people feel. If you create psychological safety around that, is there a risk of lost accountability? And if so, how do you mitigate against that risk?

[00:31:48.88] AMY EDMONDSON: I don’t think so, but this may depend on how you define accountability. And I’ll go back to basics here and define accountability as the ability and willingness to take account for what happened. And that includes to try to fully understand how I contributed to a failure, some kind of mishap, some kind of shortcoming by what I did, by what I didn’t do, but also an appreciation of the other factors. A clear-eyed look at what happened and why.

[00:32:21.63] And I think that ability to be scientific about it is enhanced with psychological safety. It’s about being transparent so that we’re all on the same page about what’s really true. It’s certainly not a question of excusing sloppiness or inappropriate conduct or mailing it in even, sort of not trying, not doing your best. Which I think with greater accountability— I mean greater psychological safety, there’s more of a clear line of sight on what’s really going on.

[00:32:55.86] Encouraging risk taking is something that we need in order to innovate and keep creating the companies that will thrive tomorrow. You need to be able to make your case for why this was a sensible risk. This is not about encouraging just wild-eyed speculation and large bets that we can’t afford. It’s about first you do your homework and you say, this just might work.

[00:33:21.66] And of course, that’s a team sport. We don’t want lone rangers out on their own making wild-eyed bets. We want people to run it by someone who has a different perspective. Run it by someone with maybe a different area of expertise or different market experience, and then think clearly about what metrics you’ll be looking at and when you’ll be able to declare it working or not working, and cut your losses when the time comes. And celebrate the learning.

[00:33:50.45] SAMEER SRIVASTAVA: Steve, anything to add on that question?

[00:33:52.02] STEVE BRASS: For my part, I mean, two things. I mean, the first thing WD-40— we’re a values-driven organization and we’re really clear on what our values are, and they help guide behavior. So that’s one thing I would say. And we also have a really clear set of boundaries in the organization, and they are crystal clear to people and the sandbox people can play with. Where can you innovate to and where do you push it to? It’s really important to know that and have really clear expectations about your boundaries.

[00:34:19.07] And so I think that acts as guardrails. And creativity loves constraints. Not a lot of people get that, even within our organizations. Like, we have all these rules. Actually, that sets you free. Having really clear constraints actually sets you free to innovate within those constraints.

[00:34:36.57] So that’s the first thing. The second thing that I really picked up, one of the key learnings— I have Amy’s quote on my office desk now— it’s about assumptions. And her definition of assumptions is “taken for granted beliefs that feel like facts.” I absolutely love that definition.

[00:34:55.91] And so I think actually for my own, it’s been an important learning for me. I read Amy’s book a few months ago. And for me in my first year as CEO, there’s been a couple of occasions where I’ve made assumptions that were pretty big assumptions but I didn’t check. Yeah?

[00:35:11.72] And I went public, and we made guidance based on some assumptions we made around kind of volume loss. I was kind of a little bit arrogant about it. It’s like, oh, we’ve got a really strong brand, and even though we’ve increased our prices by a substantial amount, we’re not going to lose volume because we’re WD-40 and people love our brand. Well, I was wrong.

[00:35:33.50] And so yeah. If I’d have checked my assumptions and invited a contrarian opinion— what if the opposite happens? play devil’s advocate— and conducting that kind of premortem versus a postmortem, that’s a really powerful skill that I think is one of the key things I’ve picked up from this book.

[00:35:52.61] SAMEER SRIVASTAVA: Great. So let’s turn to the audience questions. And the first question comes from an audience member who is a candidate to win our very own contrarian award with this question. Let me tell you what the question is, which is “Listening to both of you speaking, one could walk away with the belief that psychological safety is a panacea or an unalloyed good. But tell us, are there any downsides or unintended consequences of psychological safety?”

[00:36:18.15] AMY EDMONDSON: Well, I honestly don’t think that’s the same question. “Panacea” in a sense for me suggests that— and I absolutely strongly agree this is a problem and not true. “Panacea” suggests that it’s just— psychological safety is a cure-all, and all you need is to work on the psychological safety and then great performance will happen.

[00:36:39.71] Psychological safety is like taking off the brakes, but you still need fuel for the car. You still need values and a compelling purpose and a reason to get out of bed in the morning because you really care. You really want to do well on this project, on this task, what have you. And psychological safety will not give you that motivation. It’s more about freeing you up to tell the truth, to take risks.

[00:37:03.36] So I think that’s part one. It’s not the whole show. We need interpersonal skills. We need motivation. We need purpose. All that good stuff.

[00:37:12.80] I’m obviously biased, but I actually think it is an unalloyed good. I cannot think of a place where lower psychological safety would help you in any way. Because it’s not that lower psychological safety would make you take— it would make you take fewer risks, but not necessarily better risks. So having anxiety about what other people think of you isn’t a great state for optimal performance.

[00:37:40.16] Now, it’s not that psychological safety can go up and up and up and never stop. First of all, it’s not the default. But it’s about having enough confidence that you can lean in to do the work rather than worry and tie yourself in knots about well, what will so-and-so think if I say that?

[00:38:00.14] SAMEER SRIVASTAVA: Steve, any thoughts on this question?

[00:38:01.77] STEVE BRASS: Yeah, I’ll just add. So I think with this world, this uncertain, volatile, fast-changing world of ours, it’s changing from the survival of the fittest to the survival of the fittest to learn. And psychological safety absolutely underpins learning. There’s no question.

[00:38:22.41] And I look at our own journey. It’s about more experimentation and quicker learning loops and how we drive quicker learning to grow faster. And so, I mean, for me, absolutely, it’s central. It underpins learning and accelerates learning.

[00:38:37.38] I think the other point is to go back to Amy’s earlier point about this isn’t about being soft. Again, our old previous CEO, Garry Ridge, used to talk about demonstrating care and candor and the secrets in the end. You have to be tough with people. Psychological safety does not mean being soft. It means you absolutely hold people accountable for behaviors and for performance.

[00:39:03.95] JENNY CHATMAN: Yeah, great insights. We have a question from the now famous Tricia—

[00:39:09.01] [LAUGHTER]

[00:39:12.26] —which I’ll read. And it seems like we’ve touched on this point a little bit already, so maybe this is more of a summary statement of some of the things that the two of you have covered. But how would you know if psychological safety is increasing in your organization? How would you track, let’s say, progress on increasing psychological safety? What would you see?

[00:39:33.86] AMY EDMONDSON: Well, I’ll jump in with— there’s a formal answer, which is in your employee surveys, you can have a measure. The chances are you already have a measure that’s at least close enough to it. And that measure would have items like, “if you make a mistake around here, it’s held against you,” or “it’s easy to say what’s on my mind,” or “it’s easy to ask for help if I need it,” or things like that.

[00:39:55.74] My more informal response is check your ratios. And by that, I don’t mean your financial statements. I mean, what’s the ratio of red to green? How much of what you hear as a manager, let’s say, on a weekly basis is “got a problem” versus “hey, all is well” or “I need help” or “nope, no problem here,” or failure versus success?

[00:40:20.98] And if it’s too much green, it will feel good, I promise. But it may not be good, right. It may indicate— because you’re operating in a volatile, uncertain, complex, ambiguous world. So it may be that things are going wrong and you’re just not hearing about it. So at least get curious about whether that’s the possibility.

[00:40:40.47] JENNY CHATMAN: That’s funny. I was just at a faculty meeting, and there was so much red.

[00:40:44.32] [LAUGHTER]

[00:40:47.05] AMY EDMONDSON: A lot of psychological safety.

[00:40:49.95] JENNY CHATMAN: Yeah. Steve, how about you?

[00:40:52.65] STEVE BRASS: So I think it’s kind of the same point initially, which is about having data. So Jenny, if I go back to your class on the CEO program on culture. So having data and having proper analysis helps you demystify culture. Culture is held up as this kind of wonderful, special thing that you can’t touch. But as we’ve got into implementing the learnings from your class, it’s really, really, really useful.

[00:41:19.48] And so when I think about our global culture survey and surveys since then— our DEIB survey we’ve run. And so we measure on that for psychological safety. And so overall, as a company, you’re in like the 80%. People feel they can challenge their boss, they can challenge the status quo. But the data shows you that actually it’s not true of all groups. And so we have much lower, significantly lower incidence with females, ethnic minorities, and younger people.

[00:41:48.90] And so that then gives you some way to start right in terms of, OK, now we want to go and work on programs to develop psychological safety with those groups. And then you can measure and put KPIs in for what progress you intend to make over time. And so for me, it absolutely starts with demystifying culture and putting a suite of analytics in.

[00:42:09.39] SAMEER SRIVASTAVA: Great. So I think we have time for maybe one more audience question. And there’s one that I want to pose to both of you, because we’ve talked a lot about the role of leaders in cultivating a climate of psychological safety. But this question asker puts herself or himself in the position of the subordinate who is trying to influence upward and say, as a leader who is not creating a particularly psychologically safe environment, what are some things that one can do when working upwards in a hierarchy to try to create more psychological safety?

[00:42:38.63] AMY EDMONDSON: I like to say don’t let a problem above you become a problem below you. So in fact, the most important thing is to focus on that which you can control and not worry too much about what you believe other people should be doing differently.

[00:42:54.91] But can you influence? Yes. And I think the best way to influence a manager or even other people on a team you’re on is through genuine inquiry. It’s through showing up with such a curious and energized stance on what are people seeing. If you bring that energy and that curiosity to the work itself, it’s contagious. It’s infectious.

[00:43:21.82] And so just do what you can to show up as a learner. I mean, as a learner, as a grower. If you can do that, it will have either a small or a large impact on others. And particularly if that learning spirit is focused on the shared work that all of us do care about.

[00:43:42.48] SAMEER SRIVASTAVA: Thank you, Amy. Steve?

[00:43:44.01] STEVE BRASS: I think the way we’re going in as an organization, and I’ve mentioned the squads, we’re really kind of developing into a kind of a series of networked groups, or I want to use the term “squads.” And so I think the world is kind of headed that way. And so based on projects where people who are passionate, like the culture squad, like the e-commerce and digital squads, they’re getting together with a common purpose. They’re given accountability. They’re given funds and decision rights.

[00:44:09.43] They don’t go anywhere near a leader. They just make it happen. And so I think that’s a new world we’re operating in. And so this concept of the networked organization.

[00:44:18.02] We have a whole kind of new ethos of leaders coming through the organization who just act that way. They love this feeling of belonging within a global organization. Being part of a network without kind of hierarchies is really interesting and exciting for them, and I think that’s a really powerful thing.

[00:44:36.07] JENNY CHATMAN: That’s great. Thank you so much.

[00:44:38.53] So we want to thank everyone for joining us and for your excellent questions. I want to thank Amy and Steve for being such experts on this topic that they have crystallized what they know and can offer it in really tangible, actionable bites. So I really appreciate that knowledge transfer. Thank you so very much.

[00:45:01.35] [MUSIC PLAYING]

[00:45:04.42] Thanks for listening to The Culture Kit with Jenny and Sameer. Do you have a question about work that you want us to answer? Go to haas.org/culture-kit to submit your Fix-it Ticket today.

[00:45:16.97] SAMEER SRIVASTAVA: The Culture Kit podcast is a production of the Berkeley Center for Workplace Culture and Innovation at the Haas School of Business and is produced by University FM. If you enjoyed the show, be sure to hit that Subscribe button, leave us a review, and share this episode online so others who have workplace culture questions can find us too.

[00:45:37.40] JENNY CHATMAN: I’m Jenny.

[00:45:38.18] SAMEER SRIVASTAVA: And I’m Sameer.

[00:45:39.32] JENNY CHATMAN: We’ll be back soon with more tools to help fix your work culture challenges.

[00:45:43.18] [MUSIC PLAYING]

 

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