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As a small business owner, you have a big responsibility: building a great team, empowering your employees, and delegating tasks and responsibilities effectively. But did you know that there is a secret ingredient to achieving these goals? That ingredient is psychological safety.

In this blog post, we will explore what psychological safety is and why it’s crucial for your small business. We will also discuss how it relates to leadership and management and share an example from history where psychological safety was lacking.

Understanding Psychological Safety

Psychological safety is the feeling that people can openly share their thoughts, ideas, and concerns without fear of being punished or ridiculed. It means creating an environment where everyone feels respected, heard, valued, and safe, regardless of their position or opinions.


As famed organizational psychologist Amy Edmondson said, “Psychological safety is a belief that one will not be punished or humiliated for speaking up with ideas, questions, concerns, or mistakes.”

Why Psychological Safety is Important for Small Businesses

In a small business, you rely on your team to make your dream a reality. To build a great team, it’s essential to create an atmosphere where your employees feel comfortable sharing their thoughts and ideas. Here are three reasons why psychological safety is vital for your small business:


1. Boosts creativity: You may think that you as the leader have all the great ideas, but I have news for you. You don’t. Your employees have some that are better. When they feel safe sharing their ideas, they are more likely to come up with new ideas and solutions to problems you never thought of. This can give your business a competitive edge!


2. Improves employee engagement: Employees who feel valued and respected are more likely to be engaged and committed to your business. This can result in higher employee retention rates and … increased productivity. I know you want that!


3. Promotes open communication: A psychologically safe environment encourages open communication, leading to better decision-making and problem-solving within your team. Better decisions can be made when everyone contributes to the pool of knowledge.

Creating Psychological Safety in Leadership and Management

As a small business owner, it’s essential to lead by example and create a psychologically safe environment for your team. Here are some tips on how to do this:


1. Encourage open communication: Make it clear to your team that you value their opinions and want to hear their ideas. Regularly ask for feedback and encourage employees to voice their concerns. I often tell my people, “Let’s get all the ideas, good and bad, into the pool of knowledge so we can discover the best ones.” We often write these on a whiteboard during meetings.


2. Show empathy and understanding: Listen actively to your people when they share and show that you care about their feelings, yes, you heard that right, and their perspectives. This helps build trust, and it helps them feel like they belong. A simple, “thank you for sharing that, John.” will go a long way.


3. Admit your mistakes: Nobody is perfect, especially you are the leader. When you make a mistake, own up to it and show your team that it’s okay to make mistakes as long as you learn from them. Tell them when their ideas are better!

Lessons from History: The Importance of Psychological Safety

Throughout history, there have been instances where a lack of psychological safety had significant consequences. Let’s look at the example of Adolf Hitler and his leadership during World War II.


Hitler’s officers and subordinates were often afraid to bring him bad news from the battlefront. No one in power likes to hear bad news, and let’s just say that Hitler disincentivized it. As a result, Hitler received an incomplete and overly positive picture of the situation, leading to poor decision-making and ultimately contributing to the downfall of Nazi Germany.


This example highlights the importance of psychological safety in leadership and decision-making. By creating an environment where people feel safe to share information and ideas, you can avoid making the same mistakes and ensure your small business thrives.

An Example Close to Home

Years ago, we had to let an employee go because we found empty beer cans in his company vehicle, which was strictly forbidden in our employee handbook. Even though we kept the reasons for termination private, I was aghast to hear in the next few days that more than one person mentioned to their supervisor that he had smelled alcohol on his breath multiple times.


At first, I was angry with them for not speaking up. I was furious. I knew these employees cared a lot about the company and loved their jobs. After a good deal of talking to various employees, I realized that some did not realize the implications and risk to the company of what was happening, but some did not feel safe to speak up. I knew from that point on that it was my job as the leader to create a psychologically safe environment for all employees to speak up.


These days, employees can speak up in person to anyone in the company, including me…and they do! We also have an anonymous feedback system where they can speak up and remain anonymous if they so wish.


Psychological safety is a vital component of building a successful small business. By creating an environment where your employees feel comfortable sharing their thoughts, ideas, and concerns, you can boost creativity, improve employee engagement, and promote open communication.


As a small business owner, take the lead, and implement some strategies to create psychological safety within your team.


In the words of renowned leadership expert Simon Sinek, “The responsibility of leadership is not to come up with all the ideas, but to create an environment in which great ideas can thrive.”


So take the time to create and nurture psychological safety in your small business, and watch what happens.