Why Psychological Safety Is Key to Creating an Innovation Culture

The term “innovation” has been thrown around all organizations for years. But it’s more than a buzzword: Research, case studies, and numerous articles show that groups that are innovative  (opens in a new tab) can increase brand awareness, build market share, and distinguish themselves as leaders in their field. But as beneficial as innovation is, associations often struggle with it.

Now, research published in the International Journal of Innovation Management indicates associations who want to innovate need to start by making their work culture psychologically safe for employees.

Radoslaw Nowak, Ph.D., a management studies expert at the New York Institute of Technology who authored the paper “How Psychological Safety Enables Innovation: The Effects On Potential And Realized Absorptive Capacity  (opens in a new tab),” discussed how cultivating psychological safety among staff can help associations be more innovative.

“Psychological safety, basically, is about employees feeling free to share ideas, to be who they are, to contribute without some fear of retaliation,” Nowak said. “It doesn’t have to be retaliation from management. It could be retaliation from peers. As an employee, I may be scared to share my idea because my colleagues will think that I’m stupid or incompetent.”

When a workplace culture ostracizes people for new ideas, it creates a culture that precludes innovation. However, the opposite approach helps innovation thrive.

“Psychological safety can improve a firm’s ability to continuously improve their processes,” Nowak said. “So, psychological safety is critical because it allows firms to identify a broader pool of process-improvement ideas. When employees feel that they can express themselves safely in their workplace, they will be collectively able to identify a broader pool of new ideas.”

The Role of Managers

In his research, Nowak found that managers—from the CEO down to managers who interact directly with staff—are crucial in creating that culture of psychological safety.

“Organizations need managers to be very proactive and create a specific work environment that will result in higher levels of psychological safety,” Nowak said. “They must internalize this notion that treating others in a way that they would perceive as psychologically safe is critical in our organizational culture.”

That could look like not shooting down ideas simply because that’s not the way things have been done in the past or encouraging and following up on new ideas. Training managers on effective communication and management styles is often the first step in creating an environment of psychological safety.

“The bottom line here: We want [employees] to collaborate, work together, and respect each other,” Nowak said. “Investing in training and development of managers is important, but also investing in changing the policy and the reward and incentive system would be very critical.”

An issue that can impact psychological safety—which is buoyed by collaboration and cohesiveness—is diversity.

“When we have more homogeneous groups of employees, we will expect higher cohesiveness,” Nowak said. “We know diversity is critical because it generates a different scope of ideas that we can use to help us innovate. On the other hand, we know diversity can generate conflicts and disagreements and could actually be bad for collaboration and information sharing.”

Nowak emphasizes that diversity isn’t bad, but notes that when groups feel less homogeneous, there is a tendency to be less cooperative and collaborative, which will undermine psychological safety. So, it’s key for managers to foster an environment where everyone feels like they’re on the same team and a cohesive group.

“We need managers who are aware that this could be a double-edged sword,” Nowak said. “The manager may say, ‘I need to change my leadership style.’ They need a managerial style to make sure that [their team members] work together effectively.”

Once an association has hired or trained managers to facilitate a culture of psychological safety, that doesn’t mean everything will proceed smoothly. Nowak said that if organizations don’t already have a relatively safe culture, it could take some time for changes implemented to build that culture.

“To change employees’ behavior and to hire employees that will behave in a specific way that we desire—it takes a while,” Nowak said. “I don’t think that’s a solution that we can complete within a few weeks. That’s a major organizational change.”

What are some ways your organization creates an environment that welcomes ideas from everyone? Share in the comments.

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