MIT Sloan Management Review Article on Skills Training Links Psychological Safety to Revenue Growth

Skills training for executives highlighting psychological safety and perspective-taking have been shown to improve business outcomes.

Many organizations around the world recognize psychological safety (PS) as being crucial for innovation, collaboration, and transformation. Briefly put, psychological safety describes an environment in which candor is expected and won’t be penalized. Although it’s often covered in leadership training, most organizations struggle to convert a theoretical understanding of PS into bottom-line results. We’ve found that this gap can be closed through skills training in the context of real work.

The investment bank at Skandinaviska Enskilda Banken (SEB), a 168-year-old Nordic financial firm, was able to realize the financial upside of improved PS by employing a management team intervention in which the concept was introduced to help the organization overcome transformation roadblocks. Members of the senior management team credit a specific two-hour training session as a turning point that enabled them to better pool their knowledge and expertise. As a result, they were able to achieve revenues 25% above yearly targets in a strategically important market segment.

About the Author

Per Hugander is an adjunct professor of practice at Hult International Business School, an agenda contributor to the World Economic Forum, and the founder of Transformation Backbone. Amy C. Edmondson is the Novartis Professor of Leadership and Management at Harvard Business School. Her latest book is Right Kind of Wrong: The Science of Failing Well (Simon Element, 2023).

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