PSYCHOLOGICAL SAFETY

MIT Sloan Management Review | Skills Training Links Psychological Safety to Revenue Growth | This research explores how skills training focused on psychological safety and perspective-taking can lead to tangible business outcomes, as demonstrated by a case study at Skandinaviska Enskilda Banken (SEB). It highlights the importance of combining theoretical understanding with practical application to drive innovation, collaboration, and financial performance.

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Introduction

Many organisations recognise psychological safety as crucial for innovation, collaboration, and transformation. However, most need help converting theoretical understanding into bottom-line results. This study examines how skills training in the context of real work can bridge this gap, leading to improved organisational performance and financial outcomes.

Key Insights

• Psychological safety is trainable: Viewing psychological safety as a skill that can be developed through practice allows organisations to improve performance. Creating an environment where people feel safe taking interpersonal risks is particularly important during times of change.

• Combining skills training with real work yields results: SEB's investment bank achieved revenues 25% above yearly targets in a strategically important market segment after implementing a training program that combined psychological safety skills with hands-on problem-solving.

• Perspective-taking enhances collaboration: Training in intentionally considering others' viewpoints, motivations, and emotions alongside psychological safety skills can significantly improve team dynamics and decision-making.

• Structured dialogue techniques drive progress: Applying learned skills to specific complex challenges using structured dialogue techniques helps teams make tangible progress on strategic initiatives.

• Short interventions can have a significant impact: A two-hour training session was a turning point that enabled SEB's senior management team to pool their knowledge and expertise more effectively.

Recommendations

• Implement targeted skills training programs: Develop training initiatives tailored to your organisation's specific challenges and goals, focusing on psychological safety and perspective-taking skills.

• Integrate training with real-world application: Design programs that combine skills training with hands-on work on actual business problems to demonstrate the immediate value of interpersonal skills.

• Foster a culture of candor: Encourage an environment where expressing unpopular opinions, disagreeing constructively, and sharing mistakes is accepted and expected.

• Utilize structured dialogue techniques: Incorporate structured dialogue methods into team meetings and decision-making processes to apply psychological safety skills effectively.

• Measure and communicate outcomes: To demonstrate value, track training programs' impact on soft metrics (team collaboration, innovation) and hard metrics (revenue growth, project success rates).

Conclusion

By viewing psychological safety as a trainable skill and implementing targeted programs that combine theory with practical application, organisations can unlock significant potential for innovation, collaboration, and financial growth. The SEB case study demonstrates that even short interventions can substantially improve team dynamics and business outcomes when properly designed and executed.

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