Psychological Safety has become one of the most important topics in leadership and organizational improvement–and it's playing a far bigger role at Toyota than many people realize. During my recent workshop tour of Australia and New Zealand, I had the chance to reconnect with former Toyota Australia leader Barry McCarthy. Our conversation, along with a newly published Japanese book he recommended, offered fresh insight into how Psychological Safety directly supports Toyota's digital transformation (DX) and strengthens the Toyota Production System.
I've long believed that Psychological Safety is a foundational–but often overlooked–element of Lean and TPS. Leaders like Mike Hoseus say the same, and this new book provides some of the clearest evidence yet. It highlights how Toyota intentionally nurtures Psychological Safety as a prerequisite for learning, innovation, and better workflow–not as something “soft,” but as something essential for performance.
In this post, I'll share what I learned from Barry, what the new book reveals, and why Psychological Safety is becoming a central pillar in Toyota's approach to digital transformation and organizational development. I didn't expect to learn about flying koalas, though!
I did expect to learn something when I had the opportunity to meet up for lunch with a friend, former Toyota Australia leader Barry McCarthy. Barry's also the chair of this year's AME International Conference in St. Louis. I first met Barry back in 2018 when I went on a Japan Study trip with Barry and the Honsha Consulting team, and I learned a lot from him on that trip (check out my podcast with him about these topics).
Toyota and Psychological Safety–A New Book
In recent years, I've come to believe that Psychological Safety is the oft-unheralded foundation of the Toyota Production System and Lean Management. Former Toyota Kentucky leader Mike Hoseus agrees, as we discussed in this Lean Blog Interviews episode — and as mentioned in the book Toyota Culture, that Mike co-authored with Jeff Liker.
I've learned a lot from Barry about Toyota as a “human development company,” as we discussed in his episode.
He agrees with me about the direct importance of Psychological Safety at Toyota — and that it's something they intentionally nurture.
One new piece of direct evidence of this is a book that was published, in Japanese, back in late 2023. The title can be translated to English as:
Barry shared his summary of the book (as translated by him via Google) and I ordered it from Amazon Japan based on his recommendation. When I got home, the book was waiting for me.
“DX” is jargon (an abbreviation) for “digital transformation,” something that's increasingly important to Toyota.
Back to the title — I suspect that “make workau flow better” might be a better translation since we don't normally try to “speed up work” directly through the Lean methodology. Lean is more about reducing and eliminating barriers to flow and not a matter of pressuring people to work faster.
The ChatGPT translation of the title says:
“Supporting Toyota-Style DX: Two Kata That Achieve Psychological Safety and Speed in Work”
“A way of speaking that resonates with young workers” and
“A way to move work forward”
I've been running pages through ChatGPT as a translation tool. It's incredibly fast. You take a photo of a page (or pages) and out comes the translation. I've been uploading photos in a batch size of “chapter” so ChatGPT can perhaps look at the full context of the chapter instead of only seeing page by page.
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Problem Statement
Before jumping into what Psychological Safety is, the book poses a problem statement:
“A diagnostic list for managers–if you mark 3 or more “yes,” you should seriously reconsider your current management style. Examples include:
- “I've never said ‘thank you' to a team member today.”
- “I find the word ‘challenge' cringeworthy.”
- “I haven't talked to anyone outside my own department.”
- “I tend to suppress my real opinions at work.”
I think a good question for leaders is: “Do you remember the last time an employee disagreed with you?” If the answer is “no,” then you have a problem.
What is Psychological Safety — And Why?
(1) What is Psychological Safety?
“Being able to express honest opinions, candid doubts, and even disagree with others for the sake of organizational or team results–without fear.”
— Atsusuke Ishii, 2020, Japanese Management Skills Association
I think that's a great definition. The standard definitions of Psychological Safety, from Amy Edmondson and others, is that P.S. is about feeling safe to speak up about, basically, anything at work.
Is Psychological Safety just a nice way to treat people? No. It's also about business success:
“Psychological safety is a leading indicator for organizational learning, growth, and long-term performance.”
The book also does a good job of explaining what P.S. is NOT:
A common misunderstanding is to associate psychological safety with a “soft” or “low-pressure” environment. But “psychological safety” doesn't mean “you don't have to work hard.” That would create a dead workplace.
Toyota's goal is a “learning organization,” not a soft one.
Respecting every individual means challenging them because you believe they can do better… not being soft or easy on them.
The book explains how P.S. is an imperative–that reducing fear leads to more innovation and that's why “…Toyota is investing so deeply in psychological safety.”
“Improving psychological safety became a precondition for advancing digital transformation.”
How did Toyota prove the connection?
“In employee satisfaction surveys, a surprising result emerged: when psychological safety increased, scores in well-being, communication, and innovation all rose.
The impact was especially visible in locations where teams created a safe space for honest feedback and mistake-sharing.”
What Next?
Psychological Safety isn't a “soft” concept–it's a structural requirement for the kind of learning, experimentation, and problem-solving that define Toyota's success. The evidence from this new book reinforces something many Lean practitioners have intuited for years: people can't improve the work if they don't feel safe to speak honestly about the work.
Whether you're inspired by Toyota's approach or thinking about the gaps in your own culture, the first step is understanding your current state. From there, improvement becomes intentional instead of accidental.
If you'd like support assessing Psychological Safety in your organization–or turning insights into practical next steps–I'm here to help.
Let's talk about how to build a culture where people feel safe to speak up, solve problems, and learn their way forward.
Please scroll down (or click) to post a comment. Connect with me on LinkedIn.
If you’re working to build a culture where people feel safe to speak up, solve problems, and improve every day, I’d be glad to help. Let’s talk about how to strengthen Psychological Safety and Continuous Improvement in your organization.
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