The following is a conversation between Timothy Clark, Founder and CEO of LeaderFactor, and Denver Frederick, the Host of The Business of Giving.

Denver: If there was a guide, a playbook that showed you how you could build psychological safety in your organization, create an environment where your employees felt included, fully engaged, and were encouraged to contribute their best efforts and ideas, would you be interested in learning more about it?

Well, you’re about to from Dr. Timothy Clark, founder and CEO of LeaderFactor and the author of the bestselling book, The 4 Stages of Psychological Safety: Defining the Path to Inclusion and Innovation. Welcome to the Business of Giving, Tim.

Timothy Clark, founder and CEO of LeaderFactor

Timothy: Thanks, Denver. Good to be here with you.

Denver: You know, there has been so much talk about psychological safety in the last couple years. It’s really become a hot topic at the top of everyone’s culture list. Why don’t we begin by asking you to tell us what exactly is psychological safety?

Timothy: Well, it’s a good question, Denver. We could go back. So, really it came into circulation in 1954 with the noted psychologist, Carl Rogers. And what it really means in its essence is that you’re in an environment where you are rewarding my vulnerability, and I’m rewarding your vulnerability. So, it’s a culture where we reward vulnerability.

That’s really the core mechanism and the essence of the concept.

“So, what psychological safety does, and this is counterintuitive… a lot of people don’t understand this… psychological safety gives you the terms of engagement because psychological safety,… it’s a function of two things—number one, respect, and number two, permission. It lives at the intersection of respect and permission.”

Denver: When did it become an area of study in a formal sense?

Timothy: Well, it kind of laid dormant during the ‘50s and the ‘60s and the ‘70s, and then you have William Kahn from Boston University who kind of picks up the baton.

And then you have a number of other scholars, including Amy Edmondson at the Harvard Business School. And then, as most people have heard about, Google conducts its Project Aristotle back in 2013, 2014. They study 180 of their own teams to try to figure out why are some teams so great, performing so well, making all these breakthroughs, and other teams are not; yet all of the teams are filled with enormously talented and intelligent people.

So, what’s the difference? And they came away after two years of study, they landed on psychological safety as the number one factor. And so, I think at that point, Denver, that the world really began to take notice. That was the beginning of the explosion and demand. That’s the beginning. Now, here’s the interesting thing.

Before the pandemic, there was growing interest in the concept. And from a research standpoint, it was a burgeoning research literature. That’s fine. But since the concept, here’s what’s happened– it’s gone from interest in the concept to demand for the condition… Now, that’s a very different thing.

If you ask any Gen Z-er who’s entering the workforce today: What do you think about psychological safety? How do you feel about psychological safety? What are your expectations about psychological safety? They’re going to tell you, “Oh, it’s a term of employment. It’s table stakes. It’s non-negotiable. So, that’s where we are.

Denver: Yeah. Yeah. Well, that’s a great explanation to take us to this point. And it is funny how you get a tipping point like that, that it bubbles up. It’s under the surface; people like you who follow it, see it coming. But then, I don’t know, it’s about 25%, it seems like ,that it reaches that all of a sudden, it becomes ubiquitous, and it certainly has.

Well, as it has become ubiquitous, what are some of the misconceptions we have about psychological safety?

Timothy: There’s several, and I’ve written an article on this, by the way. There are misconceptions. Organizations will misinterpret and misapply it. For example, sometimes organizations and leaders and people think it’s a shield from accountability.

 “Oh, we’re doing psychological safety. That means that we don’t have to hold each other accountable. We have diplomatic immunity from accountability.” It doesn’t mean that at all. Another misconception is that it means being nice. Now, this is a very interesting one, Denver, and I wrote a Harvard Business Review article about this one.

“Nice” is a very problematic term, and especially in a nonprofit world, it can become toxic. What happens is: “nice” becomes kind of what I might call superficial collegiality. It’s the veneer of civility. So, we paint a thin layer of nice over a thick layer of fear. And in the nonprofit world, there’s a real susceptibility to develop toxic niceness because, in the nonprofit world, we begin with a benevolent mission.

We’re trying to do good in the world. It’s very easy when you start with a benevolent mission to create a culture that surrounds that mission that is nice because we’re all in the business of nice, so we start making nice with each other. But what happens is the nice is not real, right? So, it’s a charade. So, there’s two things that the organization has to do. The organization has to do execution, which is deliver value today; and the organization has to do innovation, which is to figure out how to deliver value tomorrow.

You can’t do those two things; those are both applied disciplines– execution, innovation– without being able to have hard-hitting dialogue. You need constructive dissent. You need creative abrasion. You need a high tolerance for candor. Everybody needs a license to disagree. These are the elements that you need. You need to be able to handle intellectual friction.

So, what psychological safety does, and this is counterintuitive… a lot of people don’t understand this… psychological safety gives you the terms of engagement, because psychological safety, let me just go back and define it, it’s a function of two things—number one, respect, and number two, permission.

It lives at the intersection of respect and permission. So, if you have high levels of both, you have the terms of engagement that allow you to have a hard-hitting dialogue, to really debate issues on their merits. But you can see how people move into the misconception so easily and think, “Oh, it means we’re going to be nice. Oh no, it doesn’t.” Do you see the misconception?

“Any kind of high-performing organization, accountability is the organizing principle. We have to hold each other accountable.   It’s based on accountability. Accountability is not antithetical to a healthy, productive, psychologically safe culture. It’s at the heart of it.”

Denver: Oh, my goodness. I’ve been around the misconception, I think, for 40 years and, I don’t think that enough people realize that you can be both caring and demanding at the same time. These are not mutually exclusive, but sometimes they’re treated as such.

Timothy: Here’s an example. So, for all the listeners, think about a person in your life that had a big impact on your life. Could be a teacher, neighbor, coach, friend, parent. Now, ask yourself this question: Were they kind? Did you have a good relationship with them? Chances are yes. Number two, did they hold you accountable?

Did they place demands on you? Did they challenge you? Did they push you? Did they stretch you? Yes, again, yes, yes. To your point, Denver, it’s not mutually exclusive. So, a healthy, vibrant, strong culture is a culture that’s characterized by respect and permission. So, accountability is at the core of any high-performing organization.

Any kind of high-performing organization, accountability is the organizing principle. We have to hold each other accountable. It’s based on accountability. Accountability is not antithetical to a healthy, productive, psychologically safe culture. It’s at the heart of it.

Denver: It sure is.

Yeah. You know, to your point, I think we can all go back and look at our sixth grade English teacher that we could not stand, almost despised, and can look back now and say, “Well, she’s the one who taught me how to write.” And we all have that in our lives.

Well, as the book states, there are four stages of psychological safety, and I’m going to ask you to run through them each. And why don’t we start with the first stage, which is that of “inclusion”.

Timothy: Right. So, this is based on empirical research, Denver, that I’ve been conducting for several years now: Stage one. So,if  I asked the question: Is there a pattern in the way psychological safety increases on a team or in a social collective of any kind?

And so, I found this pattern where psychological safety progresses very consistently through four successive stages. Stage one is” inclusion safety,” as you said. Inclusion safety means that you feel included; you feel accepted, and you have a sense of belonging. Now, why is that stage one? It’s stage one because in sequence, humans want to satisfy that need first before they go to other needs. In a global survey research, 92% of employees said: I want to be included, I want to be accepted, I want a sense of belonging. That’s the first need I want to satisfy. So, this becomes the foundation for human interaction in a healthy environment.

Stage one is inclusion safety, and then we’re going to build on that, but this is where we start.

Denver: Yeah. Talk a little bit about your experience. You grew up in southern Colorado among the Navajo. Tell us about that.

Timothy: I did, I did. I had an unusual childhood. My father was a teacher among the Navajo which, as many of you might know, is the second largest Native American tribe. And we experienced inclusion safety with them. They invited us into their community. They applied what I would call a worth test to us instead of a worthiness test.

Denver: Oh, I love that distinction.

Timothy: And so, what that means is they included us on the basis of our humanity. And they didn’t worry about the differences in human characteristics. Those became arbitrary distinctions. And so, that inclusion safety gave us a foundation to navigate and negotiate differences.

I mean, for example: Did we have significant differences between my family and the Navajo with regard to traditions, customs, morays?  Of course, everything, but the inclusion safety gave us that foundation and taught me at an early age what that was like.

“…you elevate humanity as the highest loyalty. We’re all members of the human family, so we elevate that as the highest loyalty. We subordinate human differences.”

Denver: What can we do to get better at inclusion? And I put this in the context: I was speaking to the CEO of the W.K. Kellogg Foundation the other day, and they became an anti-racist organization back in 2007, and they really have gotten a lot of diversity.

But as they look at the workplace, they call it the leaky bucket syndrome, where you’re bringing in a diverse workforce, but they’re escaping in two or three years. So, we’re not as good as inclusion. You know, we sometimes think of stage one. We’ve got a lot of work to do on stage one. What are some of the things that we can do?

Timothy: We have a lot of work to do. I guess, the first thing that I would say, Denver, is: let’s make a distinction between inclusion and diversity. They’re related but they’re not the same concept. Diversity is a matter of makeup and composition. It’s a matter of representation. Inclusion is a matter of intent and behavior.

And so, in many organizations, they’ve diversified the employee population, but they’re no more inclusive as a consequence because the diversity lies fallow; they haven’t activated it. The way that we activate diversity is with inclusion. That’s what unleashes and liberates the diversity, and that’s what puts it to use.

So, how do you do that?  In all of the work that we’ve done with organizations around the world, we’ve found that there’s really only one way, and that is that you elevate humanity as the highest loyalty. We’re all members of the human family, so we elevate that as the highest loyalty.

We subordinate human differences. When I say human differences, Denver, I’m referring to, for example, demographics– your demographic makeup, your psychographics, your cultural attributes. Are those things important? They’re incredibly important, but we subordinate them. They’re not more important than humanity.

If we turn that around, and we elevate human differences, but we subordinate humanity, we immediately begin to sow the seeds of division. So, this goes back to a crucial statement that Frederick Douglass made in 1867. He said, “I know of no rights of race.” What’s race? A human characteristic.

Is it important? Sure. But he said, “I know of no rights of race superior to the rights of humanity.” Take out race. Fill in the blank with any other human characteristic. What’s he saying? He’s articulating the governing principle of human interaction based on stage one, inclusion safety.

This is the way. There’s no other way to do it.

Denver: It’s a human right.

Timothy: It’s a human right.

Denver: It’s a human right. Second stage is “learner safety.” Tell us about that.

Timothy: “Learner safety” means that you can engage in the learning process, Denver, without fear of being embarrassed or marginalized or punished in some way.

So, that means that I can engage in acts of learning vulnerability. I can ask questions; I can give and receive feedback. I can say, “I don’t know.” I can make mistakes. And I’m going to be rewarded in that behavior, not punished. And what we’ve found based on the research is that learning in humans is both an intellectual and an emotional process.

The thinking brain and the feeling brain are connected, and they can’t be separated. And so, you can probably just reflect on your own life about people that nurtured stage two learner safety for you, and maybe those that didn’t, and the way that you reacted and responded in that environment is crucial. It’s absolutely crucial.

Denver: You know, let me ask you a question about hiring, and I’m going to go back to a word we discussed before… perhaps didn’t give it in a more of a pejorative way, but it’s the word “nice.”  And I remember I had the CEO of the American Red Cross on the show, and she said, “Look, when I hire somebody, I look for two things. I look for smart and I look for nice.”

As a matter of fact, I think she said the worst thing you could do is hire somebody who’s smart and not nice. And when I think of learner safety– and I’m using nice now with a good connotation to it– how much of it has to do with really just having people who are nice?

Because if you have decent people as opposed to jerks, let’s say, they’re not going to embarrass you when you fumble and you learn, you know. Is there a way that we can sort of deal with the psychological safety at the front door?

Timothy: I think that we can. Nice isn’t bad. It’s just ambiguous. Now, nice is going to be put to the test. Here’s the test. It’s easy to talk about nice things, but what about when we challenge the status quo; what about when we are dealing with very significant problems?

Then, nice gets put to the test. So, the question will be: Can you maintain your respect and your permission for other people when you’re challenged, when your point of view is challenged, when your authority is challenged, when your course of action is challenged? Can you handle that?

It’s easy to be nice about nice things. But let’s go into the arena, where we have to solve difficult problems where we may need to change direction, where maybe we’ve made mistakes; maybe we’ve exercised poor judgment. How do we handle it now in battle?

Denver: Yeah. Well, you’re saying what Mike Tyson always said, right? “Everybody has a plan until they get punched in the face,” and then something else takes over, and you don’t know what it’s going to be. The third stage is “contributor safety.”

Timothy: Right. So, let me go back. So, if stage two, learner safety, satisfies the basic human need to learn and grow and develop mastery; then the third stage, “contributor safety,”  satisfies the basic human need to make a meaningful contribution and to have an appropriate level of autonomy. So, humans, a basic need is to have autonomy and to be able to make a meaningful contribution.

So, stage three means that you’re given that ability; you’re given that opportunity to make a difference, to do meaningful work, to do something that matters and to have an appropriate level of autonomy to do it. So, if stage two, learner safety, is the stage of preparation, stage three, contributor safety, is the stage of performance.

So now, it’s go time. Now, we have to deliver the goods. Now, let me make one distinction here though, Denver. This is important. Stage one, inclusion safety, as you rightly pointed out, is a human right. It’s not something you earn. It’s something that you’re owed.

But by the time you get to stage three, contributor safety, we’re not talking about human rights anymore. You’ve entered the performance zone. You have to deliver the goods. Autonomy is never free. It has a price. So, we just have to be clear on that.

Denver: Is it a big jump between learner safety and contributor safety? You know, I look at a lot of organizations. I look at a lot of people who can learn, feel pretty comfortable about learning, but don’t feel that comfortable when they got to step up to the plate and make a contribution. Along this pathway where organizations get stuck, but that’s a big one, I think, for a lot of people that I know.

Timothy: It is. I think it depends on the person. I think it certainly depends on the culture, the tone that the leader is setting. Because the leader, the leader of any team has the biggest impact on the prevailing norms for that team.

And so, if that leader is consistently rewarding that contribution or those attempts at contribution, then I think, it draws people out over time, and they’re going to do that. But if they’re constantly second-guessed, if they are micromanaged, if the boss is a paternalistic figure, and is getting in the way, then that’s not going to happen.

Denver: Yeah, yeah. Well, look, we’ve started with inclusion. Now, I’ve learned, I’m actually speaking up, I’m contributing, but now I’m really speaking up– “challenger safety.”

Timothy: “Challenger safety”  is the culminating stage, stage four. Challenger safety means that you can challenge the status quo without fear of negative consequences. So, think about the repercussions, the reprisal that people fear. What do they fear when we’re talking about challenging the status quo? It’s a different type of vulnerability. What do people worry about?

They worry about their reputations. They worry about their standing. They worry about upward mobility. They worry about their career. And so, challenging the status quo is so vital, and yet people are so worried about it. Now, here’s the connection that we need to make. Stage four, challenger safety, is the place where we innovate.

Innovation, by its very nature, requires that we challenge the status quo. It requires that we disrupt the status quo. Innovation requires deviation. So, the last thing that we need is an echo chamber. We need people that are attacking the current regime, in good faith, of course. But its intellectual friction becomes our raw material.

This is where we solve difficult problems; we make breakthroughs; we innovate. So, stage four, challenger safety, is, as I said, the culminating stage. It’s not easy to get there. It’s not easy to stay there, but it is entirely possible. We house the world’s largest global normative database on psychological safety, and we see teams that nurture psychological safety to stage four, and they’re able to sustain that, and it’s incredible what they can do. It is very possible.

Denver: Tim, how can a leader promote intellectual friction and, at the same time, not have the ensuing social friction come along with that? And I’ve got to tell you, I don’t think I can do that in my own household around Thanksgiving, when we talk about politics. As a matter of fact, we don’t, because often it’s very hard to talk about something purely intellectual and not have your family members at each other’s throats.

Timothy: Well, it is. That’s the key. You’ve got to push the intellectual friction up and keep the social friction down. How do you do that? Well, it’s not easy, but think about the leader’s role. The leader has to bring superb emotional intelligence. Let go of your ego defense mechanisms and your pride of authorship.

Bring humility. Carry your opinions lightly; collaborate. Really draw people out. Reward their dissent. We don’t merely tolerate dissent. We invite dissent. We reward dissent. People have a license to disagree. We encourage them to use that license.

These are the patterns that the leader has to model because if we kind of summarize this, Denver, the central mechanism for creating and sustaining psychological safety is that you, on the one hand, you model acts of vulnerability yourself.

And then, number two, you reward the acts of vulnerability of others. That’s it. There’s no other way to get there. There’s no back door. There’s no workaround. There’s no shortcut. You have to model and then reward vulnerability. That’s the mechanism.

Denver: Yeah, it’s amazing, at least in some of the people that I’ve dealt with, their lack of self-awareness. I have worked with some CEOs who are really nice people, you know, good people, caring people. And they’re stunned to find out that their team does not feel psychologically safe.

I mean, in fact, they’re hurt. It’s like: “You got to be kidding me! I’m accessible. You know, tell everybody: Have a good day. I remember their birthday.. I do everything! How can it be?” How can it be? How can they be like that?  I guess, it’s a lack of self-awareness.

Timothy: It really is a lack of self-awareness, and leadership really begins on a foundation of self-awareness. And then, let’s take it a step further. Let’s talk about coachability. So, if you are a leader and you’re trying to understand, “Well, how do I go to the next level?  How do I get to the next place in my own development?”  Coachability is a function of A) self-awareness, which you just mentioned, but then B) willingness.

So, it’s those two things coming together. So, I’m self-aware, and I’m willing. But to get to self-awareness in the first place as you point out, Denver, is not something that you can do alone. You’re going to need some help. You’re going to need some feedback.

Denver: We got blind spots.

Timothy: We do have blind spots.

Denver: Yeah. You know, it’s funny that you say that because I think with a lot of leaders, they really have grown and developed through their careers, and they’ll tell you about it. But they all then think that they have arrived, that it’s done, that  “I’ve become this perfect person,” and they have to let go of that.

And I think also what they do is they hold on to who they are, and by holding on to who they are, they prevent themselves from growing any further. You know, I had one guy who basically was always at the front lines for the all-nighters with the team. And that was pretty much its brand. When we had to do an all-nighter, “I was in there, and I rolled up my sleeves with everybody else, and I’m that kind of leader.”  And you wanted to say, “Is that still serving you well?”  You know? But you’re afraid to let go because what will people think if I’m not there all night with the rest of the team?

Timothy: Well, I think this goes to the issue, Denver, of the great collision that’s happening in leadership today. And that collision is between what I would call the imperial model of leadership. The imperial model says: I’m the oracle. I’m the repository of answers. Come to me; I’ll give you the answer, dispatch you.

It’s the expert model, that imperial model: the more dynamic the environment in which you lead, the more antique and antiquated that model; you can’t keep up. It’s not possible. So, we’re moving; we’re transitioning to an inclusive and collaborative model. I think we’re seeing the collision of those two models, and it’s just very interesting as I talk to a lot of senior leaders across industries. Even many CEOs are now saying, “Tim, you know what? I’m just going to admit to you that I acknowledge even resentfully the need for psychological safety because I’m no match for this dynamic environment. I am no match.” No person is.

Denver: Right, right.

Timothy: Can’t do it.

Denver: No. As a matter of fact, I know that a lot of people who are doing some funding of new organizations in the nonprofit sector– they’re doing teams. They’re not doing individuals anymore. You can’t have somebody who can be a domain specialist and run an operation. You need a team.

And some others have said to me, Tim,  that as they realize they’re no match, it’s freeing; they’re relaxed. It’s like a burden off their back that I don’t have to have the answer to everything. I was wearing myself out. It’s quite, quite enjoyable.

How has psychological safety changed now that we’ve gone to this online world?  And how does a leader maybe need to alter their behavior to accommodate?

Timothy: Well, in a virtual world– or where we have hybrid configurations and the hybrid configuration is not going away– then what did we lose?

Well, we lost a component of our interaction and our culture. So, we have formal communication and interaction, and we have informal communication and interaction. If we go to a hybrid or a virtual setup as a team, we’ve lost a big portion of that informal communication and interaction.

How are we going to get that back? Answer is: you’re not going to get it all back, but you’ve got to learn to compensate for losing that by instituting different and new practices. I’ll give you an example. Frequent, brief touchpoints with your team members, calling a virtual water cooler at any point during the day.

But then it goes beyond that, Denver, because as we are interacting virtually, you have me from here up, so you have my facial expressions; you have some gestures; you have vocal characteristics, but you don’t have the full benefit of being face-to-face.

And so, with those limitations, I really have found that as we interact, we have to be more explicit in saying, “So, Denver, I’m not reading you completely. Tell me how you’re feeling. Tell me what you’re thinking.” We have to ask that of each other, if that makes sense.

Denver: No, it really does. You know, the thing that makes sense to me is the number of organizations who are now hybrid and remote and are trying to do whatever they can to replicate the in-office experience that we all hated, that we couldn’t stand, that we wanted to get away from, and had 32% engagement, and now we’re bending ourselves into pretzels to try to replicate it.

And you want to say, “No, no, no, no. Start with something brand new, just a brand-new idea.”

Timothy: It’s really true.

Denver: Yeah, really, it’s funny. It is. Finally, Tim, for those who are listening and read the book– and it’s just a master work, it really is– I enjoyed it so thoroughly, and I just love the way you set it up and you wrote it and the key concepts and things of that sort, it was just really entertaining, what would you have them do? They look at these four stages. They want to get started tomorrow. What would be your activation advice?

Timothy: Go back to the central mechanism, which is modeling and rewarding vulnerability. If you have a larger organization or a team, do a four-stages team survey and get a baseline so you know where you are.

Because as you said, you pointed this out, Denver, and it’s so true, so many leaders, they think their teams have high psychological safety, and they don’t. They don’t. So, they need an accurate measure, a baseline to understand where they’re starting their journey from. And then I would also suggest, go to and check out all of our free resources.

We have a behavioral guide that shows leaders and team members what they can do in each stage, very concrete. It identifies behaviors, as I said, in each stage… a lot of other resources to begin the journey and gain some traction, get some early momentum, and see the results.

Denver: It is a very rich website. What is it again?


Denver: The book is The 4 Stages of Psychological Safety: Defining the Path to Inclusion and Innovation. For those of us who are tasked with creating a healthy workplace culture, which would be just about everyone listening, this is the absolute place to start.

Thanks so much for being here today, Tim. It was a great pleasure to have you on the program.

Timothy: Good to be with you, Denver. Thank you.

Denver Frederick, Host of The Business of Giving serves as a Trusted Advisor and Executive Coach to Nonprofit Leaders. His Book, The Business of Giving: New Best Practices for Nonprofit and Philanthropic Leaders in an Uncertain World, is available now on Amazon and Barnes & Noble.

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