⚡️ Today’s level up ⚡️

Today’s edition focuses on a key factor missing in many sales environments – psychological safety. Using a recent poll I ran on LinkedIn, I break down the numbers and the impact a lack of psychological safety has on companies and individuals, and then I share key principles and tips for creating it for yourself (and others).

Let’s go!

Read time: <9 minutes

If you missed last week, read it here.

 

What is psychological safety?

Throughout my sales career I thrived the best in the environments where my leaders allowed me to make mistakes, but then taught me how to avoid those same mistakes a second time.

Not exactly rocket science, right?

But the more I read on LinkedIn or the more conversations I have with other revenue generators, the more I realize how apparent a lack of psychological safety there is. This is having a major impact, not only on the well-being of producers, but it’s drastically impacting the bottom line – for companies and individuals.

First, let’s define it: “Psychological safety is a belief that one will not be punished or humiliated for speaking up with ideas, questions, concerns, or mistakes.”

It’s a crucial component of a healthy work environment, where individuals feel comfortable expressing themselves without fear of negative consequences. This concept is vital in fostering open communication, innovation, and collaboration within organizations.

In Think Again by Adam Grant (one of my must-reads), he discusses the importance of rethinking old paradigms across three horizons:

– Individual rethinking

– Interpersonal rethinking

– Collective rethinking

Throughout the book, Grant shares powerful examples in the business world, with the main takeaway being companies that embrace a Learning Culture outperform those with a Performance Culture. At the heart of effective Learning Cultures? You guessed it…psychological safety.

To illustrate this point, let’s look at a prominent example of two companies on the two ends of this spectrum: Bridgewater Associates and Blackberry, which I’ll summarize below with the help of ChatGPT:

Bridgewater Associates

Bridgewater Associates, founded by Ray Dalio, is one of the world’s largest and most successful hedge funds. The company is renowned for its strong learning culture and emphasis on psychological safety. Dalio instilled a culture of “radical transparency” and “radical truth” within the organization. This means that employees are encouraged to openly share their ideas, question assumptions, and provide feedback, regardless of their position within the company.

– Radical Transparency: All meetings at Bridgewater are recorded and made available to all employees, ensuring that everyone has access to the same information and can learn from each other’s mistakes and successes.

– Radical Truth: Employees are encouraged to speak up and challenge each other’s ideas, fostering an environment where learning from mistakes is not only accepted but expected.

– Meritocratic Decision-Making: Decisions are made based on the best ideas, not the highest-ranking person’s opinion. This encourages employees to contribute their insights freely.

This approach has led to significant innovation and adaptation, allowing Bridgewater to remain highly competitive and successful in the finance industry. The firm’s open and reflective culture has contributed to its remarkable performance and growth.

Blackberry

In contrast, Grant highlights the example of Blackberry, which had a strong performance culture but lacked the elements of psychological safety and learning that Bridgewater exemplified.

Blackberry was once a dominant player in the smartphone market, known for its secure email services and physical keyboards. However, the company’s leadership was resistant to change and failed to adapt to the rapidly evolving market.

– Resistance to Change: Blackberry’s leadership was convinced of the superiority of their existing products and strategies, leading to a lack of innovation.

– Top-Down Decision Making: The company maintained a hierarchical structure where decisions were made by top executives without sufficient input from other employees.

– Fear of Speaking Up: Employees at Blackberry were less likely to voice concerns or suggest new ideas, fearing negative consequences.

This rigid approach ultimately led to Blackberry’s decline as competitors like Apple and Google introduced more innovative and user-friendly smartphones. Blackberry’s inability to rethink and adapt to the changing market dynamics resulted in a significant loss of market share and revenue.

By prioritizing learning, transparency, and open communication, Bridgewater has remained at the forefront of the hedge fund industry, consistently delivering strong performance and growth. The firm’s revenue and assets under management have steadily increased, showcasing the financial benefits of its culture.

Blackberry’s focus on maintaining the status quo and prioritizing performance over adaptation led to its downfall. Once a market leader, Blackberry saw its revenue plummet as it failed to innovate and compete with more agile companies.

The bottom line: Companies that focus solely on performance without fostering a culture of continuous learning and open communication risk stagnation and decline.

Is psychological safety affecting you?

Since psychological safety is a key factor to high-performing individuals, teams, and companies, I wanted to get a real-time pulse on this on LinkedIn.

Last Sunday, I ran a poll asking, “How secure do you feel in your current sales role?”

The poll received 1,536 votes across 7 days.

29%, which equates to 438 individuals, voted “very unstable.”

I had to act as my own research and analysis team, but I wanted to understand these numbers deeper and tie a revenue and commissions amount to those in this segment.

Here’s the 6-step (painstaking) process I ran through to dive deeper into these numbers:

1. Used the PhantomBuster Chrome extension to extract the poll results into a Google Sheet

2. Added key criteria I wanted to measure, like company, title, location, and time at current company

3. Used Magical to automagically pull these attributes into a new Google Sheet (I had to click on each individual LinkedIn profile to do so, which took quite a bit of time, but hope lemlist and Zapier could help me do this more automatically next time)

4. Scrubbed the list and removed any non-applicable titles (like Founder, CRO, Solutions Consultant, etc.) while also removing any SDR/BDRs and sales managers and leaders (so I could keep it focused to my core audience – the individual contributor in a more senior sales role)

5. Loaded the sheet into ChatGPT and asked it to analyze and create compelling graphs

6. Lastly, I assigned a conservative ARR quota ($1M ARR, considering most fall in Enterprise and Strategic) and a base commission amount (7%) for the clean list to determine a monetary amount for this segment

Here’s the breakdown by the numbers

438 dwindled down to 290 individuals after the cleanup. Here’s the distribution by job title:

Here is a breakdown of the top locations where these individuals are located:

Here is a breakdown on tenure at their current companies:

– Average Tenure: Approximately 21 months

– Least Tenured: 0 months

– Most Tenured: 117 months (9 years and 9 months)

Here were the companies showing up on the list more than once:

2X

– AWS

– Chili Piper

– Dataiku

– Deel

– Enable

– Gainsight

– Insight

– Microsoft

– MongoDB

– Qualtrics

– RingCentral

– ServiceNow

– Verkada

– ZoomInfo

3X

– Gartner

9X

– Salesforce

Next, let’s look at the revenue impact.

290 x $1M ARR quota equates to $290,000,000 of total collective company quota “at risk.” Let’s play out the following (best-case) scenarios for the companies if any of these were to occur:

– The seller is fired. If they were let go and a replacement were quickly identified this month, onboarded in July, ramped up August and September, and could successfully achieve 25% of that previous seller’s quota in this calendar year winning business Oct – Dec, this would pull in $250,000 of the original $1M ARR quota, plus anything the exiting seller closed. Under-performance.

– The seller leaves. Basically the same as above, but I would realistically shave off a month to this scenario, leaving the replacement with two months of producing revenue (which we know at the upper levels is highly unrealistic). The incoming seller is best-case pulling in 17% of the company’s original quota assigned at the beginning of the year. Under-performance.

– The team has to pick up the slack. Whether the seller stays or goes, leaders try to have the rest of the team make up for the under-performance. This adds unnecessary stress and resentment to an already stressed team. No long-term positive outlook here.

Lastly, let’s look at the impact on individuals’ commissions.

This is a hard one to dial in on considering the disparity of companies, roles, and locations, but let’s just use a conservative 7% against a $1M ARR annual quota. That averages out to $70,000, or the equivalent of a registered nurse’s salary in a major market. In all, it’s a whopping $20,300,000 in total commissions conservatively at risk with this group.

Rethinking psychological safety in sales

Let’s go back to Adam Grant and the work outlined in Think Again. Grant, who’s an organizational psychologist and a professor at Wharton, argues that the ability to think again is crucial for personal growth, innovation, and effective decision-making.

Here’s a detailed summary of the key concepts and insights from the book (in case you don’t have the time to read it, but recommend you do):

Introduction: The Importance of Rethinking

Grant begins by highlighting the significance of rethinking and the dangers of cognitive rigidity. He introduces the concept of “cognitive flexibility,” which is the ability to revise our beliefs and opinions based on new information and evidence.

Grant stresses that in a world that is constantly changing, clinging to outdated beliefs can be detrimental. This is a core tenet of Purposeful Performance that I preach with Make More Hustle Less Club members, which is to unsubscribe from rules designed by others, and instead, adopt your own using insights from your own performance.

Part 1: Individual Rethinking

1. Preacher, Prosecutor, Politician, and Scientist Modes

Grant identifies four mindsets we often adopt:

– Preacher: Defending sacred beliefs

– Prosecutor: Attacking others’ viewpoints

– Politician: Seeking approval from others

– Scientist: Searching for truth through evidence and experimentation

He argues that adopting the scientist mindset, characterized by curiosity and openness to new information (something I recommend you do daily as you wrap your workday), is essential for effective rethinking.

2. The Joy of Being Wrong

Embracing the possibility of being wrong is a crucial step in rethinking. Grant explains that acknowledging our mistakes and learning from them can lead to significant personal and professional growth. He emphasizes the importance of intellectual humility and the willingness to admit when we don’t know something.

3. The Power of Doubt

Doubt is often seen as a weakness, but Grant argues that it can be a strength. He suggests that questioning our assumptions and beliefs can lead to better decision-making and innovation. Grant introduces the concept of “confident humility,” which involves being confident in our ability to learn and grow while remaining humble about our knowledge.

Part 2: Interpersonal Rethinking

1. Argue Like You’re Right, Listen Like You’re Wrong

Effective communication involves not only defending our viewpoints but also being open to others’ perspectives. Grant discusses the importance of “perspective taking” and active listening. He suggests that by genuinely understanding others’ viewpoints, we can find common ground and improve our relationships.

2. The Art of Persuasion

Persuasion is more effective when we focus on common goals and values rather than simply trying to win an argument. Grant introduces techniques for persuasive communication, such as “motivational interviewing,” which involves asking open-ended questions and encouraging others to reflect on their beliefs.

3. Negotiating with an Open Mind

Successful negotiation requires flexibility and a willingness to rethink our positions. Grant provides strategies for effective negotiation, such as focusing on interests rather than positions and being open to creative solutions that satisfy both parties.

Part 3: Collective Rethinking

1. Build a Learning Culture

Organizations that foster a culture of learning and rethinking are more adaptable and innovative. Grant discusses the importance of psychological safety, where team members feel comfortable expressing their ideas and challenging the status quo. He provides examples of companies that have successfully built learning cultures, such as Pixar and Bridgewater Associates.

2. Learning from Failure

Failure can be a valuable source of learning if we are willing to analyze and reflect on it. Grant emphasizes the importance of creating an environment where failure is seen as an opportunity for growth rather than a source of shame. He introduces the concept of “pre-mortem,” where teams anticipate potential failures and plan accordingly.

3. Reinventing Organizational Practices

To stay competitive, organizations must continuously rethink their practices and strategies. Grant provides examples of companies that have successfully reinvented themselves, such as Nokia and Kodak. He argues that organizations should encourage experimentation and be willing to pivot based on new information and changing circumstances.

Key Takeaways

– Cognitive Flexibility: The ability to revise our beliefs and opinions based on new information is crucial for personal and professional growth.

– Intellectual Humility: Acknowledging our limitations and being open to learning from our mistakes can lead to better decision-making and innovation.

– Effective Communication: Understanding others’ perspectives and finding common ground can improve relationships and facilitate collaboration.

– Learning Culture: Organizations that foster a culture of learning and rethinking are more adaptable and innovative.

– Continuous Rethinking: Rethinking is a lifelong practice that involves remaining open to new information and perspectives.

Practical Applications

– Adopt a Scientist Mindset: Approach problems with curiosity and a willingness to experiment and learn from failure.

– Embrace Doubt: Question your assumptions and beliefs to improve decision-making and foster innovation.

– Promote Psychological Safety: If you are a leader, managing others, or working collaboratively with others, create an environment where team members feel comfortable expressing their ideas and challenging the status quo.

– Engage in Perspective Taking: Actively listen to others and consider their viewpoints to find common ground and improve communication.

– Encourage Experimentation: Foster a culture of experimentation and be willing to pivot based on new information and changing circumstances.

YOU MAY ALSO ENJOY READING: Ditch The Activity Game And Graduate To The Impact Game

That’s a wrap. See you next week!

 

 

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