Hi All,
Here’s my daily newsletter navigating the crossroads of business, growth, and life.
If you love this content (please share it), but also…
Start here > https://newsletter.scottdclary.com
Check out my Podcast, connect with me on YouTube / Twitter, and read my Weekly newsletter.
Sponsor: FreshBooks
The numbers speak for themselves - over 30 million people have chosen FreshBooks, processing more than $60 billion in invoices and saving an incredible 192 hours annually on accounting tasks. As an all-in-one accounting solution, FreshBooks helps entrepreneurs and freelancers create professional estimates, track time, automatically bill clients, and capture expenses on the go - all while integrating seamlessly with over 100 business tools and providing award-winning customer service.
Ready to stop drowning in receipts and chasing payments? Start your 30-day free trial at freshbooks.com - no credit card required.
Plus, if you act before January 7th, get an exclusive Success Story listener offer of 75% off your first three months at freshbooks.com/pricing-offer.
Transform Your Business with FreshBooks
The Truth About Psychological Safety
Something's wrong with your team.
You can feel it, even if you can't quite put your finger on it. The meetings are pleasant. Everyone gets along. There's hardly ever any conflict. And that's exactly the problem.
You've created what most people would call a "psychologically safe" environment. A place where everyone feels comfortable. Where voices stay measured, conflicts get smoothed over, and challenging conversations are handled with kid gloves.
But let me tell you something that might hurt.
That's not psychological safety. That's psychological suppression wearing a friendly mask.
The term "psychological safety" has become one of those corporate buzzwords that's been stripped of its power. Like "synergy" or "innovation," it's been reduced to a checkbox on some HR consultant's assessment form.
Here's what most leaders miss: True psychological safety isn't about making people comfortable. It's about making it safe for them to be uncomfortable.
Think about it like training for a marathon.
A "safe" training program isn't one where you never push yourself to the point of discomfort. That kind of safety would ensure you never make it past the starting line. Real safety in training means having the right foundation, support, and environment to push your limits without breaking.
The same principle applies to your team.
When Google conducted their famous Project Aristotle study on team effectiveness, they found something counterintuitive. The highest-performing teams weren't characterized by their harmony. They were characterized by their ability to engage in productive conflict without fear of retaliation.
But here's where it gets interesting.
Most leaders hear "psychological safety" and immediately start implementing policies that actually make their teams weaker:
They start prefacing feedback with so many qualifiers that the message gets lost
They avoid giving difficult feedback altogether because it might make someone "feel unsafe"
They celebrate agreement over innovation
They mistake silence for harmony
The result? Teams that are really good at being really mediocre.
You see this pattern everywhere if you know what to look for. Companies where meetings run smoothly because nobody dares to ask the hard questions. Where projects move forward unchallenged until they inevitably crash into reality. Where "team players" are the ones who never rock the boat, even when the boat is headed straight for an iceberg.
And the most dangerous part? Most leaders are proud of this.
They point to their lack of conflict as proof of good leadership. They celebrate their team's ability to "get along" as if that's the ultimate measure of success.
But here's the brutal truth: If your team never disagrees with you, if they never challenge your assumptions, if they never push back against your ideas, you don't have psychological safety.
You have compliance.
And in today's market, compliance is a death sentence.
Because while you're celebrating your team's ability to avoid conflict, your competitors with real psychological safety are:
Finding problems faster because their teams aren't afraid to look for them
Innovating more quickly because ideas get challenged and refined in real-time
Attracting and keeping the best talent because ambitious people want to work where their voice matters
The real tragedy? Most businesses don't realize they have this problem until it's too late.
They mistake their team's silence for agreement. Their lack of conflict for alignment. Their comfort for safety.
And by the time they realize their mistake, their most talented people have left for places where they can speak their minds, their market position has been eroded by more innovative competitors, and their culture of "safety" has become their biggest liability.
Want to know if you really have psychological safety? Ask yourself this:
When was the last time someone on your team fundamentally challenged one of your core assumptions about your business? When was the last time a junior employee felt confident enough to tell you that your strategy was wrong? When was the last time a meeting got uncomfortably real because someone cared enough to speak up?
If you can't remember, you don't have psychological safety. You have a problem.
The Death of Innovation
Ever notice how your team's best ideas seem to come from hallway conversations after meetings, rather than the meetings themselves?
That's not a coincidence.
It's a symptom of innovation dying in plain sight.
I've watched this happen in companies of every size. The pattern is always the same: Ideas don't die because they're bad. They die because they never get spoken aloud in the first place.
Here's what kills innovation: The gap between what people know and what they're willing to say.
Think about your last major project failure. Now think about how many people on your team saw it coming but didn't speak up. If you're being honest with yourself, the number is probably higher than zero.
The real cost isn't just in the failed project. It's in all the energy your team spent tiptoeing around obvious problems instead of solving them. It's in the talent you'll never attract because word gets around about companies where truth-telling isn't welcome.
But here's what makes this particularly dangerous: It happens slowly, then all at once.
First, someone brings up a concern in a meeting and gets shut down. Maybe not directly – maybe it's just a subtle eye roll, or being talked over, or having their point "noted" and immediately forgotten.
They learn.
Next time, they keep that concern to themselves. Or maybe they share it only in safe spaces – private Slack messages, after-work drinks, hallway whispers.
Others watch. They learn too.
Soon, you've got what looks like a perfectly functioning team. No conflicts. No uncomfortable disagreements. No challenging questions.
What you actually have is an innovation graveyard.
Because here's what nobody tells you about innovation: It's born from friction. From the collision of different perspectives. From the uncomfortable space between "this is how we've always done it" and "what if we tried something else?"
Look at any truly innovative company:
SpaceX didn't get to reusable rockets by having polite meetings where everyone agreed with Elon Musk. They got there through brutal honesty about what wasn't working.
Pixar doesn't create masterpieces by nodding along with the first draft. They have a culture where every movie starts terrible, and it's everyone's job to point out why.
The common thread? These companies make it safer to speak up than to stay silent.
But most companies do the opposite. They create environments where:
Raising concerns is labeled as "being negative"
Challenging ideas is seen as "not being a team player"
Questions are treated as challenges to authority
Silence is rewarded with promotions
And then these same companies wonder why they can't innovate like the tech giants.
Here's what they're missing: Innovation isn't just about good ideas. It's about creating an environment where bad ideas can be killed quickly and good ideas can be challenged until they're great.
The irony? The teams that feel most comfortable are often the ones in the most danger.
Because while they're avoiding conflict in the name of harmony, their competitors are:
Having the hard conversations early, when problems are still small
Testing assumptions before they become expensive mistakes
Building solutions that work instead of solutions that just make everyone feel good
The cost of this false harmony isn't just measured in failed projects or missed opportunities. It's measured in:
The talent that leaves because they're tired of watching good ideas die in silence
The market share that erodes because customers' problems don't care about your team's comfort
The innovation debt that accumulates when easy conversations replace necessary ones
But here's the thing about innovation death: It's reversible. Not easily, and not without discomfort, but it's possible.
The Danger Zone
Let me tell you about the most dangerous meeting I've ever witnessed.
It wasn't the one where voices were raised. It wasn't the one where a project got killed. It wasn't even the one where someone got fired.
It was a perfectly pleasant strategy meeting where everyone nodded along with a plan they knew would fail.
That's the real danger zone: The space between what your team knows and what they're willing to say.
You're probably sitting in this danger zone right now. But like carbon monoxide, it's odorless and invisible until it's too late.
Here's what it looks like:
Your meetings run smoothly. Too smoothly. The same few people speak while everyone else takes notes. When you ask for feedback, you get half-hearted nods or safe suggestions about minor details.
But the real conversation happens after the meeting.
In Slack channels. In private messages. In hallway conversations where people finally say what they actually think. The truth exists in your organization – it just never makes it to the places where decisions get made.
Think about your last few team meetings. If you're seeing any of these signs, you're deeper in the danger zone than you think:
Your "open door policy" mostly collects cobwebs
The same three people do 90% of the talking
Decisions get quietly undermined rather than openly challenged
Projects proceed smoothly until they suddenly, "unexpectedly" fail
Your team has mastered the art of malicious compliance
But here's what makes this truly dangerous: It feels like success.
After all, isn't this what good management looks like? A team that executes without complaint? Meetings that run on schedule? Everyone getting along?
No. That's what slow death looks like.
Because while you're mistaking silence for agreement, three things are happening:
First, your best people are planning their exit.
They're not leaving because they're unhappy. They're leaving because they're good enough to know the difference between real alignment and fake harmony. They can see the icebergs your ship is heading for, and they're tired of having their warnings ignored.
Second, your blind spots are getting bigger.
Every unspoken concern, every swallowed suggestion, every bit of feedback that dies in a Slack channel instead of making it to a decision-maker – these are all corners of your business you can't see. And in business, what you can't see will eventually kill you.
Third, you're training your team in exactly the wrong behaviors.
Every time someone stays quiet in a meeting and things go "fine," you're teaching your entire organization that silence is safer than honesty. Every time someone raises a concern and gets labeled as "negative," you're teaching everyone else to keep their concerns to themselves.
The real kicker? The more successful you've been, the more dangerous this becomes.
Because success breeds complacency. It makes it easier to dismiss concerns as negativity. It makes it more tempting to protect what's working than to question if it could work better.
Microsoft fell into this trap in the 2000s. They were so successful that questioning the status quo became seen as a form of corporate treason. We all know how that worked out – they missed mobile, missed search, missed social, missed cloud (until Satya Nadella turned things around).
But you don't have to be Microsoft to fall into this trap. I see it happening in companies of every size:
Startups where the founder's vision has become unquestionable
Mid-size companies where middle managers filter out bad news before it reaches the top
Large organizations where entire departments exist in bubbles of false consensus
The most painful part? The solutions are often already in your building. They're just trapped in the minds of people who've learned that speaking up isn't worth the risk.
But there's a way out of the danger zone. A way to turn this around before it's too late.
The Safety-Discomfort Matrix
If you've read this far, you probably recognize some uncomfortable truths about your team.
But recognizing the problem isn't enough. You need a framework for fixing it.
Here's what most leaders get wrong: They try to solve this linearly. They think psychological safety is a spectrum, with "unsafe" on one end and "safe" on the other.
That's not how it works.
Real psychological safety exists on two axes: The level of safety people feel, and the level of discomfort they're willing to engage with.
Think about learning to swim.
A good swim instructor doesn't just throw you in the deep end (high discomfort, low safety). But they also don't let you splash around in the kiddie pool forever (high safety, low discomfort).
They create an environment where you feel secure enough to push your limits. Where the water gets deeper, but your confidence grows faster.
Your team needs the same kind of environment.
Here's what the matrix looks like in practice:
Low Safety, Low Discomfort: The Zombie Zone
Everyone plays it safe
Innovation is dead
Your best people are updating their resumes
Problems fester until they explode
Low Safety, High Discomfort: The Fear Zone
People are challenged but terrified
Burnout is rampant
Communication is defensive
Trust is non-existent
High Safety, Low Discomfort: The Comfort Trap
Everyone's "happy" but nothing improves
Mediocrity becomes acceptable
Problems get sugar-coated
Growth is impossible
High Safety, High Discomfort: The Growth Zone
Hard conversations happen early and often
Innovation thrives
Problems get solved, not hidden
The best people stay and grow
The goal isn't to eliminate discomfort. It's to make discomfort safe.
But here's what makes this tricky: You can't move directly from where you are to the Growth Zone. You have to build the safety first, then gradually increase the discomfort.
Let me break this down into something actionable.
Phase 1: Building Base Safety
Respond to bad news with curiosity, not punishment
Acknowledge and reward early warning signs
Make your own mistakes visible
Create clear boundaries between performance issues and psychological safety
The key here is consistency. One bad reaction can undo months of good work.
Phase 2: Introducing Productive Discomfort
Start asking harder questions
Challenge assumptions openly
Encourage disagreement, especially with authority
Make silence more uncomfortable than speaking up
Phase 3: Scaling the Challenge
Set increasingly ambitious goals
Expand the scope of what's discussable
Push for faster feedback loops
Make conflict normal, not exceptional
But here's what nobody talks about: This isn't a one-time process. It's a constant balancing act.
Because the reality is, psychological safety isn't a destination. It's a dynamic state that requires constant attention.
Markets change. Teams evolve. New challenges emerge. What felt safe yesterday might feel dangerous tomorrow.
The key is to watch for the signals:
Are people bringing you problems earlier?
Is disagreement becoming more specific and constructive?
Are decisions getting better because they're being challenged more effectively?
Is your team's energy going toward solving problems instead of avoiding them?
These are the metrics that matter. Not how comfortable everyone feels, but how effectively they can handle discomfort.
Because here's the truth about business in 2025: The market doesn't care about your team's comfort level. Your competitors don't care about your careful, gradual approach to feedback.
The world is moving too fast for comfort to be your priority.
The only sustainable advantage is your team's ability to identify and solve problems faster than your competition. And that only happens when people feel secure enough to engage with discomfort.
But making this real requires more than just understanding the matrix. It requires specific leadership behaviors that most of us have to unlearn and relearn.
The Leader's Role
Let's talk about why your "open door policy" isn't working.
Having an open door doesn't matter if people don't feel safe walking through it. And right now, your door might be open, but your mind probably isn't.
The hard truth? Most leaders are the biggest obstacle to psychological safety in their own organizations.
Not because they're bad leaders. Not because they don't care. But because they've never learned how to make it safer for people to challenge them than to agree with them.
Think about your reactions in meetings.
When someone challenges your idea, what's your first response? If you're like most leaders, you immediately go into defense mode. You explain why they're wrong. You point out what they've missed. You assert your authority.
And in that moment, you've just taught your entire team that challenging you isn't worth the risk.
Here's what real leadership looks like in a psychologically safe environment:
When Someone Challenges Your Idea: Instead of defending, get curious. Ask questions. Dig deeper. The more senior you are, the more important this becomes.
When Bad News Arrives: Your reaction to bad news is more important than your reaction to good news. Because everyone's watching to see if it's really safe to bring problems to your attention.
The first person to bring you bad news should be treated like they just saved your company money. Because they did.
When Silence Falls: Silence in meetings isn't neutral. It's usually fear wearing a mask. Start asking the quiet ones what they think. Not once, not twice, but until it becomes normal for them to speak up.
But here's what makes this truly challenging:
You have to maintain high standards while making it safe to fall short of them. You have to be demanding without being threatening. You have to make it clear that while failure is acceptable, silence about potential failure isn't.
Let me break this down into specific behaviors you need to start and stop:
Start Doing:
Reward the messenger, especially when the message hurts
Make your own mistakes visible and discussable
Ask questions instead of making statements
Create artificial deadlines for dissent
The key is to make these behaviors so consistent that they become predictable.
Stop Doing:
Shooting down ideas before they're fully formed
Using your authority to end discussions
Allowing your mood to dictate your responses
Letting your ego drive your reactions
But here's what nobody tells you about leading for psychological safety:
It's exhausting.
Because you have to be more consistent than your team's fear. You have to overcome not just their current hesitation, but all their past experiences with leaders who punished honesty.
And you have to do this while:
Meeting business objectives
Managing performance issues
Dealing with your own stress and uncertainty
Navigating market pressures
The trick isn't to be perfect. It's to be predictable.
Your team needs to know that even on your worst day, even when you're stressed and overwhelmed, you'll still:
Listen before defending
Question before deciding
Acknowledge before solving
Because psychological safety isn't built in big moments. It's built in small, consistent interactions that slowly prove it's safe to be honest.
Think of it like compound interest. Each small interaction either adds to or subtracts from your team's psychological safety. And like compound interest, the real gains come from consistent deposits over time.
The Future of Work
Let me tell you why everything we've discussed matters more now than ever before.
We're entering an era where AI is reshaping entire industries overnight. Where business models that worked for decades can become obsolete in months. Where the only constant is the increasing speed of change.
And here's what nobody's talking about: AI won't replace humans. It will replace humans who can't speak up.
Think about it.
AI is incredibly good at following established patterns. At executing known processes. At doing things the way they've always been done.
You know what it's terrible at? Questioning assumptions. Spotting unspoken problems. Challenging the status quo.
In other words, AI is really good at doing exactly what your psychologically unsafe team is doing right now.
This creates a fascinating paradox:
The more automated and AI-driven our world becomes, the more valuable genuine human insight becomes. The more crucial it is to have people who can:
Question the output of AI systems
Spot the problems that data doesn't show
Challenge assumptions that algorithms can't see
But here's the kicker: Most organizations are accidentally training their people to behave more like machines.
They're creating environments where:
Following the process matters more than questioning it
Agreeing is safer than challenging
Predictability is valued over insight
This is a recipe for irrelevance.
Because in the AI era, your competitive advantage won't come from doing things faster or more efficiently. AI will win that race every time.
Your advantage will come from:
Seeing problems before they show up in the data
Spotting opportunities that algorithms miss
Building things that nobody's thought to build yet
And none of that happens without psychological safety.
So here's where this leaves you:
You can keep running your team the way you have been. Keep celebrating the harmony of unspoken disagreement. Keep mistaking silence for alignment.
And watch as your organization slowly becomes exactly the kind of predictable, process-focused operation that AI will replace.
Or you can do something different.
You can build an environment where:
Human insight thrives
Challenging assumptions is normal
Problems get solved before they show up in the data
Innovation comes from anywhere
The tools and frameworks are in this newsletter.
The choice is yours.
But remember:
The future isn't coming. It's here.
And it belongs to organizations where humans feel safe enough to be human.
– Scott