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The High Price of Fear: How a Lack of Psychological Safety Harms Business and Employees

The other week I made a post identifying the incredible impact that having a psychologically safe working environment can have on both the employees and the company overall. Today I want to talk about reasons why this concept is often overlooked in the workplace as well as the risks associated with failing to promote a healthy company culture.


Psychological safety is a foundational component of developing a healthy workplace. When employees feel secure in their position it opens up the ability for them to express their opinions and ideas. This is how trust and respect are built within a system. It also serves to promote collective knowledge and problem solving through shared expertise. Without these elements present and practiced then the inevitable outcomes of reduced productivity, poor communication, and decreased creativity will take the place of an engaged workforce.


One of the primary reasons why psychological safety is often lacking in the workplace is because managers tend to overestimate the feelings of safety and security of their employees. Employees may not speak up during meetings or offer advice or suggestions because they may not feel that it is their place, or they fear that they may face reprimand or ridicule. When speaking with employees about this topic, by far the most common explanation I receive is some form of, “what I say won’t matter anyway, so why would I?” This is a direct reflection of the work culture, and it vastly inhibits innovation and promotes anxiety and burnout among employees. What makes matters worse is that this attitude is often silent and goes unnoticed. When management asks if there are any comments or concerns, as often happens at the end of meetings, they are met with silence and this often leads them to believe that everyone is on the same page and there are no issues. This will inevitably lead to unmet expectations.


This scenario often spills over into surveys or other information-gathering techniques that are trying to address these types of issues. In most companies it is common for employees to question such surveys even if they are presented as anonymous because of that overarching fear. The truth is that we as humans are constantly engaged in a subconscious power struggle in most working environments. We have a desire to put our “best foot forward” in order to make ourselves look great without making any mistakes. This mindset often leads to employees keeping quiet even if they have vital information, or do not understand something. It takes time and effort on the part of management to help employees break these habits. A company culture that encourages questions and conversations from their employees is not a trait inherent to the company, but a learned skill that is developed with direction and consistency over time.


Failure to establish psychological safety in the workplace may lead to devastating consequences. We all have stories about how at one time or another we were afraid to speak up for fear of ridicule, and we have all seen the disasters that can come from having a culture that surrounds itself in fear. Two companies that have exhibited this type of behavior, and demonstrated their downfall as a result, include Theranos and Blockbuster.


I must admit, Theranos is the low hanging fruit when dealing with bad work cultures, but it clearly exemplifies the outdated culture of fear that has long been seen as a hallmark of business. Theranos was a biotech startup company that was founded by Elizabeth Holmes in 2003. They had funding and excitement on their side as well as numerous brilliant minds working towards creating a revolutionary product. In order to succeed they needed employees to find creative solutions to problems. However, the culture of the company was built on fear as employees were unable to ask questions for fear of losing their job or other legal consequences. The constant shifting of teams and personnel almost guaranteed that the company could not create and produce at any viable level. Individuals must be able to think and reason creatively and must be able to bounce ideas between one another to find innovative concepts. Within Theranos there was a common theme we are all familiar with which is: if you want to be promoted (or even employed), don’t ask questions and do as you are told. While this model was an unfortunate reality for many companies, research is consistently showing that businesses rooted in fear face much higher turnover rates, reduced productivity and creativity, loss of both clients and potential work applicants due to poor reputation, and overall frustration within the company.


Blockbuster is another company that I wanted to touch on because it was a huge success in its day, placing it on the other side of the spectrum from Theranos. While many cite changing times and failure to innovate as the reasons behind why Blockbuster failed, those are only symptoms of a much larger problem. The leadership at Blockbuster made several poor business decisions, but where they really went wrong was failing to listen to their employees regarding changing landscapes. This rose to levels of infighting within leadership and a failure of vision to direct the company as a whole. The inability to provide the space to ask questions and listen to those around you will place you into a creative corner while stirring up insecurity and resentment within the company.


It is true that most companies do not operate on a level of Theranos or other similar cases, but it is important to recognize that such disasters were not caused by one poor decision or interaction, but by a culture of fear and an unhealthy work environment. It is crucial to prioritize building such a culture and to work towards finding solutions together as a team. This comes in the form of encouraging discussion, talking through events and situations, and bringing the team together in times of difficulty. Ultimately, a healthy work culture leads to positive growth and innovation, and at the same time it creates a sense of purpose, value, and respect for employees. This is what draws people to want to work for your company. It is essential for leaders to consistently prioritize psychological safety and encourage the strengths of those they are leading to shine for the group as a whole. By doing so, a company can build a culture that benefits both its employees and the business for a much brighter future.





For further reading on the stories of Theranos and Blockbuster as they relate to the workforce, check out these articles:




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