How to Create a Resilient & Psychologically Safe Family Business Environment

Employees and family members who feel psychologically safe are more resilient to illness, stressors, and change.

I have worked with family businesses to overcome human resource, cultural, and leadership challenges. Building emotional intelligence skills, counseling leadership with empathy, and developing strategic solutions can turn a company around. 

A thriving team of talent and leadership = a thriving business

What is Psychological Safety?

People are not machines. They are thinking, feeling, aware, choice-driven creators who, one by one, build the company culture and community. Employees and leaders who feel listened to and appreciated for their contribution and ability and work in respectful and collaborative environments feel mentally and emotionally safe.

A culture of psychological safety impacts the company’s bottom line. A healthy culture saves money and grows revenue. Companies don’t run by themselves – they are run by human beings and humans need to feel psychologically safe to perform at their best.

What are the Benefits of Creating a Psychologically Safe Workplace?

Having a resilient workforce saves costs and increases profits, it has benefits for the employees and the employers. Employees who feel psychologically safe benefit the company and culture as they

  • Feel respected and valued
  • Are comfortable sharing their thoughts and ideas
  • Are more creative and innovative in their work 
  • Willing to learn and adapt more easily to change
  • Positively interact and collaborate on teams
  • Have reduced absenteeism and sick leave
  • Provide better customer service and get great customer reviews
  • Less apt to quit or be fired –  resulting in less turnover
  • Have improved productivity and efficiency

How Can You Create a Culture that is Psychologically Safe?

Here are three common family business challenges with accompanying solutions to creating a psychologically safe environment.

Problem # 1

Family businesses can experience cultures where employees don’t feel included in decision-making. In addition, in many cases, social injustice is not acknowledged, and there is a lack of diversity, equity and inclusion in the company. 

Solutions to Implement

Without psychological safety, employees feel inhibited from being innovative and creative. When employees and family business members feel valued, respected, and listened to, this is the foundation of building a healthy, collaborative culture.

Ideas for how to build a relationship of trust and safety with your employees

  • Listen consistently with empathy and respect
  • Leadership and management are role models for behavior and reflecting company values and policies
  • Ask for employee input – for example, conduct town hall meetings and survey employees 
  • Have management conduct performance reviews and in team meetings have equal opportunity for all members to participate and be heard
  • Create policies around hiring, staff behavior, and customer service which demonstrate diversity, equity, and inclusion

A common gap in family-owned businesses is the lack of a clearly defined onboarding process. Many owners expect employees new to the company to jump right in and do the job. Most people need a year to feel fully integrated into the company culture with a fully developed onboarding process.

Problem #2 

Family members working in the business may not feel they have a voice in the company’s direction. A strong leader such as a parent or relative who controls executive-level decision-making may leave other family members feeling left out and undervalued. Family members may have ideas for the business to adapt and innovate in the future but feel intimidated and discouraged from voicing their ideas. 

Many CEOs realize that their son or daughter isn’t going to operate the company just like they do. As a result, the CEO often refuses to give up the power to their successor, and conflict ensues.

Solutions to Implement

  • Build a family governance structure that includes ownership, structure, control mechanisms, board of directors, executive compensation, dividend policy, and succession.
  • Develop policy outlining marriage(s), divorce, and stepchildren joining and exiting the company (and family). Too often, not dealing with this aspect of a family business leaves the business vulnerable when family member changes arise.
  • Make certain each family member is recognized and celebrated for their individual talents.  

Problem #3

Competing goals interfere with leadership’s ability to lead the company to that next growth stage. Leadership may be attached to how things have been done in the past. There may be a situation of CEO duality – maintaining positions of both CEO and chairman of the board of directors. Another situation could occur if the leader prioritizes family members based on a personal relationship over the company’s needs at work.

Solutions to Implement

  • The solution, in part, relies on the family governance structure in place.
  • Succession planning includes performance goals, age requirements, and personal crisis plans for all key stakeholders.
  • An SOP review policy to determine the relevance of specific SOPs in place and to revise as needed.

Coaching as a Solution

Coaching can help family businesses develop a psychologically safe and resilient culture.

Transitioning from command and control to consultative and collaborative leadership takes time and there are a lot of moving parts. If this process to move your company forward feels a bit overwhelming, conflict is involved, and there are missing skill sets, a business coach can assist you.

In my practice, I am certified by LeaderFactor, an organization that delivers innovative, strategic solutions in corporate leadership and human resources. This allows me access to strategic and solution-based roadmaps and data for assessing and supporting business leaders in building psychological safety in the workplace.


Make your family business resilient & psychologically safe for you, your family & your employees. Employees who feel their voice is undervalued and not listened to and companies with a lack of or conflicting corporate governance and policy for psychological safety are just a few of the challenges family businesses face today. Change can be made in an inclusive, collaborative environment that will grow the company’s bottom line and keep the talent you’ve invested resources in to assist you in building a resilient company.

Feel like you are struggling and need help creating strategic solutions for your family business?

Set up Discover Call now, and we can create a roadmap to success focused on your company’s unique needs. 

Wendy Dickinson

About the Author

Wendy Dickinson is the founder of Ascend Coaching Solutions LLC, a coaching firm that specializes in working with business owners and executives who plan to expand their leadership capacity as their business grows.

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