Now I can quite hear you. You can hear me now. Now I can, yeah, all right, but here it's super safe, so no problem. Was great, I loved it, I love the opening, I loved the video, yeah, same here. We have fantastic people here and uh, yeah, it takes a toll on them once in a while, you know, yeah.

So, um, psychological safety, why do we need it as investors and what does it look like? Well, I think you need psychological safety as investors because your success depends on your ability to make high quality bets. Now you might not like the word bets, you might prefer decisions or Investments, but make no mistake, they bets, right? There there's uncertainty in in in in that way.

Um, and those are absolutely dependent on high quality conversations and high quality conversations are dependent on psychological safety. They require that people lean in and say the uncomfortable truths when they they raise an idea, they raise a concern, they raise a dissenting View and the conversation includes sort of questions and answers and and and makes thoughtful progress toward an uncertain resolution, but one that people feel is is high enough quality to go forward, right?

So what does it look like? It looks like a sense of permission for cander. It does not look comfortable, you know, in fact, it it probably looks a little uncomfortable because it's not natural and normal to sort of to lean in with the thoughts you have that you're not absolutely sure are right or helpful, yeah.

So, so the obvious question is also when it becomes kind of um unsafe, it it becomes unsafe once in a while anytime, but when it becomes like chronically unsafe, what what do we do any advice to the audience?

Ah, yeah, I mean, because when it becomes chronically unsafe, what what you end up with, which by the way, is invisible and I think that's really important, you know, to recognize the the asymmetry, um, here, because you can hear when people speak up, you cannot hear when they hold back. You just don't know that there actually is something in their heads that they're not sharing.

So so in a sense as a leader, you have to assume that it may be happening and that that it may put you at risk and and the quality of the work at risk. So I think what the the place to start is just and it may seem, you know, old or redundant, but keep reminding people of the nature of the work you're doing, that the work you're doing necessarily includes uncertainty, right? It necessarily benefits from diverse perspectives or backgrounds that you know, that that have a different angle on the situation, um, and so it's it's um.

When I and why why does that matter? Because when you are reminding people of the uncertainty and what's at stake, you're setting a kind of intellectual rationale for why it actually makes sense that you do care about their voice. So it's so you actually focus on the on the why we need it, so the the drivers, not so talking too much about psychological safety might have backfire a bit.

No, no, in fact, some ways if if I had my brothers, I'd recommend don't talk about it at all. It just talk about what does a high quality conversation look like, how Does it include people, you know, really taking those risks to share their thoughts and being willing to listen intently in the moments when they're not speaking, right? So that together we are making progress toward the best possible decision we can make.

All right, so so this psychological safety goes a bit up and down, so it fluctuates a bit, so but how vulnerable is it really from your perspective, maybe that's a bit too Global question, yeah.

I mean, this is the this is sort of the problem is that it's it's actually quite vulnerable, um, and I I think there's two asymmetries, uh, that that that people need to internalize, uh, and sort of intellectually and maybe emotionally as well. And one is what I call the risk reward calculus, right?

And that's the if I mean, imagine a moment where you are weighing maybe not entirely consciously, but you're you're you're weighing whether or not to speak up about something to share a thought, a view and in that moment, if you were to speak, who gains? Well, the team, you know, the the the um, the organization, if you will, how confident are you that your voice will produce a gain? Not very. And when will that gain occur? Well, sometime down the road.

Now, if you because you're not quite sure, stay silent, who gains? You do, right? You stay you stay safe and comfortable for another minute. When does that gain happen? Immediately. How confident are you that your silence won't produce a bad outcome? 100%. So that's a pretty profound asymmetry, you know, when you think about it, you realize that leaders actually have to go on a treasure hunt because otherwise the risk reward calculus will get you every time.

And and I think the other um, the other is the asymmetry between um, the the good and bad exchanges, right? So if I have U you know, and maybe it happens rarely, but if I have a bad a bad reaction to my taking a risk and speaking up and someone is dismissive or judgmental or you know, even um, you know, downright humiliates me, I will not try again for quite some time.

Whereas if I have a good response, it won't sort of preclude me from trying again, but it doesn't necessarily make it that much easier. It just doesn't make it harder, right? So again, the degree to which I'm willing to try again goes vastly down if I have, you know, one humiliating moment. And so given you know, given those those sort of asymmetries, you have to um, you have to sort of I guess I guess I'm just answering your question wholeheartedly, which is you are vulnerable, yeah.

Makes sense. I think I think we all can relate to that as well. So so one misunderstanding or uh, or what what we ended up uh, realizing sometimes is that people when we talk a bit about psychological safety, we have to open the box a bit and then we talk about it and then people may be missed the point, so they're trying to make it comfortable, but for no particular reason performance- wise.

So like you get points for making it safe, but like you forget to to draw the link between that what's what's your advice for those misunderstandings, yeah.

Yeah, yeah, I mean, I think my my Dev is again to to not again, but to come to come to that um, constant sort of appreciation of the knowledge intensive really intellectual work that you do, um, you know, and that's that's different from say high-risk work in a you know, in a a power plant or an aluminum plant or something like that, but there is some there are some ways in which you have it in common, which is that both require a sense of of of vigilance of very um, thoughtful conscious inter relationships with others.

I'm interrelating meaning I want to listen to you closely, I want you to listen to me closely, we want people to be paying attention, um, and doesn't mean you have to be you know, completely on all the time, there are breaks of course, and there are you know, we we want people to you know, leave at the end of the day, go for a run, whatever, you know, whatever works for you, but but that that sense of awareness that the knowledge intends of intellectual work you do requires a kind of um, alertness and an and an engagement to do it well, um, and you know.

What what allows people in high-risk Industries to perform well and to avoid sort of catastrophic accidents or worker uh accidents is not a kind of um, I don't know, a blind spot about failure, but quite the opposite, it's like a almost a preoccupation with failure. They are aware, you know, that around every corner is a potentially fatal accident and because of that, they sort of bring their aame to the moment to the moments that need it and all I'm suggesting is you can bring your aame to the moments that need it and it it's it requires um, vigilance, it requires a little bravery, you know, and it requires just kind of an appreciation for for what's at stake.

All right, thanks for sharing that isn't it interesting us nerding about you know, on the psychological safety part, so guess what Amy has written this great book, I just finished it, uh, the right kind of wrongs is the name is a book about failures way great fun what fun so so you separate so so I think sometimes having a language around failures and doing things wrong is like uh, digging or have some more Precision to it and you you have an interestes um separation between basic complex and intelligent failures can you clarify a bit, sure.

Sure, so a basic failure is a failure that occurs in familiar territory usually because of human error, just a single dumb mistake leads to a basic failure. For instance, in 2021, a City Bank employee accidentally checked the wrong box in an online form and accidentally transferred $900 million to a group of lenders, right? And then later a judge uh made a controversial ruling that did not allow City Bank to reclaim those funds, right?

So it was a single human error, maybe not paying attention, maybe not well trained, I don't know, that led to a failure that we would all consider fairly sizable that was nonetheless basic. So basic doesn't mean small or big, you know, it's a basic failure when you forget to charge your phone and you know Miss a meeting, whatever, but some of them are big, some of them are small.

Basic complex failures are ones with um the perfect storms. They're the they're the failures that inevitably happen in you know, relatively familiar territory when a handful of small deviations from best practice come together in just the wrong way to create a failure, a supply chain breakdown in a global pandemic, for instance. Again, basic failures can be I mean, complex failures can be small or large, but there the what makes what's different is that any one of those factors on its own, those small deviations wouldn't produce a failure, it it was The Perfect Storm the way they came together.

Neither basic nor complex failures are worthy of Celebration, right? They're not useful like when we're at our best, we can prevent them. I mean, some of them will slip through, I understand that and that's okay, we're human, but when we're at our best, we don't need to have those they they bring us learning, but not a whole lot of new learning.

In contrast, what I call intelligent failures are those that uh explicitly occur in New Territory. They are the undesired results of thoughtful experiments. So a failure for a failure to be intelligent, um, we must not yet have the knowledge we need to get the result we want, so it's new territory.

Much of your work is in New Territory by definition, yeah, it's in pursuit of a goal, whether that's making money or you know, mastering a a skill or making a scientific discovery, you have a goal. Number three, it is um, hypothesis driven, you've you've you've taken the time to figure out what we know, what we don't know and you've made a good bet. And then finally, for a failure to be intelligent, it should not be any larger than necessary to get the new knowledge, right?

So this is what scient do every day, uh, but I would argue in your business, you are doing this, uh, as well. Athletes also do this, yeah, trying to yeah, trying to get into new territory, uh, you're stretching and it doesn't always work, yeah. So, uh, new territory, we need to take risk and we should celebrate it because we don't know it's hard to yeah, you have to train yourself to say, Okay, that was disappointing and it's still valuable, right? It brings us something we did not know before, yeah.

And all territory, so we we're all human beings, we had some erors small today, you know, things happen, uh, we should uh, get them out in in the open so we can identify them, learn from them and maybe who knows, we might even prevent them next time, but uh, yeah, exactly, so that's useful just uh, before we run out of time here, um, Amy, so um, we see that in this Marathon sport, um, you become world champions of uh, committing mistakes or doing doing something wrong and yeah, so but so you want to focus on the on the wins, right?

But I can see it takes a toll on quite a few people, any advice this is I suppose this is my job, but uh, any advice, yeah, uh, how can people travel light, but still remain their because we're long term, we want people to last be years.

I think you know, part of it is having a a more you know, training yourself to have a more rational response to the disappointments. I andan I think we have a natural response that's quite emotional and we believe, you know, at some level, We Believe well that shouldn't have happened and it's it it it it exhausts us in a way to think that way.

And when we learn to master the pause, you know, just insert that space between the stimulus and our response, we can then think more rationally about the situation, okay, that's disappointing and what do we learn from it, what actually happened and how do we use it, uh, to go forward, it's a almost a Relentless forward F Focus, we care about the past because the past is full of learnings, but our our our focus is on on the future and and what do we do with all that valuable learning?

That's good advice. I just haven't off the burner. I need to ask you Amy, uh, this psychological safety really strike the chord researchers applied PR practitioners organizations have used it to become better where are the herds going in social sciences now, do you think?

You know, I I I I I I don't really know. It seems to me all anyone can talk about is AI, so maybe it's AI nudges that help us Master the pause that help us, you know, sort of be brave, uh, be more rational, I don't know, but um, we'll we'll have to just wait and see.

This was great, Amy, thanks for joining us, bye. Thanks for having me, thank you.