The Hidden Cost of Silence: How Psychological Safety Drives ROI

What if the biggest risk to your organisation isn’t market volatility or technological disruption, but the conversations that never happen? The ideas that die in silence? The warnings that remain unspoken until it’s too late?

In 2015, the cargo ship El Faro sailed straight into Category 4 hurricane Joaquin. All 33 crew members perished. Investigation records revealed a chilling pattern: crew members had concerns about the captain’s decisions, but the rigid hierarchy and fear of speaking up silenced critical voices. Those unspoken warnings cost 33 lives and millions in losses.

This tragedy illustrates a profound business truth that executive leadership often overlooks: silence isn’t golden; it’s expensive. The absence of psychological safety doesn’t just hurt morale, it devastates the bottom line through hidden risks and missed opportunities.

What Psychological Safety Really Means

First coined by Harvard Business School professor Amy Edmondson, psychological safety is a shared belief held by members of a team that the group is safe for interpersonal risk-taking. It’s not about being nice or creating a comfortable workplace. It’s about building an environment where high performing teams can surface problems early, challenge assumptions, and innovate without fear.

For executive leaders, understanding this concept is a strategic imperative that directly impacts risk management and organisational resilience.

Risk Reduction Through Early Warning Systems

When teams operate with psychological safety, they become your organisation’s early warning system. Problems surface before they become crises. Mistakes are reported before they compound. Market shifts are discussed before competitors capitalise on them.

Consider the financial impact: a single workplace accident can cost organisations hundreds of thousands in compensation, legal fees, and reputational damage. A data breach discovered months late versus days early can mean the difference between containment and catastrophe. Product defects caught in development versus after launch can save millions in recalls and lost customer trust.

Building resilient teams means creating environments where employees feel safe to raise uncomfortable truths. When your people can challenge decisions without fear, you reduce blind spots that lead to costly strategic errors.

Turning Setbacks into Strengths

Psychological safety doesn’t just prevent disasters, it accelerates recovery and learning. Effective teams in psychologically safe environments treat failures as data points rather than sources of shame. This fundamental shift transforms how organisations adapt to change.

When mistakes happen (and they will), psychologically safe teams diagnose root causes faster, implement solutions more effectively, and prevent recurrence more successfully. This isn’t just about bouncing back; it’s about bouncing forward with enhanced capabilities.

Leadership development programs often focus on individual skills, but the most impactful leaders understand that team dynamics drive performance. Creating a culture where people speak up multiplies individual talent by enabling collective intelligence to emerge.

The One Thing Every Executive Leader Must Understand

Here’s the clear takeaway that should keep you awake at night and energised during the day: The conversations your team isn’t having with you are costing you more than the conversations they are.

Every unspoken concern represents potential risk. Every unshared idea represents a missed opportunity. Every moment of silence when someone should speak up represents a failure of leadership—not theirs, but yours.

The organisations that thrive don’t just have talented individuals; they have talented individuals who feel safe to use their talents fully. The difference isn’t just measurable, it’s transformational.

Your Next Move

This week, ask your direct reports a simple question in your next one-to-one: “What’s one thing you think we should be doing differently that you haven’t felt comfortable bringing up?”

Then do the hardest thing an executive can do: listen without defending, thank them for their honesty, and act on what you learn.

The silence you break today could save your organisation tomorrow.

Addressing Stigma Around Mental Health at Work

Mental health challenges affect one in four people globally, yet many employees remain reluctant to discuss these issues in their workplace. The stigma surrounding mental health continues to create invisible barriers that prevent open dialogue, limit access to support, and ultimately harm both individual wellbeing and organisational performance.

When employees feel they must hide their mental health struggles, organisations miss crucial opportunities to provide support and create psychologically safe environments. This silence doesn’t just impact individual employees; it affects team dynamics, productivity, and the overall organisational culture that leaders work so hard to build.

Understanding How Stigma Manifests

Mental health stigma in the workplace takes many forms, often subtle yet deeply impactful. Employees frequently express fear of being perceived as weak, unreliable, or unsuitable for advancement if they disclose mental health concerns. Research from Diversity Council Australia shows that more than half of Australian workers hide a mental or even physical health condition to avoid discrimination at work.

The manifestation of this stigma creates a cycle where employees suffer in silence, leading to increased absenteeism, reduced engagement, and higher turnover rates. Without proper support mechanisms and open communication channels, these issues compound, creating an environment where psychological safety becomes compromised.

Executive coaches frequently observe how this stigma impacts a leader’s ability to connect with their team and make sound decisions. When leaders feel pressured to avoid vulnerability or admit mistakes, it can create barriers to trust and limit opportunities for growth and collaboration.

Creating a Foundation for Change

Leadership Involvement and Authenticity

Transforming organisational culture around mental health requires genuine commitment from leadership. When executive leaders and senior managers openly discuss mental health, they signal that these conversations are not only acceptable but encouraged. This inner-outward approach is essential for any successful leadership development plan aimed at creating psychologically safe workplaces.

Effective leadership coaching often emphasises the importance of authentic communication. Leaders who share their own experiences with stress, burnout, or mental health challenges (while maintaining appropriate professional boundaries) demonstrate that seeking support is a sign of strength, not weakness.

Mental Health First Aid Training

One of the most practical steps organisations can take is implementing Mental Health First Aid (MHFA) training programs. This evidence-based approach equips employees with the skills to recognise signs of mental health challenges and provide initial support to colleagues who may be struggling.

MHFA training creates a network of trained individuals throughout the organisation who can serve as first points of contact for employees experiencing difficulties. This peer-to-peer support system helps normalise conversations about mental health while ensuring that appropriate professional resources are accessible when needed.

Building Psychological Safety

Creating psychological safety requires intentional effort to establish environments where employees feel secure expressing concerns, asking questions, and admitting mistakes without fear of punishment or humiliation. Effective leadership training will focus on helping leaders at all levels develop the skills necessary to foster such environments.

Key elements include regular check-ins with team members, creating multiple channels for employees to seek support, and ensuring that mental health resources are readily available and well-communicated. When employees know that their organisation genuinely cares about their wellbeing, they’re more likely to engage openly about their challenges.

The Organisational Benefits

Organisations that successfully reduce stigma around mental health typically experience improved employee engagement, reduced absenteeism, and lower turnover rates. When employees feel supported, they’re more likely to seek help early, preventing minor concerns from escalating into major issues that require extended time off. 

This proactive approach not only benefits individual employees but also maintains team productivity and reduces the costs associated with recruitment and training. Furthermore, organisations known for their supportive approach to mental health often find it easier to attract top talent, particularly as younger generations increasingly prioritise workplace wellbeing when making career decisions.

Building a Mentally Healthy Future

Addressing mental health stigma requires ongoing commitment rather than one-off initiatives. Successful organisations continuously evaluate their approaches, seek feedback from employees, and adapt their strategies based on emerging needs and best practices.

The journey towards reducing mental health stigma begins with small, consistent actions that demonstrate genuine care for employee wellbeing. Through thoughtful leadership, executive coaching programs, and a commitment to psychological safety, organisations can create environments where mental health conversations are as normal and accepted as discussions about physical health.

As we move forward, the organisations that thrive will be those that recognise mental health support not as an additional burden, but as a fundamental component of effective leadership and sustainable business success.

Strategies to Embed Psychological Safety Across All Organisational Levels

The modern workplace faces a silent crisis. Despite growing awareness around mental health and inclusive cultures, a 2024 McKinsey survey revealed that only 26% of employees believe they work in a psychologically safe environment. This statistic represents millions of workers who feel unable to speak up, share ideas, or admit mistakes without fear of negative consequences.

Psychological safety is the foundation upon which effective teams, innovation, and organisational resilience are built. When employees feel safe to be themselves and share openly, organisations can tap into their full potential and become more adaptable.

For leaders committed to developing leadership capabilities that drive real change, embedding psychological safety across all organisational levels requires intentional strategy and sustained effort.

Three Leadership Strategies to Build Psychological Safety

Model Vulnerability and Openness

Leaders set the tone for psychological safety through their own behaviour. When senior leaders admit their mistakes, ask for help, and acknowledge what they don’t know, they create permission for others to do the same. This isn’t about appearing weak, it’s about demonstrating strength through authenticity.

Ask genuine questions during presentations rather than making statements. When someone brings up a concern, respond with curiosity before offering solutions. These small actions signal that learning and growth matter more than perfection.

Create Structured Opportunities for Input

Psychological safety flourishes when there are clear, consistent channels for employees to contribute ideas and raise concerns. Establish regular one-to-ones, team retrospectives, and skip-level meetings where the explicit purpose is to listen and learn.

While fostering an environment where open, day-to-day feedback is encouraged is vital for building trust and adaptability within teams, it is equally important to create intentional, dedicated opportunities for more structured input. By complementing casual feedback with formalised sessions, organisations can ensure that all voices are heard and more complex or sensitive matters are addressed with the attention they deserve.

Respond Positively to Feedback and Questions

How leaders respond in moments of truth determines whether psychological safety takes root or withers. When someone raises a concern, points out an error, or suggests an alternative approach, the leader’s response becomes a teaching moment for the entire team.

Thank people specifically for their input, even when it’s uncomfortable to hear. Ask follow-up questions to understand their perspective fully. When you need to disagree, focus on the idea rather than the person. Most importantly, follow through on commitments made during these conversations. This builds trust that speaking up leads to meaningful action.

Three Steps to Embed Psychological Safety Through Training

Assessment and Baseline Setting

Before developing leadership capabilities through training, organisations need to understand their current state. Conduct anonymous surveys, focus groups, and 360-degree feedback sessions to identify where psychological safety exists and where it’s lacking.

This baseline data gained from these assessments informs targeted interventions and provides a benchmark for measuring progress over time.

Skill-Building Workshops

Effective leadership development training includes specific modules on creating psychological safety. These sessions should combine theoretical understanding with practical skill development. Focus on active listening techniques, constructive feedback delivery, conflict resolution, and inclusive meeting facilitation.

Role-playing exercises are particularly valuable, allowing leaders to practice difficult conversations in a safe environment. Include scenarios specific to your industry and organisational challenges to maximise relevance and impact.

Ongoing Coaching and Support

Establish coaching relationships, peer mentoring programs, and regular check-ins to support leaders as they implement new approaches. Create learning groups where managers can share challenges and solutions with colleagues facing similar situations.

Consider appointing psychological safety champions at different levels of the organisation. These individuals receive advanced training and serve as resources for their teams whilst modelling best practices in their daily interactions.

The Performance Impact of Psychological Safety

Research consistently demonstrates that psychologically safe teams outperform their counterparts across multiple dimensions. Google’s Project Aristotle identified psychological safety as the single most important factor distinguishing high-performing teams from the rest.

When employees feel safe to contribute, organisations benefit from increased innovation, faster problem-solving, and greater adaptability to change. Effective teams emerge naturally when members can build on each other’s ideas without fear of criticism or blame.

Perhaps most critically for organisational resilience, psychologically safe environments enable early identification and resolution of problems. When employees feel comfortable raising concerns, small issues don’t escalate into major crises. This early warning system becomes invaluable during periods of uncertainty or rapid change.

Teams with high psychological safety also demonstrate better learning from failures, more effective knowledge sharing, and higher levels of employee engagement and retention. The compound effect of these benefits creates sustainable competitive advantages that are difficult for competitors to replicate.

Building Your Foundation for Success

Psychological safety is an ongoing commitment that requires consistent attention and reinforcement. The leaders who succeed in building truly safe workplaces understand that this work happens through countless small interactions rather than grand gestures.

Start with yourself. Examine your own responses to feedback, mistakes, and challenging questions. Then expand your focus to your immediate team before scaling these approaches across the broader organisation. Building psychological safety takes time, but with a solid leadership development plan, the investment leads to better performance, greater innovation, and stronger organisational resilience.

What is the Difference Between Psychological Safety and Psychosocial Safety?

Roderick Cross is a long time partner of The Leadership Sphere who is leading expert in psychosocial safety and one of Australia’s most highly sought after leadership coaches. We’ll be joined by Roderick on  September 4th, 2025 to chat with him live. Sign up here to join the conversation. 

This article was originally published by Roderick Cross on LinkedIn.

April marked the two-year anniversary of the enforcement of the ‘Managing psychosocial hazards at work’ Code of Practice (the Code) which provides direction and guidance on ways to achieve the standards for health, safety, and welfare under the WHS Act.

How do you use them to support your people and your business?

Many of you will be familiar with the story of space shuttle engineer Rodney Rocha. He raised the alarm of potential damage to the shuttle Columbia on the day of the launch ‘in an email to his immediate supervisor in bold-face type’. When his initial request for additional information was declined, he sent another email, referencing a NASA safety poster that stated: ‘If it’s not safe, say so’.

However, he shared the second email with fellow engineers, as ‘engineers were often told not to send messages much higher than their own rung in the ladder’. Feeling discouraged and knowing that saying more may be career limiting at NASA, he did not share his anxieties in subsequent mission team meetings- hoping others with more clout might offer their concerns.*

We can all appreciate that having tentative concerns and unproven ideas, and speaking up or remaining silent are traded off against the interpersonal risks and harm to performance and productivity, which in the case of Columbia was seven deaths, plus countless impacts on all staff, families and the wider community.

There are three ways to help change this for the better for your teams, business and communities.

The three ways to help change this for the better for you, your teams, business, and communities are explained in the graphic below.  The first two have some organisational attention e.g. in policy and meeting etiquette etc., which is great.  However, they are often misunderstood, used interchangeably and are distinct.

1. Psychological safety—this is good practice and a shared ‘could do’ conventions of interactions*.

2. Psychosocial safety—this is best practice and a shared ‘must do’ compliance with WHS regulations and Code. #

3. BACUPS—this is next practice and a shared ‘how to’ culture.

BAC UPS Can Help

The Building A Culture of Unifying Psychosocial Safety (BAC UPS) program is an integrated and innovative approach that leverages both psychological safety (in teams and interactions) and psychosocial safety. BACUPS includes workshops, tools, peer to peer support and team processes, as well as providing benchmark and baseline metrics into your current psychosocial health and safety, and opportunities for improvement.

BACUPS can be integrated into your current development initiatives, or it can be a stand-alone offering, e.g., 2-hours, half day or whole day workshop to quickly build knowledge, competence and confidence in your organisation to:

• Help create and maintain a psychological safe workplace environment.
• Help your organisation meet compliance with the Code of Practice.
• Helps you build a proactive, positive psychosocial safety culture where psychosocial health, wellbeing and safety are business priorities and drivers of business outcomes.
• Supports your systems, teams and individuals to be safer and healthier to sustain productivity and performance.

Although it may not be 2003 and you may not be working in NASA, we can all appreciate the need for our people to raise their hands and raise their voices to meet the changes of the current demanding and turbulent business context.

Hear more of Roderick’s insights into psychosocial safety and BAC UPS on September 4th, 2025 when he joins us to discuss all this and more. Register to the event and join us live by following this link.

*Adapted from Edmondson, A: Teaming 2012, John Wiley & Sons, p146 &147.

# Australian Legislation Framework. E.g. Code of Practice – Managing psychosocial hazards at work. SafeWork Australia 2002

How Strong Safety Cultures Drive Business Success and Resilience

August 16th is the National Day of Action Against Bullying & Violence, it’s worth reflecting on how the principles of safety and respect extend far beyond this important awareness day. The same foundations that protect against workplace bullying like trust, open communication, and genuine care for people, form the bedrock of successful organisations.

Strong safety cultures that extend beyond compliance or risk management are about creating environments where people can perform at their best, where innovation thrives, and where businesses can weather any storm. When executive leadership prioritises psychological safety and invests in leading teams with empathy and purpose, the results speak for themselves: higher engagement, better performance, and remarkable resilience when challenges arise.

The Foundation of Strong Safety Cultures

A strong safety culture rests on three fundamental pillars that executive leadership must actively cultivate.

Trust forms the cornerstone. Team members need to believe their leaders have their best interests at heart and will support them when things go wrong. This trust develops when executives demonstrate consistency between their words and actions, admit their own mistakes, and show genuine concern for employee wellbeing.

Respect manifests in how people interact across all levels of the organisation. It means valuing diverse perspectives, listening actively to concerns, and treating every individual with dignity regardless of their position. Executive coaches often work with leaders to develop these respectful communication skills that become embedded throughout organisational culture.

Open communication creates the channels through which trust and respect flow. People must feel safe to voice concerns, suggest improvements, and report problems without fear of retaliation. This psychological safety allows teams to identify and address issues before they escalate into major problems.

Executive Leadership’s Role in Psychological Safety

Executive leadership plays a pivotal role in establishing psychological safety within teams. Leaders who invest time in understanding their people, their motivations, and their concerns create environments where everyone can contribute authentically.

Effective leaders model vulnerability by acknowledging when they don’t have all the answers. They ask for input, admit uncertainties, and demonstrate that learning and growing are valued over appearing perfect. This behaviour gives permission for others to do the same, creating a culture where continuous improvement becomes natural.

Regular one-on-one conversations, team check-ins, and informal interactions all contribute to building psychological safety. Many executives benefit from executive coaching to develop these softer skills that have such a significant impact on organisational culture.

Leading teams effectively requires recognising that workplace safety encompasses physical, emotional and psychological wellbeing. When people feel secure, supported, and valued, they bring their best selves to work every day.

Impact on Business Resilience

Companies with strong safety cultures consistently outperform their competitors when facing disruption. This resilience stems from several key advantages.

Firstly, employees in psychologically safe environments are more likely to surface problems early. They don’t hide mistakes or avoid difficult conversations, which means issues get resolved quickly rather than festering into major crises.

Secondly, these organisations have higher levels of employee engagement and retention. People want to work for companies where they feel valued and supported. This stability provides a strong foundation during turbulent times.

Finally, strong safety cultures foster innovation. When people aren’t afraid to fail, they’re more willing to try new approaches, suggest improvements, and take calculated risks that drive business growth.

Practical Steps for Building Safety Culture

Building a strong safety culture requires intentional action from executive leadership. Start by conducting honest assessments of your current culture through employee surveys, exit interviews, and regular feedback sessions.

Establish clear expectations around behaviour and communication. Create policies that protect people from bullying and harassment, but more importantly, model the respectful behaviour you want to see throughout the organisation.

Invest in leadership development across all levels. This might include executive coaching for senior leaders, management training for middle managers, and communication skills development for team leaders. Leading teams effectively is a skill that can be learned and improved.

Create multiple channels for feedback and ensure they’re genuinely safe to use. Anonymous suggestion boxes, regular pulse surveys, and open-door policies all have their place, but they only work if people trust they won’t face negative consequences for honest feedback.

Celebrate examples of positive safety culture behaviours. Recognise people who speak up about problems, who support colleagues, or who demonstrate the values you want to embed in your organisational culture.

Building Lasting Success Through Safety

Strong safety cultures aren’t built overnight, but the investment pays dividends in business performance, employee satisfaction, and organisational resilience. As we mark the National Day of Action Against Bullying & Violence, remember that creating truly safe workplaces requires ongoing commitment from executive leadership.

The most successful leaders understand that psychological safety is an ongoing journey that requires constant attention and refinement. By prioritising people’s wellbeing, fostering open communication, and demonstrating genuine care for every team member, executive leadership can build organisations that not only survive challenges but emerge stronger from them.

Executive coaching can provide valuable support for leaders committed to building these cultures, offering guidance, accountability, and practical strategies for leading teams with both compassion and effectiveness.