Academic literature shows that psychological safety is powerfully correlated with learning and performance in organizations. In general, the higher the uncertainty and need for learning in a given set of tasks, the more so that psychological safety is key to successful achievement of those tasks. This is why psychological safety is a significant factor in predicting team performance.
While diversity can be created through hiring practices, inclusion doesn’t automatically follow. Psychological safety is about enabling candor and creating an environment where people believe that they can speak up with ideas, questions, concerns, or even mistakes. Such a “speak up culture” plays a critical role in an organization’s ability to leverage its diversity.
Regulators such as the UK’s Financial Conduct Authority and the UK’s Banking Standards Board are paying attention to psychological safety, with both speak up culture and D&I foremost in mind. One recent piece by the FCA points out that “psychological safety is a characteristic of a healthy culture.” And a BSB survey found that 24% of all employees said that they had wanted to raise a concern at work over the last 12 months. Among those employees who said that they had spoken up about their concern, 42% said that they were listened to and taken seriously, and 40% that they were not.
Simply having a diverse workforce — as evidenced by mere statistics — will guarantee that a diverse team will operate from a sense of belonging. Leaders who prioritize diversity must also prioritize physiological safety to achieve performance results.