Psychological Safety: The Key to Healthy, High-Performing Teams

I've been thinking a lot about what really sets healthy organisations and teams apart.

My conclusion? It all comes down to high trust and psychological safety.

Psychological safety is the shared belief that it’s safe to speak up, take risks, and make mistakes without fear of embarrassment, punishment, or retaliation.

It doesn’t mean being ‘nice’ in the sense of avoiding hard truths or smoothing over conflict. It means being respectful, genuine and open.

In a psychologically safe environment, people feel comfortable being honest, asking questions, challenging ideas (even from senior leaders), and admitting when they don’t know something - because they trust they won’t be shamed or penalised for it.

Reflecting on my corporate HR career, I worked with many teams who lacked this foundation - and a few who truly achieved it. It's not a new idea, but more organisations, teams, and leaders are waking up to its benefits.

The hardest part? Creating it - and keeping it alive.

Why Psychological Safety Matters

When people don’t feel safe, they shrink to fit. They hold back ideas. They avoid hard conversations. Performance, innovation, and engagement suffer.

But when people do feel safe? They show up fully. They speak up. They perform at their best.

And that has benefits that ripple out to their teams, their stakeholders, and the entire organisation.

Here are some of the key benefits of building psychologically safe teams:

1️⃣ Higher Performance

When team members aren’t afraid to speak up, they share ideas, challenge assumptions, and solve problems faster. Studies show psychological safety is the top predictor of high-performing teams.

2️⃣ Increased Innovation

Innovation requires risk-taking - and people won’t take risks if they fear being judged or punished for failure. Psychological safety creates the conditions where experimentation and creativity can thrive.

3️⃣ Better Learning and Resilience

In safe teams, mistakes are seen as learning opportunities, not career threats. This builds a culture of continuous improvement, agility, and growth - especially important during change or stress.

4️⃣ Stronger Communication and Collaboration

People are more likely to give honest feedback, raise concerns early, and engage in productive conflict when they feel safe. This breaks down silos and leads to better decisions.

5️⃣ Improved Wellbeing and Retention

Psychological safety reduces burnout, increases trust in leadership, and strengthens employee engagement - all key drivers of retention, especially in hybrid and high-pressure environments.

Creating Psychological Safety: It Starts With Leadership

Many leaders say they want trust and psychological safety in their teams - but overlook that it starts with them.

If you're in a leadership role, here's an uncomfortable truth: Your team will only be as open as you are.

If you’re guarded, they’ll be guarded. If you avoid admitting mistakes, so will they. If you pretend to have it all figured out, they’ll assume they need to as well.

This isn’t about leadership as performance. It’s about leading with real, human courage.

Below are four practical tips to help you start building more trust and psychological safety in your team:

Tip 1: Model Vulnerability

Working with leaders - and learning to do this better myself - I know that modelling vulnerability isn’t a ‘nice-to-have.’ It’s a foundational trust-building tool.

What does that look like in practice?

• Saying ‘I don’t know, but I’m working on it.’

• Owning a mistake before someone else names it

• Talking about challenges instead of pretending everything is fine

• Asking for feedback - not performatively, but with real openness

  
  

The benefits?

• Psychological safety deepens

• Real conversations happen

• People speak up earlier about risks, ideas, and their own needs

Leading with vulnerability doesn’t make you look weak. It shows you have strength, and that earns trust.

Tip 2: Ask for Feedback (Regularly!)

If you’re in the C-suite or in any leadership role, you set the tone.

One small change that builds big trust? Ask your direct reports for feedback.

Do it regularly, thoughtfully, and genuinely - even if it’s uncomfortable.

Here’s what I often coach leaders to try:

• Ask ‘what’ questions (they’re harder to dodge):

  • ‘What could I do or stop doing to make it easier to work with me?’

  • ‘What’s working—and what could be better?’

• Expect awkwardness. Even when you ask well, people will hesitate. Lean into that discomfort.

• Manage your defensiveness - feeling it is normal. Acting on it breaks trust.

• Reward the risk.

  • If the feedback is valid, act on it - and let them see it.

  • If you disagree, acknowledge what’s true, explain your view, and thank them for speaking up.

    
    

Tip 3: Praise and Show Gratitude

Giving feedback to a leader isn’t easy.

If you want people to keep doing it, show them you appreciate it.

Even if it felt uncomfortable to hear, accept it graciously. Tell them you value their honesty. Praise the openness and transparency.

Also: praise good work.

When people know they’re valued, they’re more likely to give and receive feedback graciously. It’s a simple but essential step in building a positive, safe environment.

Tip 4: Listen to Understand, Not to Respond or Fix

Listening sounds simple, but effective listening is a skill to practice and hone.

It means listening without:

• Interrupting

• Jumping in to fix

• Judging or evaluating

• Turning the conversation back to yourself

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When someone shares a concern, frustration, or even just a half-formed idea, they’re taking a risk.

If they’re met with defensiveness, they won’t do it again.

Instead:

Stay present (no multitasking)

Make space (silence is okay)

Get curious

Try:

• ‘Tell me more about that.’

• ‘What does support look like for you?’

• ‘How are you really doing with this?’

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When people feel truly heard, they feel safe.

Final Thoughts

Psychological safety isn’t created through policy. It’s built through behaviour. Every interaction is an opportunity to deepen (or damage) trust.

As a former HR Director and now coach and consultant, I know firsthand how much this work matters - not just for performance, but for wellbeing, engagement, and long-term organisational health.

If you’d like help building psychological safety in your team or organisation - with assessment tools, executive coaching, or bespoke consultancy - get in touch.

At Awakened Executives, we help leaders build happy, healthy, high-performing teams by starting with trust.

If this topic resonates, I’d love to hear your experiences -good or bad! Where have you seen psychological safety flourish, and where has it been missing?