This article originally was published on WRAL.
CEOs are busy, with dozens of priorities fighting for their attention. Most often, profitability is a senior executive’s number one responsibility, but it can’t be the only priority. Without a healthy workplace culture, long-term financial success is impossible. If leaders aren’t actively cultivating psychological safety, the cost of inaction — lost talent, reduced productivity and reputational damage— can be difficult to recover from.
Too often, executives underestimate the costs of a psychologically unsafe workplace because the damage isn’t always immediate or obvious. But make no mistake—ignoring these issues will hurt your business. According to SHRM, 57% of employees who rate their company culture as “poor” are actively looking for a new job. Research from Wiley found that only 53% of individual contributors feel safe enough to take risks at work. If employees are afraid of criticism or backlash for sharing ideas, they’ll hold back. That means less innovation, slower progress and a company that falls behind its competitors.
The research is equally clear on the benefits of psychological safety. Researchers from Google found that teams exhibiting high levels of psychological safety were 27% more likely to report superior performance compared to those with lower levels. In a global study, Workplace Options (WPO) found a direct correlation between psychological safety and employee engagement. Employees who feel psychologically secure are more likely to exhibit heightened levels of commitment, motivation and initiative. Teams are freer to think innovatively, take calculated risks and collaborate effectively.
Psychological Safety Starts at the Top
Culture is set by leadership, and it’s the CEO’s responsibility to encourage and promote psychological safety. If you doubt your influence, consider the results of a Stanford Graduate School of Business study of 460 CEOs across more than 300 companies, which found significant correlations between CEO behavior and company culture.
Leaders who demonstrate vulnerability, listen with empathy and welcome open conversations create an environment where employees feel safe to share ideas and take risks. Inclusive leadership practices also play a critical role. Executives who use inclusive language, encourage different perspectives and reinforce a growth mindset don’t just boost morale — they build a workforce that outperforms and overdelivers. The best leaders understand that psychological safety is not just about making employees feel good — it’s about driving business results.
But the commitment to psychological safety can’t stop at the door to the C-suite. People-first strategies must be integrated throughout the organization. “Companies must perform top-down reviews of their workplaces, job design, and other core elements of their business. The challenge for organizations is onboarding these fundamental shifts to their culture and DNA,” says Oliver Brecht, vice president & general manager of enterprise solutions at Workplace Options.
If cultivating psychological safety hasn’t been high on your list of priorities, your company culture might be in trouble. Take a hard look at what’s happening throughout your organization, paying attention to signs of low psychological safety. If any of these red flags seem familiar, it’s time to take action.
Five Warning Signs Your Workplace Lacks Psychological Safety
People don’t listen to each other. If team members frequently dismiss ideas or ignore different viewpoints, trust erodes over time. Leaders can foster psychological safety by making it clear that everyone is expected to contribute to the discussion and every idea will be considered with respect. When a new idea or an unfamiliar perspective is shared, ask probing questions to understand what is being said. Employees need to feel their experiences are valued—especially when they’re sharing concerns or proposing new solutions.
Disrespectful or insensitive language is tolerated. Microaggressions, even when unintentional, create a toxic culture. Leaders can set the tone by interrupting and correcting these behaviors as they happen. An organization can decrease the likelihood of microaggressions happening in the first place by investing in company-wide trainings that foster an inclusive culture. Employees need to know their workplace is a space where they are respected and supported.
Employees hesitate to speak up in meetings. If people aren’t contributing, it’s often because they don’t feel safe doing so. Inclusive leaders create intentional opportunities for all team members to share their perspective. If someone needs encouragement, be clear and concise in asking them to share their comments. Rather than just saying “Alex?,” you might say something like, “Alex, what are your thoughts on that timeline? Is it reasonable, or does it need to shift?” By naming the topic and a few potential answers, you’re setting people up for success.
Interruptions dominate discussions. Frequent interruptions send a signal that certain voices matter more than others. Leaders can foster better dialogue by gently and immediately correcting the behavior. I might say “Hang on a minute. I want to hear what Lauren has to say. Lauren, what’s your perspective on this?” Your public intervention signals that interruptions won’t be tolerated.
Feedback is vague or nonexistent. Employees who receive regular, constructive feedback are more engaged and perform better. Without it, they lack direction, career growth stalls, and disengagement rises. By creating a culture of frequent feedback, we can make people feel valued, capable, and encouraged to keep striving for excellence. Most leaders appreciate the power of corrective feedback to clarify expectations, yet praise is equally important. According to Gallup, regular recognition by leadership boosts employee engagement, increases productivity and increases retention.
Psychological Safety is a Competitive Advantage
When leaders make psychological safety a priority, the outcome is more than a pleasant place to work. By integrating culture-building behaviors throughout the organization, CEOs create an environment where employees can thrive. When engaged employees feel safe to challenge unsuccessful practices and contribute innovative solutions, the business benefits are undeniable: higher retention, stronger performance, and a team that drives innovation.
C-suite executives can’t afford to ignore psychological safety. It’s not a “soft” initiative—it’s a strategic investment in long-term business success. The companies that prioritize it will be the winners that attract and retain the best people, deliver superior results, and outperform the competition.
The question is: will yours be one of them?
About the Author
Donald Thompson, EY Entrepreneur Of The Year® 2023 SE Award-winner, founded The Diversity Movement, a Workplace Options Company, to fundamentally transform the modern workplace through diversity-led culture change. Recognized by Inc., Fast Company and Forbes, Thompson is author of Underestimated: A CEO’s Unlikely Path to Success, hosts the podcast “High Octane Leadership in an Empathetic World” and has published widely on leadership and the executive mindset. His new book is The Inclusive Leadership Handbook: Balancing People and Performance for Sustainable Growth, co-authored with Kurt Merriweather, Vice President of Marketing and Innovation at The Diversity Movement. Follow Thompson on LinkedIn for updates on news, events and his podcast.