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Why Psychological Safety Is Key for FP&A

  • By Bryan Lapidus, FPAC
  • Published: 6/15/2021

Psychological Safety_article

Business is a team sport. Companies require employees who must be aligned with the company goals and customer success. Typically, employees work in teams to maximize their skills and performance.

But what makes a successful team? Googling that question will leave you with days’ worth of reading material. In fact, Google itself spent about three years on Project Aristotle researching this question on its own teams and came away with a list of surprising attributes of a productive team, which it defines as “an interdependent group pursuing an objective.” At the top of that list is “psychological safety,” the belief that an individual employee can share opinions, facts or ideas free from suffering negative consequences to ego or career if they are not supported by the other team members.

Julia Rozovsky, who led the study at Google, wrote, “Individuals on teams with higher psychological safety are less likely to leave Google, they’re more likely to harness the power of diverse ideas from their teammates, they bring in more revenue, and they’re rated as effective twice as often by executives.”

How FP&A Can Foster Psychological Safety

This psychological safety research offers several implications for FP&A. On cross-functional teams, our roots in finance may cause other people to be hesitant to talk to us for fear that the “bean counters are in the room,” and if they say something inappropriate—business is going well or a project is delayed—the CFO will find out and their budget may be cut. Our quantitative approach to problems may be foreign to people in other departments; this may sound like arrogance, but our finance colleagues have reported this, with the end result being that intimidated teammates are hesitant to talk.

Some activities that promote psychological safety may be productive in the long term but are inefficient in the short term. Chatting with teammates at the start of meetings and asking about everyone’s weekend can make people feel closer to colleagues, but it will reduce time for other agenda items. Team building activities may be expensive or seem frivolous, but they also provide an opportunity for individuals to express their individuality and get to know each other. One-on-one meetings may not always have tangible results but they can open the dialogue for your team to communicate freely.

Peter Drucker understood this distinction when he wrote, “efficiency is doing things right; effectiveness is doing the right things.” We need to spend the time and money to make our teams comfortable enough to speak out, take risks, and feel respected. Google identified an impressive list of positive outcomes: employee retention, idea generation and support, increased revenue, and personal effectiveness. To achieve them, we need to set our finance and cross-functional colleagues at ease. Creating psychological safety on your various teams will help you to be more productive.

Cultivate Collaboration and Psychological Safety

According to AFP’s Integrative Intelligence Guide, underwritten by Microsoft, below are six steps to cultivate collaboration and create psychological safety:

  • Define the culture of your team up front and reiterate it when new members join. For example, “We follow the best idea, not where it came from,” and “We assume everyone will voice concerns, and welcome challenges to our work.” As a team leader, consider a hand-book of “how I work,” including preferred communication style (when to email, call, text, use collaboration software).
  • Consider everyone’s incentives and goals—yours, theirs, and shared. How can they be aligned?
  • Different teams do not mean opposition; other groups have their own decision-making parameters that you may not know.
  • Behavior before technology—how you act is more important than the medium used to convey information.
  • Build collaboration into the workflow and assignments.
  • As a leader, learn when to get out of the way and let the process work.

A big voice for psychological safety, Amy Edmondson will appear at AFP 2021 as the Tuesday Keynote speaker for a discussion titled, “Leading Through Crisis: Leveraging Teaming to Solve Problems and Innovate.” Jim Kaitz, president and CEO of AFP, sat down with Edmondson for a preview of her keynote. Listen here

Don’t miss out on the wide variety of FP&A sessions at AFP 2021, taking place Nov. 7—10 in Washington, DC.

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