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Key ingredient of sustainable corporate culture

When Google started the Aristotle project in 2012, its research thesis was: “An effective team is one whose members are experts in a particular field.” The results of the research obtained did not support this thesis. Instead, among the magic ingredients of the elixir called “effective team”, psychological security was shown as the most important one, providing the foundation for the next ones, which are (1) clearly formulated goals, (2) co-workers who can be relied on, (3) tasks that are meaningful to those performing them, and (4) the belief that their work can make a difference. It was discovered at the time that even the most capable employees need psychological security to activate their potential. 

The Google project ended up in 2014, so we are today, ten years later. When asked if anything has changed in organizations during that time, it seems safe to say that not really.

Effective teams mean effective organizations

Among the challenges faced by Boards of Directors of companies, we can highlight the most significant ones: 

  Variability of the environment -> For more than 30 years, we have been living in a VUCA world (there are also later variations such as VUCA bis or BANI), which, without speaking too much on the subject, means high volatility, uncertainty, ambiguity and complexity environment. Going to macroeconomics and, for example, the well-known PESTLE analysis, the areas from which impulses for change may come are the political, economic, social, technological, environmental and legal environment. And observing trends, regulations, and social behaviour, we must admit that a lot is happening. It means the need to respond quickly and effectively to emerging market signals to, on the one hand, keep up with changes and, on the other hand, to meet competitive conditions and not fall off the train moving forward”, 

♣  Sustainability and ESG is a trend that affects not only those being a subject to CSRD reporting obligations but also those in the value chain of those entities that will have to or want to move toward sustainability. In addition to the fact that the ESRS standards allude to elements of psychological safety in their content, we also have signals from the social environment about how important sustainable operations are to the Z and Y generations. However, what probably seems most challenging is that implementing ESG strategies requires specific, innovative, and effective actions at the organizational level. According to Manpower Group’s 2023 Trends report, 78% of organizations already have or are developing sustainability strategies. Still, only 6% of them say they have the talent on their teams needed to achieve them, 

  Employee engagement and talent retention -> The Gallup Institute report released in 2023 shows a crisis in European employee engagement at work. For Poland, the figure was 14%, while for Europe it was 13%. The rest are quiet quitting (about 70%) and loud quitting (15%), i.e. declaring their intention to change jobs. Besides, based on the latest data for Poland, the number of days of sickness absence due to mental and behavioural disorders, caused mainly by severe stress and adaptive disorders, is increasing. In 2023, more sick leave was issued than in 2022, by 8.7%. Experts believe this trend will increase due to the growing problem of professional burnout. So, the problem may grow unless it’s not well addressed. 

The dependencies between the above challenges can be easily detected. Since the environment is highly variable, speed and efficiency will be required to catch up on the. At the same time the megatrend of sustainable development requires innovation and effectiveness. In this way, we come to the critical conclusion that human capital is the most essential capital in the company. To meet the challenges, companies need committed, creative people focused on innovative solutions, also considering the rapid changes in the technological environment. 

Psychological safety is NOT about being nice or lowering demands. Working in a safe environment is not about always agreeing with each other just to be friendly, nor is it about everyone doing what they want.  

So what is the point?

According to Amy C. Edmondson, who does research in psychological safety, the characteristics of safe organizational cultures include.  

Ability to report bugs safely. Paradoxically, safe teams report more bugs, but this is associated with lower risk in the future. An error reported early on can be fixed quickly,

Constructive disagreement and free flow of ideas – this means that conflicts are inevitable, and it is safe to disagree with the opinion of the boss or a team member,

People ask questions, discuss ideas, and express concerns regardless of their personality and position in the structure. 

Is psychological security enough to successfully carry out the company’s intentions? Of course not. Following in the footsteps of Amy C. Edmondson, we need leaders who: 

1. can build the mental security to create an environment conducive to learning and avoiding avoidable mistakes, and 

2. must set high expectations and inspire and enable people to achieve them. 

If we lower standards, we will not succeed because people will rest in their comfort zones and won’t be that productive, while in the case of poor security and low standards, they will enter a phase of apathy or a kind of numbness. In turn, high standards with low security is a zone of anxiety, where we are not creative. 

No passion strips the mind as effectively for all its powers to act and think as fear” said Edmund Burke nearly 60 years ago. Therefore, it is worth paying attention to this when analyzing our organization’s organizational culture. Silence in teams should be a warning sign. 

Iwona Chrzanowska

Business consultant and trainer, academic lecturer. Expert in the areas of strategic management and portfolio and project management. A promoter of sustainable development, especially in the social area. She combines business with science, a PhD student at the WSB University.

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