The leadership mistake that took down a $70bn company
Don't do this
Hey team,
Have you heard of Project Aristotle?
It was a study ran by Google from 2012-2015, in which they proved one of the most expensive assumptions in leadership dead wrong.
Google’s People team studied 180+ internal teams to answer the question… What actually makes a team perform well?
They wanted to stress test the theory that if you have a team filled with the most talented people, you technically get the best team. If you have the best engineers, CVs, individual track records, you’d have the best outcome, right?
Well, spoiler alert… It wasn’t.
They found that some teams full of brilliant, proven, high-performing individuals were mediocre.
And some teams nobody would have picked on paper were consistently excellent.
They dug through everything from seniority to personality types. Whether teammates were friends outside work or not. And NONE of it explained the gap.
Then, mid-research, they found the missing piece.
The consistency in all successful teams was, in fact, whether people on the team felt safe enough to say “I don’t know,” admit a mistake, push back on the loudest person in the room, or ask the question that might make them look stupid.
AKA, psychological safety.
But let’s take a look at my favourite example of this in action.
Enron, an energy company based out of Houston, TX, was named Fortune's America's Most Innovative Company six years running, with a market value near $70 billion.
They were stacked with talent and unlimited budgets.
But behind the scenes, the Enron team was using an accounting trick that let them log estimated future profit as if they’d already earned it, so the numbers on paper looked far healthier than the cash actually coming in.
The team knew it wasn’t working, but their CEO had built a culture where questioning the numbers or challenging a superior got you managed out, so the people closest, the ones who could see it clearest, stayed quiet.
By the time third-quarter losses came out, it was too late.
Enron collapsed. And the cause of the failure wasn’t actually the accounting, it was a room full of smart people who felt unable to push back or challenge what they all knew to be wrong.
But here’s the good news…
Psychological safety isn’t a personality trait and it definitely isn’t luck. It’s built through specific, repeatable behaviours. Managers who get this right tend to do three things consistently:
They admit to their own mistakes and let go of perfection
They react to mistakes with curiosity, not punishment. The first response to an error is “It’s all good, how are we making sure it doesn’t happen again?” not “who did this?”
They change their own mind in front of the team. Being seen to update your view when someone challenges you tells people disagreement is welcome, not risky.
That’s what a high-performing team actually is. Not the most traditionally talented people, but the people who trust each other enough to tell the truth.
So if you’ve been telling yourself your team’s culture problem will sort itself out once you hire better, or more people, it won’t.
And this is the exact issue we built Custard to solve. Custard gives every manager the data and the actions to actually build a team with a high level of psychological safety.
On Psychological Safety alone, we built in 22 data points and 18 specific actions, assigned to managers over a 12-week period, levelling up every single manager and their team.
You don’t need a bigger team. You need the smaller, harder thing… People who trust you enough to be honest.
We open Custard again on the 25th August. Join the waitlist to learn more.
Best,
H