Creating a speak up, listen up culture in financial services
We aim to bring fresh perspectives to the topic of psychological safety, exploring it from multiple angles to gain new insights and share practical solutions from firms, experts, thought leaders and practitioners outside the industry. This information is for the industry to use in transforming culture in financial services. We encourage all financial services leaders to prioritise creating a psychologically safe environment within their firm to both reduce risk of harm and to also realise the benefits for their business and consumer.
What is psychological safety and why is it important?
Psychological safety is a characteristic of a healthy culture.
Creating an environment where employees feel safe to share ideas and speak up where they see issues results in more productive and innovative businesses. It also reduces the potential for inappropriate risk taking or behaviour which can result in major incidents of misconduct, causing harm to consumers and markets.
Harvard academic Amy Edmondson defines psychological safety as, ‘the willingness to express an opinion in the workplace.’
Speaking up does not come naturally to most people. Factors such as a preference for other peoples’ approval and trying to manage how you are seen by your colleagues, create a fear of speaking up. However, the sense of risk people feel when speaking up can be reduced by building a psychologically safe environment. This can reduce the risk of unethical behaviour and improve team performance, innovation and collaboration. Psychological safety is the felt ‘climate’ of the team that can be moulded to combat these naturally occurring factors that among other effects, hinder team performance.
Alex Chesterfield and Laura Smart from the FCA’s Behavioural Economics and Design Unit discuss the concept of psychological safety further and how it is the secret to creating effective teams.
The importance of leaders creating a psychologically safe environment
Independent researcher, John Higgins, suggests that leaders must acknowledge their status and actively recognise how the power of their words and actions can influence and support an environment of psychological safety and collaboration. Looking at psychological safety through the lens of social status helps place the discussion in to a broader theory of how humans naturally interact.
Leaders need to listen up
While psychological safety is often associated with creating a ‘speak up culture’, we have overwhelmingly heard from firms and academics alike that we also need to focus on ‘listening up.’ When employees do speak up, the response of an organisation is key to determining whether they or their colleagues will feel safe to do so again and to cultivating a ‘safe’ environment.
Managing Director of Women on Boards UK Fiona Hathorn advocates creating a listening culture. She argues that being a strong leader means creating an environment where employees feel heard, are comfortable challenging the status quo, and leaders themselves are open to feedback. She shows that inclusion is closely intertwined with listening cultures.
Creating a culture that encourages both speaking and listening up, will allow us all to benefit from diversity of thought in the workplace.
To explore psychological safety in more depth and encourage financial services leaders to learn about the value of cultivating psychological safety in their organisations, we brought together 3 multidisciplinary experts.
Host: Jonathan Davidson, Executive Director of Supervision – Retail & Authorisations
- Wendy Addison - former whistleblower and founder of SpeakOut, SpeakUp.
- James Elfer - behavioural scientist, founder of MoreThanNow.
- Dr. Stephen Pereira - MD, FRCPsych, DPM, MSc, MBBS.
In December 2018, we held our first CultureSprint on creating a speak up, listen up culture in financial services. Industry representatives, behavioural scientists, academics, consumer groups and thought leaders worked together to consider small changes that can make a big impact. After examining how psychological safety is experienced in financial firms, the 25 participants developed solutions based on behavioural science principles.
The solutions aim to improve psychological safety in financial services and create environments where employees feel they can speak up and be listened to.