Great Teams Have Psychological Safety

I recently finished reading "Smarter, Faster, Better" by Charles Duhigg - a great read full of insights about how the most productive individuals and organisations work.

One of the best sections is about what makes a good team and it refers extensively to work done by Google during "Project Aristotle". Google spent several months studying all of their teams to try and determine what the highest performing teams have in common and whether traditionally accepted wisdom held up to scrutiny.

What they found was that it was surprisingly difficult to discover any features of a team that were always correlated with high performance. There were high performing teams that were very extroverted, but also those that were introverted. Some were best friends outside of work, while others never spoke outside of the office. They had hypothesised that teams who are physically located together would outperform teams who are distributed around the world - but even that turned out not to be the case.

The one thing that they found to be a reliable and consistent feature of high performing teams is what they called "psychological safety". The size, location, organisational structure, and every other feature you could think of turned out not to be essential for high performance. Only psychological safety is absolutely essential.

What is psychological safety? 

According Duhigg:

Psychological safety is a "shared belief, held by members of the team, that the group is a safe place for taking risks. "It is a "sense of confidence that the team will not embarrass, reject, or punish someone for speaking up... It describes a team climate characterised by interpersonal trust and mutual respect in which people are comfortable being themselves.

- Page 50, Smarter, Faster, Better.

A team that does not have psychological safety is one in which members of the team aren't comfortable being themselves and may worry about speaking their mind or taking risks once in a while. On the other hand, teams that do have psychological safety encourage innovative ideas and novel approach to be aired publicly. Of course, a team that has psychological safety is not guaranteed to be high performing, but, according to Google's research, those who don't have it will be very unlikely to reach their full potential.

How does one produce psychological safety within a team?

Again, Google has the answers. There are two behaviours that all good teams share and which contribute to an atmosphere of psychological safety: social sensitivity and equality of conversation turn-taking.

Social sensitivity is a short way of saying that members of great teams tend to be aware of how other people within the group are feeling. As Duhigg puts it, good teams "were skilled at intuiting how members felt based on their tone of voice, how people held themselves, and the expressions on their faces." (pg 60)

The other behaviour that leads to psychological safety is 'equality of conversation turn-taking'. This simply means that "all the members of the good teams spoke in roughly the same proportion... In some teams, for instance, everyone spoke during each task. In other groups, conversation ebbed from assignment to assignment but by the end of the day, everyone had spoken roughly the same amount." (Pg 60)

These two behaviours are perhaps not the two you would think essential for high performance, but once they are pointed out it's not hard to see some logic behind them. A team in which individuals are not socially sensitive are more likely to develop poor relationships over time. It's often said that a huge proportion of our communication is non-verbal i.e. There's more to understanding other people than just understanding the meaning of the words we say.

A team where individuals don't pick up social cues based on tone of voice, body language, etc is one where people will very often misunderstand one another. Best case scenario that means they will make mistakes because they're not all on the same page. Worst case scenario there will be hurt feelings, arguments and a sour mood.

As for speaking in equal amounts, it should also not be very surprising to discover that this how high performing teams operate. Assuming you have hired well in the first place, shouldn't you expect each member to have something valuable to offer when addressing a problem? The more voices that are heard, the more perspectives will be brought to bear and the more likely you are to find an innovative solution to a difficult problem.

What's more, it's almost certainly a universal law that people want a voice and they want to be heard. Giving each member of your team a voice doesn't mean that everyone gets a vote in the final decision, but it does mean that they feel valued, respected and meaningful. If you've ever been a part of a meeting where you can't get a word in you'll know how hopeless it feels. I wouldn't be surprised if that feeling spreads across all areas of your work over time.

The final comment on implementing a culture of psychological safety is that it's important that leaders set the tone and behave as they expect their team to behave.

"To create psychological safety, team leaders needed to model the right behaviours... Leaders should not interrupt team mates during conversations, because that will establish an interrupting norm. They should demonstrate they are listening by summarising what people say after they said it. They should admit what they don't know. They shouldn't end a meeting until all team members have spoken at least once.

... There are two general principles: teams succeed when everyone feels like they can speak up and when members show they are sensitive to how one another feels." (Pg 66)

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I'd really recommend getting a copy of Harder, Faster, Better by Charles Duhigg. It's got a ton of really interesting stories and insights on motivation, setting goals, building a great team and more.

 

How to be a ‘backable’ entrepreneur

If you’re a budding entrepreneur the chances are that you’re thinking about getting investment of some kind, or that you will at some point in the future. I was recently fortunate enough to attend a seminar by Ivan Nikkhooas part of the New Entrepreneurs Foundation. Here’s his expert advice on what you need to become a backable entrepreneur.

Be a missionary, not a mercenary

Be honest with yourself for a second. Are you solving a problem you really feel strongly about? Or are you just trying to make a load of money? A mercenary just wants to make money and would start any company that they thought would bring the biggest ‘prize money’.

In reality, chances are that the mercenaries of the world are not going to be a successful entrepreneur. And those mercenaries that are a success, won’t do it with backing from a venture capitalist. Think of it from the investors point of view — you wouldn’t give millions of pounds to the guy that will lose interest as soon as a more lucrative opportunity comes his way. As soon as a mercenary is feeling the heat, they’re likely to give up and find some other way to make money.

Now there’s nothing wrong with wanting to make money, but it can’t be the only thing you care about. Investors want to see that you are a missionary. You care passionately about solving a problem and you’re committed to getting it done. You’ll not only attract investment — being a missionary will make it easier to attract early employees who are as committed as you are, and your customers will join your ‘tribe’ in droves.


Be Innovative

The second step to being a backable entrepreneur is to be an innovator. Investors are looking for huge returns on their investments, and that’s unlikely to happen if your idea for a start up is to do what someone else is doing/has done.

In order to get investment your company needs to be addressing an underserved niche, solving a problem in a way that wasn’t possible in the past, or some other innovative approach. Don’t go to a Venture Capitalist and expect investment for your dog grooming shop unless you’ve got a reason for thinking that you have an innovative approach that gives you some defensible competitive advantage over the incumbents.

Of course being innovative extends to more than just your business model. The journey from start up to billion dollar exit is frought with problems that have no easy solution. When you’re running out of money and that big business deal is falling through, you need to be an innovator to solve what looks like an impossible situation.

Which nicely ties us in to the third element of being a backable entrepreneur…

Cope with stress well

By the time you’re stood in front of an investor, you’re almost certain to have learnt the lesson that being an entrepreneur can be a stressful profession. You need to be able to convince your potential investor that you’ll cope with that stress effectively rather than collapse like a dying star.

How do you demonstrate that you will cope with the stress? Having a track record of executing well is a good start, particularly if you have played a key role in launching a successful start up before. Another great indicator is that you have managed to create a great team around you. When you have a great team, you can delegate responsibilities and share the load.

Easy right?

So there you have it, who knew being a ‘backable entrepreneur’ was so easy? Of course it’s easier to say than to do. Get out there and be a stress free, innovative missionary!

I’d love to hear from anyone else out there who think there’s something else that should be added. Get in touch!

Slaying giants: Why disruption works

When a startup talks about 'disrupting' an industry, what are they really talking about, and why does it work? Disruption occurs when a new technology or innovation comes along that undermines the profitability of the established incumbents, often leading to the collapse of the latter. Often this collapse occurs very quickly over the course of just a few years.

Take for instance the mass production of cars at the beginning of the 20th Century. At the turn of the century it would have been almost incomprehensible that horse drawn carriages would be replaced as they were. However, along came Henry Ford and the mass production of cars, and very soon the number of horses plummeted (as well as the various services that existed to serve those horses).

However, why does disruption work so often, even these days? It can't simply be that the large companies can't imagine the technology that is around the corner, just waiting to wipe them out. Some of these companies spend millions or even billions of pounds researching and developing new technologies. The idea that every case of disruption was caused by some genius entrepreneur inventing a technology in his bedroom that would wipe out the competition doesn't seem very realistic.

Certainly there have been some extremely brilliant minds who have disrupted an industry (e.g. Bill Gates), but there have been too many examples of disruption for every one of them to be a genius. Plus, sometimes the millions spent on research do lead to a breakthrough, but doesn't prevent bankruptcy for the incumbent. Look at Kodak who established themselves as producers of film for cameras. Kodak actually invented the digital camera, the technology that would kill of camera film, and they still managed to go bankrupt!

Big companies have all the advantages of established dominance of a market, millions of pounds to spend developing the next big technology, and yet still manage to get displaced. What's the answer?

The Answer

The real reason that disruption occurs is because large companies are not free to think in the long term, and are under immense pressure year on year to deliver profits. When a company comes up with an innovative new idea, they must compare the likely profitability of that new product with their established business model.

Let's consider Kodak again - their core business was in producing and selling camera film, a business with a healthy margin of profit of about 85%. That meant that for every pound someone spent on a roll of Kodak camera film, 85p was profit for Kodak!

When they designed the first digital camera, the proposed profit margin was something more like 15%, much less than the traditional core business. This meant that every year when planning what to focus on, Kodak had to choose which of their options would produce the most profit and so keep their shareholders happy - obviously there was no competition as to which would win.

They chose to keep supporting their camera film, even though they knew that digital cameras were the future of photography, and eventually they ended up going bankrupt.

Another example to help illustrate the theory would be to look at Amazon. They have a very small profit margin on their core business (selling books) and so are much more likely to innovate and seek out more profitable products. This is why today Amazon allows people to sell things second hand through their site, and why they launched the Kindle which has proven extremely successful. When your core business has very slim profit margins it's easy to choose other alternatives and not suffer.

The lesson here is that when large companies behave rationally, they open themselves up to be disrupted. They don't have the freedom to move away from their core business for the sake of the long term because the pressure of delivering profits year after year is so high.

As a result, every mature profitable industry has a space with lower profit opportunities which the 'big guys' won't be interested in. It won't be worth their time focussing on the areas of their business with the lower profit margins and so there is an opportunity for start ups and entrepreneurs to move in.