10.10.2023 | Susanne Bauer

Agile Leadership Part 2: Psychological Aspects

  • Agile Leadership
  • Agile Organisation

Agile leadership primarily means a shift in mindset. Today we find ourselves in a complex world with uncertainties, contradictions and unpredictable changes.

However, many of our learned leadership responses originate from a different world dominated by mechanistic thinking (read more in Part 1 of this article series Agile Leadership Part 1: Setting the Base). Agile leadership requires an engagement with psychological aspects such as safety, emotions, inner motivation and a growth mindset. Leaders need to be aware of their own cognitive biases and learn to challenge them. In this article, you will read why and how such an approach to leadership can not only enhance a team's performance, but also provide stability and direction in uncertain times.

Psychological understanding can help leaders better navigate difficult situations, engage in self-reflection, and create a more enjoyable work life for their employees. However, please be careful: do not be tempted to conduct psychological analyses. As a leader, you neither have the responsibility nor the authority to provide therapy or diagnose your employees. Knowledge of psychological fundamentals can, nonetheless, assist you in asking the right questions and assessing situations more effectively.

Psychological aspects are particularly important concerning mental health, but they always play a significant role. Teams do not function well without psychological safety, and it is your responsibility as an agile leader to promote it. Agile values and principles such as openness, continuous improvement, self-organization, and engagement cannot be conceived without psychological safety, emotional intelligence, a growth mindset, or inner motivation.

Psychological Safety as the Foundation

Psychological safety is the absolute prerequisite for successful teams. Without this safety, a team will not develop an open culture of conversation and feedback, will avoid discussing mistakes, and will learn and progress slowly. Many leaders mistakenly believe that psychological safety in their teams is excellent simply because there is harmony. However, true safety only becomes evident in challenging situations: when a crisis emerges, when problems escalate, when conflicts intensify, when sensitive topics need to be discussed, and so on.

The foundation for psychological safety consists of trust, transparency, and clarity. As a leader, you can consciously promote it, but you can also inadvertently destroy it. There are many small measures you can take to foster psychological safety. Start by consciously assessing everyday work situations with the team and individuals for psychological safety. Observe yourself closely and seek feedback on whether your behavior promotes safety: Are you actively seeking dissent or other opinions? Do you equally invite all team members to participate in discussions? Do you treat people who have made mistakes worse than other team members? Admittedly, it's not always easy, but the efforts are worthwhile: for your team, for your organization, and also for yourself.

For a deeper exploration of the topic, I recommend the books by Amy Edmondson and the supplementary "Psychological Safety Playbook". In the latter, leaders can find practical and easily applicable small moves to promote psychological safety

Emotions – No, Thanks?

You might be thinking, “What do emotions have to do with business?” In work, we deal with factual matters and make rational decisions, so emotions have no place here. Well, that's a misconception: humans are emotional beings, and most decisions are made "from the gut", and feelings cannot be avoided. However, we can learn how to recognize, respond to, and harness our emotions.

No one has an issue with positive emotions: when employees laugh, feel proud, are happy, and have friendly connections with each other. It's a different story when it comes to "negative" emotions. These are not inherently negative, but they are negatively associated because they are often unwanted. Fear, sadness, anger, jealousy – these don't belong in the office, right? I'm here to advocate for these so-called negative emotions, provided that we accept them and don't let them overwhelm us, allowing them to run rampant. Fear doesn't have to paralyze us; it can help us avoid taking excessive risks. Anger doesn't have to turn us into the "Hulk"; it can enhance our assertiveness. Grief doesn't have to plunge us into depression; it can aid in the process of letting go.

But how can we avoid being overwhelmed by emotions? A practical exercise can help: between an external stimulus and our own reaction lies a small gap where we can consciously decide how to respond. This happens when we are in a conscious state and not on emotional autopilot. The first step here is self-awareness: What emotion is arising? How would I react on autopilot? What other options do I have to respond more productively? My advice: Start by naming the emotions; there are far more emotional states than just "good" or "bad."

As a leader, you set the standard for how emotions are handled within your team through your emotional intelligence. Do you deny your own negative emotions or acknowledge them? Do you embarrass others because of their emotions or show appreciation? Do you try to talk others out of their emotions (e.g., by saying, "It's not that bad," or "You need to pull yourself together," or "It will be fine"), or do you accept them (e.g., by saying, "I see that you're angry/sad/scared")?

I also recommend further reading on this topic to promote a productive approach to emotions: "Nonviolent Communication" by Marshall B. Rosenberg, "Search Inside Yourself" by Chade-Meng Tan, or "The Upside of Your Dark Side" by Todd B. Kashdan and Robert Biswas-Diener.

Motivation as a Moving Target

Again, let's begin with a common misconception: the belief that the behavior of employees can be controlled from the outside (e.g., through rewards). Unfortunately, that doesn't work. More money, career prospects, or praise are external incentives used by most companies and can be effective. However, genuine internal motivation is the most potent driving force to stay engaged in tasks, overcome obstacles, and deliver top performance.

As a leader, you can intervene here. Instead of dangling "carrots" (vague promises of rewards in the future), you can change the conditions in a way that your team finds meaning and value in their work. To achieve this, you need to communicate with them and discover exactly where the individuals on your team derive motivation. This is highly individual; for some, it may indeed be the prospect of career advancement, while for others, it might be the opportunity to learn, create something collectively with others, provide support to others, etc. These motivators are not static; they change continuously.

A playful way to learn more about your team's motivators is by using the "Moving Motivators" from the Management 3.0 portfolio.  

Growth Mindset

Psychologist and professor at Stanford University, Carol Dweck, coined the term "Growth Mindset" in her book "Mindset." In it, she defines the Growth Mindset as an internal belief that abilities, talents, and strengths can be developed through effort, dedication, and hard work. In contrast, she describes the "Fixed Mindset" as a belief that talents and abilities are innate. If you can't do something, it will remain that way no matter how hard you try. These attitudes have an impact on how individuals approach challenges (whether they embrace them or avoid them), obstacles (whether they persist or give up quickly), criticism (whether it's seen as a learning opportunity or a catastrophe), and the success of others (whether it's viewed as inspiration or a threat).

Fortunately, the world is not just black and white, and both Growth and Fixed Mindsets can vary in intensity depending on the context and can be consciously changed. For example, when something doesn't go well, you can tell yourself, "You messed up, and you'll never learn" (Fixed Mindset) or "You can't do it yet; you need more practice" (Growth Mindset) – and you can consciously choose these responses. Give it a try!

We also project our beliefs onto others, and as a leader, this becomes particularly important. For instance, if you operate with a Fixed Mindset and tell someone they can't develop further ("...they'll never learn...someone else should handle it...or I should do it myself..."), you are not fully tapping into your own potential or that of your employees. In the context of a learning organization, take a conscious look at your Growth Mindset and how it applies.

Distorted World or Distorted Perception

As if dealing with complexity productively wasn't challenging enough, there's an additional psychological factor that makes our lives a bit more complicated: Cognitive biases. These refer to patterns of thinking and perceptual errors that influence our decision-making behavior. In situations where we perceive, think, judge, or remember, our actions and thoughts are often unintentionally shaped by the preconceived assumptions of our brains. There are quite a few of these biases (lists of cognitive biases and descriptions can be found on the internet, e.g., https://en.wikipedia.org/wiki/List_of_cognitive_biases).

There are several ways to mitigate these biases, but you can't completely avoid them. Here, we start with knowledge - read up on how your thinking can become distorted. This already creates awareness. The next step is self-awareness. To practice, you can begin by consciously questioning small everyday decisions. What thinking traps could be behind them? Could it be that I draw conclusions or make assumptions without sufficient evidence? Could it be that I overestimate the negative aspects of a situation while undervaluing the importance of the positive aspects - or vice versa? Could it be that I assume I know what others are thinking? Finally, you can involve multiple people in your decisions - multiple perspectives can help mitigate cognitive biases.

In the context of a holistic view of complex systems such as teams, departments, or organizations, these psychological aspects provide good starting points for dealing with difficult situations in a productive and humane manner. As a leader, you play a significant role in your system and set the standards for how people interact. It is in your hands to create an environment that fosters psychological safety, openness to emotions, intrinsic motivation, and a Growth Mindset. By becoming aware of your own cognitive biases and actively questioning them, you not only create a climate of learning and development but also one of reflection and awareness.



Agile Leadership Part 3: Self-Leadership

In the next part of the Agile Leadership series, you will learn more about self-awareness and self-leadership because change always begins with oneself.


If you are passionate about the topic of Agile Leadership, or if you simply want to know more about the aspects mentioned in this article: We cover these topics comprehensively in our workshops and spotlight trainings, leaving plenty of room for practice and discussion. I would be happy to meet you there.


Overview of our trainings on Agile Leadership