The Fearless Organization: Creating Psychological Safety in the Workplace for Learning, Innovation, and Growth

Amy C. Edmondson

Book | 2018

The Fearless Organization: Creating Psychological Safety in the Workplace for Learning, Innovation, and Growth

Abstract

The Fearless Organization: Creating Psychological Safety in the Workplace for Learning, Innovation, and Growth offers practical guidance for teams and organizations who are serious about success in the modern economy. With so much riding on innovation, creativity, and spark, it is essential to attract and retain quality talent—but what good does this talent do if no one is able to speak their mind? The traditional culture of “fitting in” and “going along” spells doom in the knowledge economy. Success requires a continuous influx of new ideas, new challenges, and critical thought, and the interpersonal climate must not suppress, silence, ridicule or intimidate. Not every idea is good, and yes there are stupid questions, and yes dissent can slow things down, but talking through these things is an essential part of the creative process. People must be allowed to voice half-finished thoughts, ask questions from left field, and brainstorm out loud; it creates a culture in which a minor flub or momentary lapse is no big deal, and where actual mistakes are owned and corrected, and where the next left-field idea could be the next big thing. This book explores this culture of psychological safety, and provides a blueprint for bringing it to life. The road is sometimes bumpy, but succinct and informative scenario-based explanations provide a clear path forward to constant learning and healthy innovation.

Keywords: psychological safety; knowledge economy; teaming; Management; Organizational Culture; Innovation and Management; Learning;

Format: Print

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Citation:

Edmondson, Amy C. The Fearless Organization: Creating Psychological Safety in the Workplace for Learning, Innovation, and Growth. Hoboken, NJ: John Wiley & Sons, 2018.

Case | HBS Case Collection | December 2018

Corporate Transformation at Merck KGaA, Darmstadt, Germany

Joseph B. Fuller, Amy C. Edmondson, Daniela Beyersdorfer and Tonia Labruyere

When Stefan Oschmann became CEO and Chairman of the Executive Board of Merck KGaA, Darmstadt, Germany, in 2016, the company had started its transformation from a mid-tier traditional German industry player to a global modern science and technology player. The restructuring and portfolio overhaul led by Oschmann’s predecessor Karl-Ludwig Kley since 2007 had been approved by the Merck founding family in its 13th generation, which still owned the majority of the shares. Its intermediate results had been encouraging. After three large acquisitions (Serono, Millipore, and Sigma-Aldrich) that broadened its reach from healthcare and pharmaceuticals into life sciences and performance materials and an internal optimization program, revenues and profitability had doubled in the decade leading up to 2016. But more needed to be done. Preparing for the company’s 350-year anniversary in 2018, Oschmann had kept up the pace of change, and announced further divestments and restructurings, sparking reactions from employees who expressed increasing exasperation about the new measures. In the fall of 2017 Oschmann and his Executive Board had to decide on the best strategic option for the company’s consumer health division. Should they divest a division that lacked scale but that with its consumer brands in pain and cold remedies was viewed as a symbol of the company’s origins? Was more change too much change in such a short time?

Keywords: Corporate governance with Family Ownership; Transformation; Change Management; Restructuring; Corporate Governance;

Citation:

Fuller, Joseph B., Amy C. Edmondson, Daniela Beyersdorfer, and Tonia Labruyere. "Corporate Transformation at Merck KGaA, Darmstadt, Germany." Harvard Business School Case 319-072, December 2018. View Details

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This paper complements the manager-centered analysis of dynamic capabilities with a team-based approach focused on team learning. We argue that team learning capabilities intertwine with managerial cognitive capabilities to support the processes of sensing, seizing, and reconfiguring. We draw from the literature on team learning to develop four categories based on the orientation (exploration/exploitation) and locus (internal/external) of learning in teams: reflexive, experimental, contextual, and vicarious learning. We integrate these categories into the dynamic capabilities framework to show their particular relevance at different points along the sensing-seizing-reconfiguring pathway and assess their potential impact on innovation and strategic change. The framework contributes by adding a meso lens to research on dynamic capabilities to help scholars better understand how learning that occurs in teams may support entrepreneurial managers in enacting their cognitive capabilities in service of sustained innovation and superior firm performance.

Cross-boundary teaming, within and across organizations, is an increasingly popular strategy for innovation. Knowledge diversity is seen to expand the range of views and ideas that teams can draw upon to innovate. Yet, case studies reveal that teaming across knowledge boundaries can be difficult in practice, and innovation is not always realized. Two streams of research are particularly relevant for understanding the challenges inherent in cross-boundary teaming: research on team effectiveness and research on knowledge in organizations. They offer complementary insights: the former stream focuses on group dynamics and measures team inputs, processes, emergent states, and outcomes, while the latter closely investigates dialog and objects in recurrent social practices. Drawing from both streams, this paper seeks to shed light on the complexity of cross-boundary teaming, while highlighting factors that may enhance its effectiveness. We develop an integrative model to provide greater explanatory power than previous approaches to assess cross-boundary teaming efforts and their innovation performance.

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The Fearless Organization: Creating Psychological Safety in the Workplace for Learning, Innovation, and Growth

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