The nordic business diversity index for 2024 has launched. Check it out.

The nordic business diversity index for 2024 has launched. Check it out.

The nordic business diversity index for 2024 has launched. Check it out.

The nordic business diversity index for 2024 has launched. Check it out.

The nordic business diversity index for 2024 has launched. Check it out.

The nordic business diversity index for 2024 has launched. Check it out.

How can psychological safety transform a workplace?


Psychological safety refers to a shared belief among team members that it is safe to take interpersonal risks in the workplace. This means employees feel secure voicing their ideas, seeking and providing honest feedback, collaborating openly, taking risks, and experimenting without fear of negative consequences.

Have you ever noticed meetings where only a few voices dominate while others remain silent? This silence isn't always due to a lack of ideas but often a fear of being judged or criticized. Many employees refrain from offering new ideas because of past experiences of being ignored or belittled. Such behavior, while common, clearly indicates an unsafe work environment. In the post-pandemic workplace, fostering an environment where team members feel safe to experiment and make mistakes is more crucial than ever.

What psychological safety is and why it matters

Psychological safety is formed by feelings of inclusion, safety to learn, safety to contribute and safety to challenge the status quo

Psychological safety is a fundamental aspect of a healthy workplace. It’s defined as a condition where individuals feel (a) included, (b) safe to learn, (c) safe to contribute, and (d) safe to challenge the status quo without fear of being embarrassed, marginalized, or punished (1). Psychological safety was introduced by Amy C. Edmondson in the 1990s to describe environments where employees can speak up without fear of retribution.

The importance of psychological safety was further highlighted by Google’s “Project Aristotle.” This extensive study explored over 250 team-level variables and found that successful teams share five key elements: psychological safety, dependability, structure and clarity, meaning, and impact of work. Among these, psychological safety emerged as the most critical factor for team success (2).

Organizations are only as exceptional as the people within them

Organizations are only as exceptional as the people within them. High-performing teams are the backbone of effective organizations. Team performance is tied to behaviors such as voicing new ideas, collaborating with other members, and experimenting with new ways of doing things. While these activities benefit the organization, they carry certain risks for individuals. Voicing new ideas might challenge the established way of doing things and go against the vested interests of others. Experimentation with new approaches might ultimately be unsuccessful, viewed as a failure, and lead to the individuals involved being seen in a negative light. 

Psychological safety enables individuals to take interpersonal risks, speak up, disagree openly, and raise concerns without fearing negative repercussions or the need to sugarcoat issues. It fosters an environment where sharing creative ideas is encouraged, and feedback, including critical feedback to leaders, is welcomed. Admitting mistakes, showing vulnerability, and speaking truth to power become acceptable norms. In such an environment, both workplaces and communities become more innovative and robust. 

Benefits of psychological safety

Psychological safety is not just a feel-good concept; it has tangible benefits that significantly impact both individual and team performance. Here are some of the key advantages:

  1. Boosts creativity and learning: When team members feel safe, they are more likely to share creative ideas and engage in learning activities. This openness fosters innovation and continuous improvement, driving the team towards new and better solutions.

  2. Enhances team confidence: A psychologically safe environment helps team members develop confidence in their collective abilities. This confidence translates into better performance, as members are more likely to support each other and align their efforts towards common goals.

  3. Increases employee engagement: Employees who feel safe to express their ideas and concerns are more engaged and productive. They are more likely to take initiative, contribute actively, and stay committed to their work and the organization’s objectives.

  4. Fosters effective collaboration: Teams with high psychological safety are more collaborative. Members feel comfortable sharing their perspectives and working together, leading to more cohesive and effective teamwork.

  5. Improves employee well-being: Psychological safety contributes to better mental health and overall well-being. Employees experience less stress and anxiety, knowing that they can speak up without fear of negative consequences.

  6. Improves employee retention: When employees feel safe and valued, they are more likely to remain with the organisation. This reduces turnover rates, saving the organisation the costs and disruptions associated with frequent hiring and training.

Psychological safety is the foundation that supports the entire structure of team performance. It enables individuals to contribute more effectively to group performance, enhancing team processes and outcomes.

Psychological safety doesn’t just make the workplace more pleasant; it creates a foundation for high performance and better decision-making. By fostering a psychologically safe environment, organizations can drive team effectiveness, support learning and development, retain talented employees, and ultimately achieve superior results. This approach not only nurtures a diverse and inclusive work culture but also translates into tangible business benefits, making psychological safety a critical element of organizational success.

Psychological safety strengthens Diversity, Equity, and Inclusion (DEI)

Additionally, psychological safety drives organizational diversity and strengthens Diversity, Equity, and Inclusion (DEI) initiatives. When employees from diverse backgrounds feel safe to express their unique perspectives and experiences, it enriches the workplace culture and promotes a broader range of ideas and solutions. This inclusivity fosters a sense of belonging, ensuring that all employees feel valued and recognized, which is crucial for advancing DEI goals.

Creating an inclusive workplace for diverse employees is both a matter of social justice and a strategic business decision, since companies committed to diversity and inclusion significantly outperform those that aren’t. Accoring to a study, companies committed to diversity show “a 39 percent increased likelihood of outperformance for those in the top quartile of ethnic representation versus the bottom quartile (1). Quite simply, people who come from different backgrounds will have unique perspectives and ways of thinking. This allows them to unlock new ideas that a more homogenous team might never stumble upon — especially as diverse team members bounce their ideas off one another.

When employees feel safe and valued, they are more engaged, productive, and committed to their organization.

Moreover, a supportive and affirming environment allows LGBTQ employees to thrive, enhancing their physical and emotional well-being. When employees feel safe and valued, they are more engaged, productive, and committed to their organization. This commitment not only benefits the individuals but also drives overall organizational success.

Leadership is the key driver for psychological safety

In today's professional landscape, leading with fear and authority is an outdated and unsustainable approach. When workers stay silent due to feeling unsafe or undervalued, it can lead to disastrous outcomes. From a corporate governance perspective, fostering an environment of psychological safety is crucial. Effective governance requires transparency, accountability, and open communication—all of which are undermined by fear-based leadership. When employees feel intimidated or undervalued, critical issues may go unreported, and innovative solutions may never be shared. This not only stifles growth but also increases the risk of ethical breaches and operational failures.

Effective governance requires transparency, accountability, and open communication—all of which are undermined by fear-based leadership.

Modern governance frameworks emphasize the importance of creating a culture where employees feel empowered to speak up and contribute. This involves implementing policies that promote inclusivity, protect whistleblowers, and encourage continuous feedback. Leaders must be approachable and supportive, ensuring that employees feel their contributions are valued and their concerns are addressed without fear of retribution. By abandoning fear-based management, organizations can unlock their full potential, driving innovation and creating a vibrant, inclusive workplace. The outdated principles used in military or manufacturing contexts have no place in today's dynamic and collaborative work environments.

Strategies for leaders to foster psychological safety:

Open communication: Promote a culture where employees feel comfortable sharing their thoughts and ideas without fear of judgment. Regular meetings should be held where everyone is encouraged to speak up and contribute.

Constructive feedback: Offer feedback that is both honest and supportive, focusing on growth and improvement rather than criticism. Encourage employees to seek and give feedback regularly, creating a continuous loop of communication and development.

Celebrate failures: Failure is always a risk when trying something new. Create an environment where failures are viewed as opportunities for growth. Be transparent about your own failures and discuss what can be learned from them, setting an example for the team.

Build trust: Use techniques such as team-building exercises, regular check-ins, and fostering a culture of mutual respect to enhance trust and cohesion among team members.

Training and capacity building: Investing in training programs focused on psychological safety topics such as DEI tranings can equip employees with the tools and knowledge they need to contribute to a safe and supportive workplace.

Future-proofing your organisation with psychological safety

Implementing psychological safety is essential for fostering a thriving, inclusive, and innovative workplace. By prioritizing open communication, constructive feedback, and celebrating failures, leaders can build trust and enhance team cohesion. Investing in DEI training and supportive policies ensures that all employees feel valued and empowered.

Transform your organisation with Diversity, Equity and Inclusion

At Impaktly, we help integrate sustainability, DEI and psychological safety into business practices. We offer comprehensive services such as conducting DEI maturity assessments, developing tailored training programs, and DEI transformation projects for integrating DEI into the business culture.


About the author: Aaro Angerpuro is a Sustainability Analyst at Impaktly. Aaro was the project lead of the Nordic Business Diversity Index and has experience in organisational transformation projects. 


  1. McKinsey, " Diversity matters even more: The case for holistic impact", 2023

  2. T. Clark, “The 4 Stages of Psychological Safety”, 2020

  3. C. Duhigg, “What Google Learned From Its Quest to Build the Perfect Team”, 2016