SaaS Interviews with CEOs, Startups, Founders
Why You Should Start Measuring Psychological Safety Today
26 May 2023
Chapter 1: What is the main topic discussed in this episode?
I'm very excited to share this recording with you guys, which happened at our conference, sasopen.com, with over 100 speakers, all founders of B2B SaaS companies. We have a very high bar for what speakers share on stage. So you're going to enjoy this episode where we dive deep into revenue graphs, real tactics, and real growth metrics.
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Before I get started, WeSpar has actually had a huge announcement that we made this morning that I wanted to share with all of you, which is that we became a certified B Corporation. It's been a very long process. We had to convert to being a public benefit corp and then go through a rigorous evaluation on environmental issues.
social and very apropos this week, governance factors and how we manage. If you don't know what it is and you're interested in learning more, I'm around at lunch and can tell you because converting and becoming one is actually a great process. But now let's talk about psychological safety. Over the next 20 minutes, I am going to tell you what it is, why it matters,
I'm going to share with you our own experience of measuring it, which means you're going to get to see some gory details of what our employees said made them feel safe or not in our workplace. And then we'll share what we have learned when we've done this with two other technology companies who are our clients.
Much bigger companies, but still fascinating and things that you can take away from why you would want to start measuring this now to improve your culture and your performance. So first of all, just to give you a sense, we are about a $4 million ARR company. We started measuring when we were about a $2 million company. It has been transformative in a lot of different ways.
Let's start with first what it is, why it matters, and how you measure it. So Amy Edmondson is a professor from Harvard Business School. She actually wrote about this in The Fearless Organization 20 plus years ago. But it didn't gain traction until this other little technology company decided to research what made for high performing teams. This was called Project Aristotle.
It is probably the most rigorous research that's ever been done on what causes high performance and what they found across Every hypothesis tested, over 200 hypotheses, thousands of people, is those teams with the highest levels of psychological safety were the highest performing teams. So it's not just something that is good for culture.
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Chapter 2: What is the significance of psychological safety in the workplace?
We decided to make that investment, that it was that important to tackle these things. The other thing is that our team is really nice. It's a great attribute, but sometimes they're too nice. And so one of the things that we had to teach people about is this concept called radical candor. And if you haven't done this training in your organization, it's a four box model.
And what I would tell you is that top left is where we were. Ruinous empathy. And that is when you have a high relationship but not being honest with people when they've let you down or disappointed you or didn't get back to you or things like that. And so trying to get folks to move over to the top box where you can say, hey, that really bummed me out when you get back to me on this.
That impacted my ability to do Y and to be able to say that. All right, so then we did this with some others, bigger companies. And so I'm going to give you an example of a tech services firm that we worked with.
And then I'll talk about the recommendations that have come out of working with ourselves and others about learning, processes and habits, and behavioral interventions, and then what you could do to measure, learn, and take action. So we did this at a tech services firm, and I was blown away by some of the comments that came back and what we identified.
And the head of HR, who's one of the most progressive heads of HR on the planet, said this is the most important work we've ever done in HR because of what we identified. So we identified that there were habits and behaviors with how they socialize that dramatically hurt psychological safety.
around drinking, smoking, other things, always after work when other people need to be home because they have commitments with family or kids or elders. And so it was this culture of if you could drink, smoke, and hang out late, then you'd fit in. And if you didn't, you didn't. And they weren't offering any other paths towards that.
When we looked at it through a gender, race, income, et cetera lens, women felt significantly less safe. And there were a whole slew of comments of what was happening And it wasn't what I would call overt sexism. It was all the micro inequities and the micro aggressions and things like that. There's an example quote right there.
This company had been refusing to share their DNI metrics and that was raised. Just the fact that they wouldn't share and other tech companies were. And so that was raised as something. And then one of the most powerful things, we were able to tell which teams had the highest scores and the lowest scores. So we knew which leaders to do interventions with.
So what Dr. Edmondson recommends when we do this is you frame it all as a learning problem, not an execution problem. And to acknowledge we all make mistakes around psychological. We all say stupid things that we wish we didn't in the moment of being frustrated or rushed or things like that. That happens. And so acknowledging as a leader your own fallibility in this issue is really important.
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Chapter 3: How did measuring psychological safety transform the company culture?
Recognize it's a behavioral problem. We all have to go back to kindergarten at some level for psychological safety. It's things like interrupting in meetings or not soliciting people's broad asking people to speak up and just letting those who feel comfortable jumping in, jumping in. It's modeling just little micro behaviors.
And then radical candor, this idea that it is okay to be direct with people and to criticize them when they let you down, but you've got to work on that relationship. But that being too nice is actually ruinous for a company. So what do you do next? First, just measure it. Just get out there and ask the questions and see what happens.
But once you do recognize you're now on a journey of learning and listening and that you have to take action, but you need to recognize that you're going to have to take action sometimes on things that are policy and practices first, as well as behaviors.
And so over the last 20 minutes, what I think you've learned, hopefully, in this is that psychological safety is a powerful predictor of performance. And now you know the questions to ask and how to measure it. You've seen what happens when one company measures it and the things that all of a sudden it forces you to reckon with, staffing.
you know, behaviors, people, being too nice, being too aggressive, you know, those kinds of things. And then it can apply in small companies like ours with 30 people. It can apply in one of the organizations we work with has 400,000 employees around the world. So it scales. And all I would encourage you to do is just get started. Thank you very much, and I'm open for any questions now.
Thank you, Susan. Questions? So interestingly enough, all of them were very progressive on remote first. The first company we did pre-COVID. The second company, we actually did it during COVID, which was fascinating. And one of the things that came up is, in fact,
the culture had, because of COVID, actually worked much harder to connect people and to improve relationships, to solicit voice of the employee and things like that. And so what actually came out in a lot of the radios were some of the very positive things that were relatively new in the culture, particularly for remote employees.
One of the things that was interesting about the second company is about 50% of the employees were international. So we looked at whether there were global differences in psychological safety and by country. And in fact, You could very much see differences in cultures. But a lot of their hypotheses around where things were more safe or less safe were dead wrong.
That's half the valuable work is ruling out things that, in fact, aren't predictive of psychological safety and identifying those things that are. Other questions? I have one. I just missed something you said. You suggested a resource, and I went to go type it, and then I got sidetracked and forgot what you said. I don't remember. You said if you haven't done this yet, you should.
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Chapter 4: What are the seven questions to assess psychological safety?
And so you look at things like your employee net promoter score and how that has changed. You look at how your time to hire is changing. And you look at how retention is changing. And obviously, there's so many things that influence those factors. But one of the things that we're able to do, which I recognize is unique for our customers,
is because we're running these inclusive culture programs on our platform, we're able to look at those employees who participated versus those who didn't and see the impact on retention and tell clients about it. So we and our customers are unique in being able to do that, but you can, you know, if you use WeSpire, do that, or if you can, there's other ways to do that.
You just need to find the signal through the noise given so much can impact retention. And what's the frequency that you recommend for measuring that kind of employee satisfaction, NPS. Is it quarterly? Is it annually?
Yeah, so I'm a big believer that psychological safety shouldn't be measured more than annually because you need to work pretty consistently to get at the core drivers of psych safety. They're really important factors that can take time to influence.
But I think your pulse survey, whatever your pulse question is, like employee net promoter or SAT or something like that, I would recommend either running that monthly or doing some sort of ad hoc, just in time, some segment of your workforce. So that 10% of the workforce gets asked at least once every 30 days or something like that. So you've got kind of a running metric around it.
Thank you, Susan. Absolutely. Another question here in the back. Yeah. So does this also, have you seen, I feel like you said it, but what is the correlation on performance? And the reason I'm asking that is, in the product space, have you seen, like, technology teams be able to show better velocity with their JIRA board or any of that? Yeah. So the...
We rely heavily on Google's research that shows that the highest performing teams were those teams with the highest levels of psychological safety. They've done the most rigorous, academically defensible connection between psych safety and overall performance. So that's kind of the Bible of good HR metrics.
In terms of what we've seen, yes, you can implement psych safety as a team, even if the rest of the organization doesn't, and improve it to a point. But what you need to understand is what are the things outside the team that might be affecting psychological safety? And so one of the firms that we worked with is a professional services firm,
And they got started in their, it was called OLA, which is legal, admin, things like that. And one of the big things that was impacting people's levels of psychological safety was just the way the sales team was treating them. And so you could do all these things internally as the leader of this organization, but if the sales team is being
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