By Matt Rampe, ASA, PCC, Rosenberg Associates
In today’s fast-changing environment with AI, private equity and the rise of remote workers, how is your firm keeping pace? In a staffing crisis with baby boomers retiring and generational differences surfacing, how is your firm winning the war for talent?
For many years, the playbook has been to do what we’re good at, but what worked in the past will not work in the future.
How can a firm keep up? The solution lies in an obscure academic concept: psychological safety.
In 2012, Google set out to determine once and for all what makes for the highest-performing team. To answer this question, they conducted extensive research. Over two years, they collected more than 200 employee interviews and scoured over 250 attributes of more than 180 teams at Google.
Their findings?
There is one factor matters more than any other in determining high performance: psychological safety.
Psychological safety is a mouthful of a term coined by Harvard professor Amy Edmondson. Essentially, it means:
- All voices are heard.
- People feel safe taking (appropriate) interpersonal risks.
What does that have to do with CPA firms, the rate of change and effective teams? Everything.
In a CPA firm, when teams are psychologically unsafe, the following happens:
- Innovation is shot down because non-standard ideas are criticized, and people are penalized for failing.
- An echo chamber is created, signaling to people not to stand out and not to be different.
- Diversity is not encouraged in reality (although it may be on paper).
This creates rigidity, slows innovation, and stifles learning.
When teams have strong psychological safety, the following happens:
- Differences in ideas are welcomed, and rapid learning and better decisions result.
- Technology and process innovation is ongoing as appropriate and necessary failures are embraced.
- Diversity is sought out in all forms and celebrated.
How can your team build more psychological safety?
- Show that you understand what your teammate said instead of criticizing it or restating your point of view more loudly.
- Don’t blame people for taking appropriate interpersonal risks or failing; embrace this as part of building openness and learning as a team.
- Ask for diverse opinions, then make decisions informed by them all.
What does it look like in practice?
I did strategic planning with a CPA firm whose partners had very different desires for the future. We spent a lot of time understanding each partner. We realized that for the retiring partners to be successfully bought out, the newer partners would have to step up and grow the firm, but they would only want to do so if they could maintain their preferred work-life balance. They were able to strike a deal that resulted in balanced growth and worked for everyone.
This is a microcosm of the conversations happening at firms all over the country right now. Tension between remote workers, tech proponents and private equity investors with the traditional operating model of CPA firms is mandating more honest conversations to understand and adapt rapidly.
Learning is the only sustainable competitive advantage in a time of change.
Mastering psychology safety is the key to learning as a team.
Put it into practice
To measure your team’s current level of psychology safety, use these questions.
Matt Rampe, ASA, PCC, is a partner at Rosenberg Associates who specializes in consulting for CPA firms in strategic planning and practice management.
