There’s been mixed reactions to Eric Yuan’s announcement (CEO of Zoom), he’ll be taking a 98% salary cut, to just $10,000 this year.

Some have been cynical, others supportive.

Google, the organisation which popularised psychological safety, is also going through the current IT ‘bust cycle’ and has team members asking how “safe it is really to speak up now?”

Fair question. Psychological Safety, like trust, is a delicate creature. It’s also highly contextual.

When it comes to Psychological Safety, there are 2 critical factors

When it comes to Psychological Safety, it’s important to consider the two factors of topic and travel.

Let me explain. With one leader in the room, it might be ‘safe’ for me to speak up about the topic of a leadership decision, be it budget cuts, marketing spend, key priorities etc...

• But how far can I travel on it?

  • Ie, at what point is it no longer safe, for me to speak my true thoughts about the finer elements of that particular decision?
    
    

At what point will I be penalised, when I speak up about a particular decision, spend or priority?

• It’s a judgement call, and one you can make more accurately when there is trust and transparency in the room.

All of us make these daily judgements, mostly unconsciously, based on the most senior person’s views in the room - and how much latitude* (ie. travel) they give us on that topic specifically.

The Burden of Authenticity and Responsibility

Most senior leaders today, are burdened by having to stay closely on message for fear of appearing disloyal or being misquoted.

One of the reasons Eric Yuan’s announcement has created so much discussion, is it’s apparent authenticity when it comes taking responsibility for what has lead to these mass lay-offs.

• Investors naturally want to know what went wrong, and have comfort it won’t happen again.

• So too, do the workforce left behind.

The Impact of Trust and Transparency

To a large extent, this situation has occurred because of the way recruitment practices and market predictions are synched - or not - in hyper growth organisations.

By being transparent about what occurred and how the organisation will improve in the future, increases confidence in the competence of an organisation’s leadership. The same assessment applies for the workforce.

Will that translate into Psychological Safety in the Future?

Zoom’s most senior leader acknowledging their personal contribution to these lay-offs, makes it safe for other leaders in the organisation, and indeed the industry, to do the same.

So long as it is authentic, and comes from a place of genuine intention, rather than just media spin, it will speed cultural healing and confidence in leadership.

However, it’s not a panacea for all topics, at all times. Given Psychological Safety and Trust are highly contextual, that will continue to be determined by the most senior leader in the room’s specific views on a topic.

Will Psychological Safety translate to other Topics?

Whilst the acknowledgement can be expected to increase safety on the topic of these layoffs specifically, there’s no doubt people will continue to be wary about what they say, how much and to whom in the near future.

So, whilst this communication won’t necessarily increase psychological safety on the next topic on which leaders wish their teams to speak candidly, it will likely mitigate the vicious cycle organisations can find themselves in after making decisions such as these.

If transparency is maintained and leadership deliver on the public commitments they’ve made, trust more generally will likely be restored over time.

Given that trust and transparency have a positive impact on Psychological Safety generally, you’d expect candid communication to increase on other potentially risky topics in the future.

And for the people impacted by these lay-offs?

My hope is the critical cyber industry, desparately short of people, will now be able to access much needed talent. My heart goes out to all in the industry impacted by this significant cyclical adjustment.

At I LEAD Consulting we’re on a mission to simplify Diversity and Inclusion for Leaders and Teams.

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