Skills Training Links Psychological Safety to Revenue Growth

Many organizations around the world recognize psychological safety (PS) as being crucial for innovation, collaboration, and transformation. Briefly put, psychological safety describes an environment in which candor is expected and won’t be penalized. Although it’s often covered in leadership training, most organizations struggle to convert a theoretical understanding of PS into bottom-line results. We’ve found that this gap can be closed through skills training in the context of real work.

The investment bank at Skandinaviska Enskilda Banken (SEB), a 168-year-old Nordic financial firm, was able to realize the financial upside of improved PS by employing a management team intervention in which the concept was introduced to help the organization overcome transformation roadblocks. Members of the senior management team credit a specific two-hour training session as a turning point that enabled them to better pool their knowledge and expertise. As a result, they were able to achieve revenues 25% above yearly targets in a strategically important market segment.

Organizational performance can be improved by viewing psychological safety as a trainable skill that individuals develop with practice. Specifically, the ability to create an atmosphere in which people feel safe in taking interpersonal risks — by expressing unpopular opinions, disagreeing constructively, and sharing mistakes, failures, and other potentially embarrassing information — is an important skill in times of great change.

When Skills Training Leads to Revenue Growth: A Case Study

When SEB restructured its investment bank to better capture opportunities in the rapidly evolving financial industry landscape, the group’s newly appointed head of investment banking, Kristian Skovmand, launched a program called Collaborative Decision-Making and Strategic Progress. The program had already been used successfully by other senior leaders at SEB. This time, it involved the 10 leaders on the senior management team, including Skovmand, in a five-month team training initiative focused on two key areas:

1. Training in PS skills to increase the level of candor, and in perspective-taking — that is, intentionally putting aside one’s own perspective to envision another’s viewpoint, motivations, and emotions.
2. Applying and practicing these skills to make progress on specific complex challenges using structured dialogue techniques.

Importantly, the program combined skills training with hands-on work to solve real problems and make important decisions. The theory underlying this approach is simple: Demonstrate how interpersonal skills advance the business agenda while supporting participants in doing just that.