128 – The Environment You Create Impacts The Candour In Your Business

Somebody on your leadership team knows something you need to know. They have known it for three weeks. They rehearsed how they would say it, chose the meeting where they would say it, then watched that meeting run twelve minutes over and decided today was not the day. You will hear about it in the quarter it becomes expensive.

Here is the part most leaders resist. That person is not lacking courage, and they have not failed a cultural test that a training course would have helped them pass. They read the environment you built, they read it accurately, and they responded correctly. Silence was the rational choice.

The Word In That Sentence Everybody Reads Past

This week’s episode of Impactful Teamwork started with a line from the Leadership Development Group. Leadership isn’t about having all the answers. It’s about creating an environment where your team isn’t afraid to bring you the problems.

Everybody nods at the first sentence, because the first sentence costs you nothing. The weight sits in the second one, and specifically in a word we read straight past. The word is creating. Not encouraging, not permitting, not inviting. Creating is a design activity, which means the environment is something you are building whether or not you meant to build it.

We have spent a decade selling psychological safety as something you can purchase, schedule and tick off. It is not a programme. It is a reading your people take of the conditions they are standing in, and they take it continuously and considerably faster than you take yours.

The Ward With The Clean Error Log Was The Dangerous One

There is a piece of thinking from 1936 that has never been improved upon. Kurt Lewin wrote it as an equation: behaviour is a function of the person and their environment. Two variables, and most organisations only ever interrogate one. We assess the person, appraise them, and occasionally replace them. We rarely ask what the environment was rewarding.

Amy Edmondson, the Harvard professor who did more than anyone to define psychological safety, arrived at the idea by getting an answer she did not want. She went into two hospitals expecting to find that better nursing teams made fewer medication errors. The data showed her the opposite, because the better teams appeared to have higher error rates.

What she eventually understood is that those teams were not making more mistakes. They were reporting more of them. Admitting an error was survivable, so errors surfaced early enough to be corrected before they reached a patient.

The unit with the clean error log was the dangerous one. Its data was evidence of suppression rather than performance. When a function in your business reports no problems for three consecutive months, most leaders feel quietly reassured. The correct response is curiosity, because you are either looking at an exceptional operation or at an environment where nobody has calculated that telling you is worth it.

Nokia Did Not Lack Engineers. It Lacked A Route For Bad News.

Timo Vuori and Quy Huy published the best evidence I know of in Administrative Science Quarterly in 2016, examining how Nokia lost the smartphone battle between 2005 and 2010.

They found that fear was distributed unevenly, and that the unevenness was the mechanism. Top managers feared competitors and shareholders. Middle managers feared their own superiors and peers. So the senior team applied enormous pressure without disclosing the external threat driving it, and the middle managers, reading the environment accurately, withheld the information that would have made them a target.

Senior leadership ended up with an over-optimistic assessment of their own technological capability and invested on the basis of it. Nobody in that story was incompetent. Everybody was rational. The distance between what your organisation knows and what your board hears is a valuation issue.

The Horse Is Not Responding To Your Behaviour

My colleague Jane Hemingway-Mohr, who also works with horses in leadership development, wrote something recently that I have not been able to put down. Horses do not hide the bad news. They do not worry about hierarchy, protect our ego, or wait for a more convenient moment. There is no blame in the response and no judgement. Just information.

Fifteen years of watching this in a field has added one thing to her observation. The horse is not responding to your behaviour. It is responding to the environment that you are.

My mare Bracken teaches boundaries by barging into people. Walk up to her without having decided what you want and she will occupy your space. No amount of firm body language afterwards will correct it. She is reading the absence of a decision, and she reads it before you arrive. Your senior team does the same thing, only slower and more expensively.

Three Things To Change This Week

  1. Watch the three seconds after bad news rather than the sentence you say next. You will say the right thing. Your face may have already said something else.
  2. Close the loop publicly on one problem raised with you last quarter, including the reasoning if the answer is no. If information goes up and nothing comes back down, people stop bothering.
  3. Name the last person who told you something you did not want to hear, and ask whether they were better or worse off for it. Everybody else already knows the answer.

Listen To The Full Episode

So here is my challenge. Think about the last time somebody brought you a problem. Not what you said, because I am confident you said the right thing. What did they experience from you in the three seconds before you said it, and what did that teach everybody else in the room about whether it is safe to come to you next time?

Listen to the full episode of Impactful Teamwork for the four things your environment is actually made of, what happened when a chief executive walked away from a horse in front of his own leadership team, and the phrase that team still uses on him months later.

Show Notes

00:46 Why Leaders Miss Bad News

02:03 Rethinking Psychological Safety

03:05 Leadership Quote And Environment

05:38 How Reactions Shape Silence

07:34 Behavior And Environment Research

08:47 Amy Edmondson Error Reporting

11:26 Horses Tell The Truth

12:53 Horse Lessons For Teams

15:46 Nokia Fear And Failure

18:51 Four Environment Components

22:14 Cultural Zones And Modes

23:41 Steve Cafe Moment Story

25:16 Weekly Challenge Reflection

26:17 Wrap Up And Next Steps