Hiring, Firing & Promotion with Psychological Safety

Published:

November 28, 2022

Length:

58:18

Available On

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Show Notes
What's at stake? (0:00) If we do this well, we’ll create sanctuaries of inclusion and incubators of innovation. But if we do this poorly, we’ll be perpetually dissatisfied, we’ll create toxic cultures, and our organizations will suffer.

The current state of hiring, firing and promotion (9:00). Do most organizations make these decisions based on technical or cultural criteria? Tim and Junior talk about the process, outcome, and consequence of both.

What role does psychological safety play currently in the hiring, firing, and promotion of most organizations? (16:00) For most, it's a back seat role. If leaders aren't accounting for psychological safety, what are they looking for?

Technical competence isn't everything (19:40) Tim and Junior discuss the cultural and interpersonal components of hiring and why they should be considered in conjunction with technical skill and experience.

Psychological safety is at the heart of healthy culture (24:15). Tim gives listeners an overview of what psychological safety is and how it fits into the HR space.

The difference between cultural fit and cultural competence (29:30). Tim and Junior talk about why using the term "cultural fit" can be dangerous. Cultural competence, rather, has to do with your ability to contribute to a culture of psychological safety.

Firing and psychological safety (34:00). Tim and Junior make the claim that organizations aren't letting people go that should be let go because cultural competence is not a criterion for evaluation.

Promotion and psychological safety (44:45). Turns out, you get what you tolerate. What promotion criteria should we use to ensure that they will perpetuate healthy norms and build a vibrant culture?

Measure psychological safety on your team for free (59:45). Tim and Junior give listeners the chance to put this into practice with a totally free 4 Stages™ Team Survey license.

The Complete Guide to Psychological Safety

Episode Transcript

0:00:02.4 Producer: Welcome back Culture by Design listeners, it's Freddie, one of the producers of the podcast, and today's episode is on hiring, firing, and promotion with psychological safety. Some of you may have attended our live webinar on this topic, and if you did, thank you! You'll have a sneak peek into some of what Tim and Junior will cover in this episode, but not everything.

0:00:21.9 Producer: This is not a re-run of our recording, but a brand new recording of the topics specifically for the podcast, allowing Tim and Junior to explore further some of the areas that they couldn't in the webinar. As always, you can find important resources and links in this episode's show notes. Tim and Junior will mention a measurement tool that we use to measure the psychological safety across teams and organizations. We've also included a link to a free pilot of that measurement tool that you can request at LeaderFactor.com. Thanks again for listening, and thank you for your reviews. Enjoy today's episode on hiring, firing, and promotion with psychological safety.

0:01:10.2 Junior: It's great to be with you again. I'm back with your host, Dr. Timothy Clark. Tim, how are you? Hey, doing great, Junior. Good to be with you. Good to be with you. Yeah, it's going to be a good episode.

0:01:20.6 Junior: Today we'll be discussing hiring, firing, and promotion with psychological safety.

0:01:26.0 Tim: Let me just stop you right there because when you say those words, hiring and firing, and then what was the last one? Promotion. Promotion. When you just say hiring and firing, you got my attention. I think you have most people's attention. I think so. Those are powerful words. They're words that I think we all feel personally at a deep level. And so I just wanted to say that right at the outset as we go into this topic, because this is a topic that is emotionally charged. It's important at an individual level. It's crucially important at an organizational level. It gets your attention. This is very important.

0:02:01.2 Junior: It does. I appreciate the call out. You made a post on LinkedIn, I think it was just last week, about a few of the things that we're going to be talking about today. So if to the listeners, if you haven't had a chance to do that, go look at Tim's recent LinkedIn activity and you'll see at least one post that had a spike, an absolute spike of engagement about promotion. Pretty interesting. Promotion, promotion, promotion, just eligibility for management. Yeah.

0:02:26.6 Tim: And when you get that kind of response, you're not quite sure what to think. So did we strike a chord? Did we tap a nerve? It makes you worried. Yeah. You should go back and look at what we said. Do we really agree with that? Do we really believe that? Do we want to rescind that? But we're going to talk about that, aren't we, Junior?

0:02:49.4 Junior: Yeah. So we've probably piqued your interest. So if you're interested in what that was and what it looks like, go ahead and tune in for the rest of this because we're going to be talking about it. So a couple of things that we're going to be covering today, we're going to talk about selection criteria, which I think is a pretty interesting one. If you're part of an organization, you have some selection criteria, formal or informal, by which you make the decision to hire, fire and promote. We're going to unpack that. And we're going to explore why we do what we do currently. And what are some things that we might change as leaders, as organizations to be more effective? After all, organizations are made up of people. And the more effectively we acquire, retain, and sometimes turn over these people will really dictate our success. If we do this well, we'll be able to achieve the two things we talk often about. We'll create sanctuaries of inclusion and incubators of innovation. And if we do this poorly, we'll be almost perpetually dissatisfied. We'll probably end up creating toxic cultures and over a long enough timeline, the organizations will die.

0:04:03.0 Junior: And so those are the stakes. And I want to just point that out at the beginning of the conversation today. Those are the stakes. High performance, inclusion and innovation, and a business that ceases to be. Those are the poles and those outcomes are dependent on our inputs.

0:04:18.6 Tim: Junior, let me just summarize what you just said, because we all need to take a minute and internalize that. Just take that in. So what you're saying is that these three decisions, hiring, firing, and promotion, the literally the viability of the organization is traceable to these three decisions. How well you make these three decisions. That's the premise. Are we overstating it?

0:04:44.2 Junior: I don't think so.

0:04:45.0 Tim: The thing about that, are we overstating it? Are we, is this an exaggeration? Are we stretching it here? What do you think?

0:04:54.3 Junior: Some people might say hyperbole. I say that it's the exact opposite. I think that that's as plainly as reasonably and as defensively you, that you can put it. I don't know that you can put it in simpler terms. And you also have to think about what would have to be true if that were not true. So if it were not true that the quality of your people dictated the organization's success and longevity, and what would have to be true, that humans aren't the core variable, that you're just plugging in these static inputs.

0:05:30.6 Tim: Well that people are fungible, right, Junior? They're interchangeable and that it doesn't really matter that much in determining the performance and the outcomes of the organization. But that's not true. We know that.

0:05:43.3 Junior: It's also important to understand that we're talking about different timelines. So you can squeeze people in the short term and you can use them in that fungible sense. But long term, you do not have a viable, sustainable strategy. I think that that's definitely true. So let's talk about the current state. This is a great way to set the stage. We hire, we fire, and we promote based on certain criteria. And for most organizations, those criteria are not arbitrary, or at least they shouldn't be. Most aren't. And these are not, when we're making hiring, firing, and promotion decisions, these are not informal decisions. They're formal decisions. In every case, the organization makes an evaluation and then decides to hire, to not hire, to fire, to keep, to promote, to demote, or leave them be. So what are those criteria that we use? What are a few that come to mind for you, Tim? What do organizations look at when they're looking to hire, fire, or promote?

0:06:54.3 Tim: Well they look at performance, but herein lies the problem. So just think about this. We use the word performance and we always say, well, we're going to hire people and we're going to promote people and we're going to fire people based on performance. But then you have to break down performance. What does performance mean? What does it translate into? What does it convert into? And as soon as you begin to break down what performance means, you start to see the problem. And it goes back to the other, to the point that you just made, Junior, which is we tell ourselves anyway that we don't make any of these decisions in an arbitrary way. But part of what we're going to suggest in this podcast episode is that we are perhaps in many cases more arbitrary than we think. That's what we're going to talk about because performance, how do we break it down? We're going to break it down into a few things and once we kind of lay that bare, I think we're going to see the problem that we have.

0:08:03.8 Junior: It becomes pretty apparent as you start to unpack it. So we had a recent webinar on this topic and we were able to run a few polling questions.

0:08:12.8 Junior: Part of the purpose of this webinar was to gather some data and we gathered some very interesting data. So there are two, I guess, buckets that we can put the criteria into that we use for evaluation. One of them is technical and one of them is cultural. So when people say performance, most of the time as you start to unpack it, it's technical, it's role-based, it's skill-based, it's how well can you do this job, almost in isolation, almost in a vacuum. But we know that that's not the entire story. There's this cultural component. And so we asked the audience, which is quite large, what are the selection criteria for your organization? And then here's the question, are the selection criteria your organization uses for hiring, firing and promotion primarily technical or cultural? A. Technical, B. Cultural. And for those of you listening, come up with your own. What do you think the answer was?

0:09:14.9 Tim: Yeah. What would your ratio be, right?

0:09:17.3 Junior: The answer was very interesting. It was 39% cultural, 61% technical. So the majority of the criteria that organizations are using to do these three activities is technical. And you also have to understand that most organizations in actuality probably lean even farther in that direction. What do you think, Tim? What do you think when you see that data and when you see that question?

0:09:45.9 Tim: Yeah. So it's basically 60-40, right? 60 technical, 40 cultural. But here's the problem, even when they say 40 cultural, cultural competence, right? Cultural competency, what measures are they using? How are they assessing a person's cultural competence? How are they doing that? And this is where we get into trouble very, very quickly. And this is where I believe that we're much more arbitrary than we think we are. We can say, oh yeah, we weight the cultural side of the ledger 40%. Oh yeah, how do you measure that? How are you assessing that? And once you look into that, you realize that it's very ad hoc and haphazard. So what I would like to suggest, Junior, is that when it comes to these three decisions, hiring, firing, and promotion, we are reaching a critical inflection point in making these decisions across sectors of society, across all kinds of organizations, because we're coming to the realization that we, first of all, we're not weighting the cultural side as much as we should. Number two, we don't measure it very well at all. And through the pandemic, we learned, take a look at the great resignation, we learned, that was an avalanche of data that told us that millions of people are willing to walk away from their jobs.

0:11:14.3 Tim: Why did they walk away? Well there's more than one reason, but what came out of the exit interview data from the great resignation is very, very clear. The number one thing that people walked away from was a toxic or a dysfunctional culture. That was number one in all of the post-mortem research that's been done. So what does that tell us? It tells us that we're not doing a very good job in making these three decisions that were much more, as I said, haphazard and ad hoc about the way we're making these decisions. And so the pain of reality in the way we make these three decisions has finally created a greater tolerance for the truth. Let me say that again. The pain of reality has created a greater tolerance for the truth in making these decisions. We have not been making these decisions very well, not very systematically, nor are we weighting the cultural criteria as heavily as we should be in making the decisions overall in the first place. So we're at this critical juncture right now in the way we make these three decisions. I just wanted to set a little context there, Junior.

0:12:28.3 Tim: That's where we're at.

0:12:29.7 Junior: That's very helpful context. Another thing that I'll point out when it comes to these results is that let's say that the percentage of those that responded cultural, they use that as the basis for evaluation. You start to unpack that and it's informal and it's subjective. It's based on anecdotal evidence. It's based on a few interactions. It's based on a hunch, a gut feel, and that's not good enough. It's impossible to do that effectively, especially at scale. When you're evaluating people across these three activities, very, very difficult to do. So although we had a percentage respond cultural, those that really do this in a predictable, scalable, efficient, reliable way is very, very, very small.

0:13:23.1 Tim: Well, Junior, to your point, let me just add to what you just said. Let's take the second category of these three decision categories. So we have hiring, firing and promotion. Let's talk about promotion for a minute. Promotion. What is the most fundamental tool that organizations use to analyze their people and make succession planning decisions? They use the traditional tool of the nine box. The nine box is a nine box grid that has potential on the vertical axis and performance on the horizontal axis. So again, that's nice. But then if you sit down with people and you say, okay, great, performance is on the horizontal axis. Okay, I got that. How do you measure performance? And they'll take you right back to quantifiable performance metrics that are based on the operating results for that organization. And they can point you to whatever metrics they're using, whatever measurements they're using. And they're going to say, well, this individual produces these results. So performance is great. Well, that's the technical side. What about the cultural side? Show me what you're using to measure the cultural side. And again, we don't have a systematic way of doing it. So even that nine box is misleading because if you ask the question, how do you measure performance?

0:15:01.1 Tim: What is informing your nine box evaluation? Very very quickly, you find out that it's anecdotal, it's informal, it's haphazard, and it's ad hoc, just as you said, Junior. Therein lies the problem, right there.

0:15:20.5 Junior: The next question is about the title, Hiring, Firing, and Promotion with Psychological Safety. And that's the question we ask. What role does psychological safety play currently in the hiring, firing, and promotion of most organizations? And we're going to talk about the fact that it takes a backseat. That if we're not looking at cultural competence, we're looking at technical performance. And one of the polling questions that we asked in this last conversation, I found fascinating. The polling question was this, how much of an individual's professional effectiveness is attributable to cultural competence? So we know that it's something. Some people might think that it's zero. Most people don't. So it ranges anywhere from 0% to 100%. So we gave people 11 options from zero to 100 and asked them to respond. Now the results and the distribution to this question were fascinating to me. Think about which percentage you think garnered the most votes from 0, 10, 20, 30, 40, 50, 60, 70, 80, 90, 100. 70% had 30% of the votes. 30%. Think about that for just a second. In other words, 30% of people said that 70% of an individual's professional effectiveness is attributable to cultural competence.

0:16:47.0 Junior: Now let me tell you about the surrounding numbers. Those that said 60%, about 20% of respondents. Those that said 80%, 12. Those that said 60%, 17. And so most of the audience, overwhelmingly, the majority of the audience said that more than half of a person's professional effectiveness was attributable to cultural competence. That to me is absolutely fascinating.

0:17:16.0 Tim: Yeah, Junior, if you go back to the data, it's almost exactly 75% of people that said it's at least 50% or higher.

0:17:25.2 Junior: Yeah. So juxtapose those two questions, those two polling questions where we're asking, does your organization use technical or cultural criteria to evaluate a candidate? And then what percentage of that candidate's effectiveness is attributable to cultural competence? And there's dissonance, there's a big gap, there's huge disparity between what organizations are evaluating and what they're saying drives success. It's very interesting to me. And part of this is not mysterious. It's much easier to rely on easily quantifiable metrics. It's much easier to rely on the performance data that we've gathered over time that's straightforward, that's easy to interpret. I think that cultural competence to a lot of people seems amorphous. We're going to try and make it more actionable for you today. But just think about the results of those two questions and think about your own team, think about your own organization, because you would expect if we were rational, which we're not, that those ratios would align a little bit better. That if we said, you know what, 75% of a person's competence is cultural competence, then 75% of the evaluation would be tied to cultural competence. That would make sense. Yet that's not what we see.

0:18:50.7 Junior: What do you think about this, Tim?

0:18:52.5 Tim: No, that's exactly right. So there's a disconnect, there's a misalignment. Most people are saying that cultural competence accounts for more than half of what drives overall performance. And yet we really don't do that in our process. But you said something important, Junior, which is in many ways, however, it's not surprising because we're not very good at measuring this. And so this pattern we've brought with us from the industrial revolution, what do we do? So the traditional pattern is that we promote people on the strength of their performance as individual contributors based on their technical competence and the results they deliver. That's the traditional pattern. Now that's not all wrong. What we're saying is, is that it's missing something very important. And that is the cultural competence has not been adequately taken into account. That's what we're saying. And indeed it hasn't. But what we're also saying is that given the current context, it's in some cases a crisis situation and organizations to keep doing it this way because they're taking an intolerable risk to make hiring, firing and promotional decisions based on this method. It's not working. And so we have to go back to the cultural side of the ledger and say, how can we measure this better?

0:20:17.6 Junior: How can we factor it in to these decisions better? How do we hardwire it in? Because we haven't been doing that. What did we say? It's informal, it's anecdotal, it's haphazard, it's ad hoc, it's based on instinct, it's based on your gut. Not going to be adequate as we go forward. If we keep doing that, we're going to keep making some big mistakes and our success ratio, our batting average is not going to be good.

0:20:45.8 Junior: I'd like to make a quick connection between psychological safety and cultural competence because we have been using these concepts synonymously in many ways. What we say is that psychological safety is the heart of a healthy culture. And so if you're looking for cultural competence, you're looking for someone who has a track record of creating psychological safety. As you recall, our definition of psychological safety is a culture of rewarded vulnerability. So let's think about these three things, psychological safety, culture, and vulnerability. If we go from the outside in and we look at the crux of the issue, what's the behavior that we're looking for in the individual we're evaluating? We are looking for rewarded vulnerability. We're looking for a pattern, a behavioral pattern that this person in front of us does or does not reward vulnerability. That's really the question that we're asking when we talk about cultural competence. And we'll talk a little bit more about how to measure this because we can. That's important to point out at this point in the podcast, we can measure this and we do. We do it with organizations. Part of what we do is an organization here, Leader Factor.

0:22:00.2 Junior: But that's the crux of the issue. Does this person reward vulnerability or do they punish it? If they reward it, probably somebody that we want to consider. If they punish it, probably not somebody we want to consider. It's not that straightforward, but in some ways it is. So if they constantly predictably reward vulnerability, that rolls up into psychological safety, which rolls up into a healthy culture. So that's the chain of effect. That's what we're looking for throughout all three of these activities, which we're going to dive into individually. We're going to start with hiring. And again, the question, what are we evaluating? When a candidate is in front of us and we're trying to figure out whether or not to bring them into our organization, what are we looking at? We're looking at technical competence. Can you do the job? We're looking at cultural competence. How will you do the job? What effect will you have on the culture? Because it's going to be, in our assumption going in, is that it will be positive or negative. We never assume that it will be neutral. This person will be a cultural addition or a cultural liability.

0:23:15.4 Junior: What do you think about that, Tim? Do you agree?

0:23:17.4 Tim: Yeah, it's true. You can't be neutral.

0:23:19.6 Junior: So how do we screen for this is my next question. How do we screen for cultural competence? How do we look for psychological safety? We asked this question to the audience. We got some good answers. But again, a lot of this was informal and anecdotal. So one of the mechanisms that we're looking for, as I mentioned before, is a pattern of rewarded vulnerability. And I wanted to just make a quick shout out for, and I guess it's a tip, something that I found to be incredibly useful. I think that references are undervalued. I think that in today's day and age, we've fallen out of the habit of looking at references. People used to include those as part of their resume just by default. Here are a few of my references. I almost never see that anymore. I almost never see recommendations included by default. It's pretty interesting. And I'm not entirely sure why we've fallen out of that habit. And we won't go into it now. But that's one of the most effective ways that I've seen. And one of the things that came in through some of the conversation that we had, which is you on the hiring side, unless you have someone who has interacted with this person, face to face, shoulder to shoulder, done work together, it's very difficult to evaluate.

0:24:36.3 Junior: There's some indicators, but it's hard. So almost always, I'll try and find somebody who knows this person well, because chances are it's almost inevitably better than I do, and ask them what it was like. You know, what are those patterns? And you try and fish those out. And that can be a very, very effective way to make sure that you don't make a mistake on the front end. Because hiring affects everything downstream. And we don't always, we'll inherit a legacy culture, we don't always get to choose the current state. And we will not have made all of those prior hiring decisions. But we want to make sure that moving forward, we tune that up and bring people into the organization that are competent in this area.

0:25:24.5 Tim: Yeah, I just want to point out something, Junior, and that is the data set that you have. So let's go back. Here's the ledger, cultural competency, technical competency. For the first decision to hire someone, the data set that you're able to put together on the cultural side is much more fragmentary and sparse compared to if you're promoting someone and you already have them in the organization. You are in a deficit position from a cultural competency standpoint when you hire someone.

0:25:52.3 Tim: Almost never will you be able to get the data set that you want. It will be very incomplete. And so another thing that you can do, in addition to references, which Junior is really good point, is to ask behavioral interviewing questions that relate specifically to culture. So for example, tell me about a time when you had an influence on the working conditions or the culture or the climate or the atmosphere of your team. And they need to be able to share specific concrete examples that show their influence as a cultural architect. They have to be able to come up with those concrete examples. If they struggle with that, then that's going to tell you a lot. Now it's still, again, when you're hiring, your data set's going to be fragmentary and sparse compared to promoting. But you've got to try to paint a picture. You've got to try to put pieces of information together to come to some conclusion on the cultural side of the ledger. Otherwise how are you going to do it? And by the way, Junior, we probably should make a distinction here between cultural fit and cultural competence. Should we talk about that?

0:27:06.0 Junior: Yeah, it fits here. No pun intended. I think that on the hiring side, this is a very, very important thing to cover. And it's something that gets confused very often. People will say we really need to make sure that it's a cultural fit. And fit is dangerous. Why do you think fit is dangerous? You have an interesting perspective on this.

0:27:30.5 Tim: Fit to most people implies that you would be able to get along with the people on the team. You don't want that your personality is compatible, things like that. That's not what we're interested in. Yeah, that could be important at some level, but we're interested in cultural competence, not cultural fit. Cultural competence means your ability to contribute to a culture of psychological safety through your own modeling behavior. Because when you bring someone new onto the team, they will be a cultural architect. Now if they're not the leader of the team, then they're going to be a junior cultural architect, but still they're going to have that role. And so you're trying to assess how they're going to perform that role. It's impossible for them not to perform the role because they're going to be modeling and they're going to be exerting influence on the culture of that team. And so you have to come to a conclusion about that. What's their overall net impact on the culture as a contributor, as a cultural architect? So do you see the distinction between just fitting in, cultural fit?

0:28:40.6 Junior: It's a very important distinction. And so what we're saying, our suggestion is when you find yourself in this position, don't ask yourself, would this person fit in? That's not the question. The question is, does this person have the demonstrated capacity to create psychological safety? And the answer to that question will give you much better instruction as to the decision you would make. Because you might have somebody that you would answer no in the first question. No this person would not fit in, but they would be phenomenal when it comes to culture building and cultural architecture. It's also conceivable that you answer yes to the first question and they're an absolute train wreck when it comes to the second. They might fit in, but leave a wake of cultural destruction behind them. That's not what we want. And so you'll get much more predictable outcomes if you use that second question and use that as your criteria.

0:29:37.2 Tim: Junior, to take it a step further, you may want to ask this question. So forget about cultural fit, but does this person have the ability to create team cohesion, community, coherence, engagement, alignment? When they are disagreeing, when they are dissenting, when they are creating intellectual friction, when they are pushing back, that's what we're talking about. That's what you're looking for. But a lot of people, they're thinking, well, they think of cultural fit as will they behave? Will they comply? Will they support? Will they, right? It's almost, it's acquiescent. That's not what we're looking for in organizations. We're not trying to build an echo chamber. So can the person come in and create the healthy tension and the constructive dissent that we need? That's what we're looking for. When you ask questions that way, when you frame it that way, then it sheds a lot more light on what cultural competence really means.

0:30:52.8 Junior: That's a high bar, Tim. That's a high bar.

0:30:55.9 Tim: Yeah, it's a high bar, but isn't that going to stretch us and help us do a higher quality analysis when we make these decisions?

0:31:04.6 Junior: It absolutely is. It's a high bar. It's a high bar on purpose and it's worthwhile. So that's hiring. Let's move into the second, firing. Let's first point out that we're not talking about layoffs. We're not talking about strategic reductions in force. Maybe they're not even strategic, but that's not what we're talking about. We're talking about actively managing someone out of the organization for a failure to perform on either the technical or the cultural front. And the cultural front is where we want to spend most of our time today. We want to begin this section by talking just briefly about stage one inclusion safety. If you haven't heard that episode of that four-part series, I would highly recommend it. The first of the four stages of psychological safety is inclusion safety. Inclusion safety has most to do with people feeling a sense of belonging that's based on some fundamental levels of respect. And inclusion safety, breaches of inclusion safety are often the grounds for dismissal. And so we're going to talk about that because these are boundaries. These are lines that are often crossed in organizations, boundaries and lines of respect that have no consequence. And we're going to be talking about the fact that they should have consequence when that line is crossed.

0:32:25.0 Junior: That's something that needs to be looked at and often isn't. Does this person that we're looking at have a pattern of punishing vulnerability? That's really the question that we're asking on the hiring front. It was a little bit different. Now we're asking, are you punishing vulnerability on a consistent basis? And the fact of the matter is, the crux of the issue here is that organizations are not letting people go that they should let go because cultural competence is not a criterion for evaluation. That's what we're saying. So the firing mechanism inside organizations is fascinating to me personally because it's an indicator of the health of the culture and the health of the organization. If you don't have casualties when it comes to cultural competence, you probably have an issue. It's likely that you have a problem. Yeah, I wouldn't say probably. Yeah. I'm trying to be conservative here, but you're right.

0:33:29.8 Tim: You have a problem. If you don't have casualties, you have a problem.

0:33:28.4 Junior: You have a problem. Yeah. You're not going to bat a thousand on the front end in the hiring. There will be people in the organization and you have a legacy culture, right? So let's say you, listener, are part of an organization. You did not choose the composition of that organization, but you are there to deal with it and you are there to work with it and to help it. And sometimes that means managing those out of the organization that consistently cross that boundary of respect. And there's a breach in inclusion safety. This is often a question that we'll ask inside organizations or when we're working with a leader who's trying to build a team, which is when is the last time you let someone go because of a lack of cultural competence? The answer to that question will give you deep insight into the health of that culture and organization. And it's a question that you might ask yourself. When was the last time? Should the last time have been more recent? Those are some interesting questions.

0:34:27.1 Tim: Yeah, Junior. It goes back to the distinction that we made at the beginning between cultural competence and technical competence. If there's cultural competence and technical competence, then it naturally follows that there must be cultural accountability and technical accountability. So the question is, are you doing it? Now what we said is we lean heavily on the technical competence side in making these decisions of hiring, firing, and promotion. And we tend to exercise technical accountability pretty well, pretty consistently in most organizations. Why? Because we have quantifiable metrics that we track and we can see how things are going. But what we also find is that because we don't account very well for cultural competence, we don't therefore perform cultural accountability very well. We don't hold people accountable for how they get the job done, just the results of the job. And so you can see that this area of cultural competence and cultural accountability, we've got to take our performance to the next level. Many organizations, as you said, they don't practice consistent cultural accountability until there is a crisis. And before that, they tolerate all kinds of violations and breaches of what they originally communicate as their values and their expectations.

0:36:02.5 Tim: But the reality is because they let it go, the environment of cultural accountability is squishy and opaque. And it's that ambiguity that gets them into trouble because why? What you tolerate becomes the norm. And organizations normalize patterns of behavior very, very quickly. So if you begin to tolerate something that's not quite consistent with what you think your cultural standard is or your cultural expectations are, your values are, but if you start to tolerate something that's not quite that, that becomes normalized very quickly. Now you're on a slippery slope. We see this over and over and over again.

0:36:45.9 Junior: I'd like to ask a question about reformation because many organizations ask us, you know, hey, this person's demonstrated this pattern and it's just over and over and over again. Can you help us fix it? Because you know, otherwise they're great, but there's just a small thing. We wouldn't call it a small thing, but sometimes organizations do. Oh, it's just a little bit of a cultural hiccup, right? There's just a little bit of friction here when in reality it is sometimes actively toxic. So tell us about that. What are the chances that if a culture or a leader specifically has become actively toxic, what do we do? Can we reform?

0:37:29.4 Tim: That's a great question, Junior. Let's take a specific example. What if you take a team and a team has a prevailing norm of putting people down. So it's a put down culture and that behavior has become normalized. So you go in and the team is toxic, the team is dysfunctional. What do you do? It's a put down culture. What you're going to find when you have a put down culture or other types of toxic cultures, you're going to find that the leader is either actively toxic and participating in that norm and various other toxic norms, or that leader is passively complicit and letting others do it, allowing others to do it without consequence. One of those two things is going to be true. Either, again, let me say it, an actively toxic boss or a passively complicit boss. Now the remedy, the prescription to fix that depends on which category you have because the root cause is different. If you have an actively toxic boss, it means that that boss is premeditatively engaging in the put down behavior again and again and again and perpetuating, reinforcing and perpetuating that norm. That boss is not going to be very coachable because the boss is consciously doing it, knows it's destructive, sees the evidence and is not changing.

0:39:04.4 Tim: That boss needs to be removed. Based on our research, that boss has about a 5% chance of being coachable and really changing that pattern. On the other hand, if the boss is passively complicit, allowing others to do it, there's a much higher chance that that boss is coachable because they don't know what to do. They don't have the skills. They don't have the confidence. They don't feel the support. They're immobilized. They may fear actually some of the other members of the team, maybe the strong and dominant personalities on the team. There are a variety of things that could explain that passively complicit behavior. Point is, there's a high chance that boss might be coachable. Different root causes call for different corrective actions. That distinction is crucial whenever you find a toxic, highly dysfunctional culture.

0:40:00.9 Junior: I appreciate you sharing that. It's important that distinction. It will drastically affect the way that you approach the situation. So let's go back to the LinkedIn post that I mentioned at the beginning. And I want to read you this quote. This is a quote that Tim made in a LinkedIn post. Employees who do not have a demonstrated track record of creating psychological safety should not be eligible for promotion to management. I'll read that one more time. Employees who do not have a demonstrated track record of creating psychological safety should not be eligible for promotion to management. This garnered some interesting feedback. The thread was fascinating. There were many who agreed very strongly. There are some who said, oh, you might want to qualify that a little bit. That seemed a little harsh. Right? That seems a little bit pokey. What would you say to that?

0:40:56.0 Tim: I've thought about that and I've reflected on it again and again and again. I don't know how we change that. Because if you're in a managerial role in your job, your stewardship is to lead people. Then creating, nurturing, fostering conditions of psychological safety are core to your job. That is your job. So if you can't do that, you are unable to do the fundamental responsibility of management and leadership. How can we put you in a role to lead humans? Now that doesn't mean that you might not be ready later, but there has to be some evidence that you can create an environment, a culture of psychological safety because that is the job. There has to be some indication, some measure, some evidence that you can do that. If not, we can't give you a team and say, oh, well, good luck. That would be irresponsible if I were to do that. If I were to place a manager, give a manager a team and this manager had no demonstrated track record of being able to create psychological safety, that's irresponsible on my part. That's how I feel.

0:42:20.9 Junior: It's interesting to look at the organizational patterns that exist around promotion. You alluded in the beginning to the fact that most organizations promote based on the performance of that person at the level of individual contributor. Then that happens over and over again. Pretty soon, you have some crucial seats in your organization, some crucial roles that are filled with people who have not demonstrated the ability to create psychological safety. And the damage that can be caused because of that is astounding. The higher up the person sits in the organization, the farther the ripples travel and the deeper they go. If you have someone misbehaving when it comes to culture and psychological safety that sits in a role like that, you have yourself a big problem. Because those norms are often perpetuated and the unhealthy norms are often normalized. And that becomes very, very dangerous. And the big ship that was hard to turn before is now even bigger and more difficult to turn. If you have that happening at the top levels of leadership inside an organization, it can be really, really difficult to root out. So it makes it so apparent to me. And part of what just fascinates me about organizations is that some of these statements that we make may seem so obvious.

0:43:52.3 Junior: And yet, we're not very good at putting them into practice. And there are many reasons why. But this is one of the ones that stumps me is I'm not quite sure how you can be met with that statement and have any sort of coherent disagreement. But again, to the original point, there's dissonance between what we're saying we value and the way that we behave inside organizations.

0:44:19.7 Tim: Yeah, Junior, it makes me think of the fact that across many organizations, especially large complex organizations, we have a subpopulation of what we might call high octane individual contributors that occupy management roles. They are incumbents in management roles. That's what their job is. But they aren't performing their roles. They have the title, they have the position, they have the authority, but they're not performing their roles. They're high octane individual contributors. They never made the psychological transition to be able to contribute through other people. They never got there. They don't know how to create leverage through other people. They don't know how to become a force multiplier through other people. They don't know how to scale influence and impact through other people. They don't know how to do it. They may not know, they may even not want to do it because they would rather be individual contributors. Well, then they need to do that. This goes back to a very fundamental principle, which is you have to really love and value and appreciate people. You have to want to be in a role where you're contributing through people. You're okay that the nature of your contribution has shifted from direct to indirect and you have to be able to rejoice in the success of your people.

0:45:50.1 Tim: That's got to be in you. That's got to be in your heart. If it's not, then we really need to put you on a technical track and that's okay. That's okay.

0:46:01.9 Junior: Somehow that seems so obvious and yet so revolutionary to me at the same time. It's amazing. We've kind of voyaged into this realm of promotion now, but to wrap up the conversation on firing, you need to see a trail of people that have been managed out of the organization over time because of cultural problems. That has to be true. I think the way that Tim put it was more succinct than the way that I put it. It's a better way to look at this, which is there is technical accountability and there is cultural accountability. Those mechanisms of accountability need to mirror the criteria for evaluation, which is technical competence and cultural competence. We're evaluating people to bring into the organization based on those two things and we need to look at how we move people out of the organization based on those two things. If both mechanisms don't exist, we're going to have ourselves a problem. In promotion, we asked another polling question and here's the question. Does your organization rely heavily on cultural competence data as part of its promotion criteria? Yes or no? The results to this one were fascinating too and maybe it's no surprise, 79% said no.

0:47:25.3 Junior: We don't and 21% said yes, we do. Again we're saying this cultural competence, we're seeing it's so important on the front and in hiring. It's so important in managing people out and it's also so important in promoting and yet 80% of us say we're not relying on that data as part of the promotion criteria. This blows me away. Again, mismatch. It's a mismatch and I get it but I don't get it. Why are we doing this? Who do we promote? What's the trend? The trend here is pretty similar to the firing trend which is that we're promoting based on technical skill and competence. We're time in role. We're looking at all of these other things but what promotion criteria can we use, should we use, do we use that will perpetuate healthy norms and build a vibrant culture? We need this cultural competence piece and to the point that you made a little bit earlier, you get what you tolerate. This is especially true in promotion because the people inside organizations, we're all going to be looking at those who get promoted and we're going to try and reduce out the patterns. Okay, I saw five people get promoted in this department.

0:48:47.4 Junior: Why did they get promoted? What are their patterns? And if there's a pattern of promotion based exclusively on technical competence, people will see that and they'll say, oh, you know what? I just need to be good at my job. I need to be better in a technical sense of what I do and I will find myself in a higher position and this is often true inside organizations that you show up, perform in your role, be skilled at your job, get promoted, be more successful inside the organization. That's not a mystery to people is they have enough case studies. They'll be able to reduce out those criteria. If the cultural competence is not part of that process, people will see that. They'll see, oh, this person over here, this is a pokey human over here. I've never had a good experience with this one, but he just got promoted. What gives?

0:49:42.9 Tim: And it's not even, for example, 70, 30 on the technical side, sometimes it's 100, zero and you find toxic people that are moving up the chain of command up to the top of the hierarchy and they leave a wake of really destruction behind them and they're not building up, they're not building human capital, they're not developing people. That's your job is to develop people. So it is perhaps the greatest irony that we would promote people that don't have a demonstrated track record of developing people. It doesn't make any sense. But yeah, we do this all the time in organizations and we have since the industrial revolution and that's why we're saying again, we have hit an inflection point and as we move deeper into the decade of the 2020s, there's going to be less and less tolerance for it. We're already seeing it. We're already seeing, especially with the younger demographic cohorts that are moving into organizations, you look at millennials, you look at Gen Zers, they want bosses who are incredible coaches and mentors that can help them, guide them, direct them, show compassion, show empathy, really connect, really collaborate, really be curious. That's what they want.

0:51:03.2 Tim: They have very little tolerance for someone that is just in pursuit of self advancement and uses leadership as a stage for their own aggrandizement. It's not working. That's just not working. So I think what we're saying is that model, it's been antique for a long time, but it's become so antiquated and so outmoded that it was a gradual process and now it's a sudden process. It just is. It goes back to, I think it's Hemingway's character, right? In The Sun Also Rises, there's a dialogue and they're talking about this guy that goes bankrupt. How did he go bankrupt? Well, gradually and then suddenly. I think that's what's happening to this leadership model. There was this gradual, gradual obsolescence, command and control, fear and intimidation, the imperial model of leadership, gradual obsolescence. And now we've hit this inflection point. Now it's becoming sudden and dramatic and people are saying, well, we cannot afford to hire people or to fire people or to promote people that don't demonstrate cultural competence. The risk is too great. We can't afford it.

0:52:22.7 Junior: We're calling the decade of the 2020s, the decade of culture. And it does seem sudden because it lies on the backdrop of hundreds of years of the imperial model. And it does seem sudden when you juxtapose today's current environment with how it's been for hundreds of years. It becomes quite obvious that that inflection point is here and it does feel very, very sudden. So that's a little bit about promotion. We pretty much made our way through all three of those, hiring, firing and promotion. And you may still have the question, how do we measure cultural competence? And we want to provide each of you with the opportunity to measure your own team or a team that you work with using the four stages team survey. And so we're going to make that available as a free pilot if you want to measure this with your team. So that's available on the website. We'll go ahead and link to it in the show notes. But this is part of what we've been spending a lot of time on over the last few years is figuring out how to crack the code here. How do you assess cultural competence?

0:53:32.9 Junior: How do you incorporate it into your hiring, firing and promotion activities? This is a great way to do it. We've also seen a real uptick in the way that organizations are using this tool for promotion. We've come out with really cool visualizations or chart views that you can see the health of each team inside of the hierarchy. Never before have organizations had this type of data to aid in their decision making. They've never had it, especially using a validated instrument. So if you haven't had a chance to look at that, please do. This is part of what we're doing with organizations ourselves when we're working with our client portfolio is helping them incorporate these types of tools into their evaluation to make better decisions. And we're seeing really, really good results as we try to reduce that dissonance, close that gap between what we value in cultural competence and what people are being held accountable for and what we're measuring. As long as there's a big gap between those two things, we're going to have a lot of problems. And so closing those needs to be on the top of our list of priorities. So Tim, what else do you want to say?

0:54:48.1 Tim: Hiring, firing?

0:54:49.6 Tim: As a summary comment, I think I would just say that we have reached an inflection point where organizations are now hardwiring psychological safety as a selection criterion for making these three kinds of decisions, hiring, firing, and promotion. We're at the beginning of this inflection point. It's going to continue. It has to continue. So reflect on your own organization. To what extent are you incorporating psychological safety, which is a proxy for cultural competence? It's the best, most accurate measure for cultural competence that we have. To what extent are you incorporating psychological safety into these decisions? And are you moving from informal to formal? Are you moving away from the anecdotal so that you can be systematic about making an evaluation of how someone is doing on the cultural side of the ledger? That's where we're headed. We just want to give you an opportunity to reflect on what you're doing in the organization right now and what the next step is for you to hardwire that in as a selection criterion.

0:56:10.6 Junior: Yeah. Well, thank you everyone for your time today, for spending an hour with us talking about this. It's an important topic. It's something that we're passionate about.

0:56:19.5 Junior: It's something that we spend a lot of time on with our client organizations. So if there are a few things that you could do for us, I'd like to just outline those. If you liked today's episode, please share it. Please give us a like, follow us on LinkedIn. If you're watching this on YouTube, please subscribe. This is how we get the message out there and how you can help us. The most important thing that you can do is to spread this content. The world desperately needs it. There are a couple other free resources that I want to call out that will be available in the show notes. The most revised version or the most recent version of the complete guide to psychological safety has been revamped. You can go ahead and download that as well as the past webinars and the book, The Four Stages of Psychological Safety. If you have not had a chance to read that, we would highly recommend it. If you wouldn't mind leaving us a review, letting us know what you thought, that would be tremendously helpful. So with that, we'll go ahead and wrap up today and we will catch you next week on Culture by Design.

0:57:16.5 Junior: Tim, thank you for your time.

0:56:09.9 Tim: Thanks, Junior.

0:56:09.9 Producer: Hey, Culture by Design listeners, you made it to the end of today's episode. Thank you again for listening and for making culture something that you do by design and not by default. If you've enjoyed today's episode, please be so kind to leave us a review. It helps us reach a wider audience and accomplish our mission of influencing the world for good at scale. Today's episode show notes and other relevant resources related to today's topic can be found at leaderfactor.com/resources. And with that, we'll see you next episode.

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