Norges Bank Will Study How Psychological Safety Can Improve Performance

Norges Bank Investment Management, manager of Norway’s $1.4 trillion sovereign wealth fund, has launched a two-year study to investigate how “psychological safety” and resilience among investment employees can improve the pension giant’s performance.

The study is a research collaboration with the Stockholm School of Economics that will also attempt to understand how sports psychology can contribute to strengthening the fund’s performance culture.

According to the pension fund manager, the research project is an expansion of an internal human performance program it launched in 2021. As part of that program, NBIM hired sports psychologist Anders Meland as the firm’s senior adviser of performance enhancement.

“This is a groundbreaking research collaboration,” Nicolai Tangen, CEO of Norges Bank Investment Management, said in release. “We believe it can have a significant impact on our performance capability and how we work as an organization.”

The project will be conducted in collaboration with Martin Carlsson-Wall, director of the Stockholm School of Economics’ Center for Sports and Business, and Amy Edmondson, a professor of leadership at Harvard Business School who has written a book on creating psychological safety in the workplace.

“Their expertise will contribute to strengthening the understanding of psychological safety and resilience,” Tangen said. “This will provide us with valuable insights that will then form the basis for targeted programs to improve the work environment and performance in our organization.”

Psychological safety “describes a climate of a group where people believe candor is welcome,” Edmondson said in an interview with Tangen on his podcast last September. She said without psychological safety, an organization faces two major risk factors.

“One is that you will have preventable business failures; you will launch products that a hand full of people knew were not going to work but were too afraid to speak up,” she continued. “The other is harder to see but shows itself over time: not innovating.” She said a fear of speaking up will lead to a dearth of new ideas, services and products that customers want and that, “slowly but surely, we become less relevant in the market.”

According to Edmondson, psychological safety allows people to become more creative, not as individuals, but as a team, and that teams will be more creative when people are unencumbered and are not worried about whether others will reject or disparage their ideas.

“Because a team is creative when it is able to access the diverse expertise and ideas of its members,” she said. “All of us are smarter than any one of us.”