The ROI of Psychological Safety in Business with Donald Thompson

I found this cheat code very early in my career. Most very successful people want to teach and train who's next. But very few leaders are asked, what was your thought process when? Because I'm insatiably curious. I used every opportunity when I was selling to other executives. When I was selling to potential partners, I would get a 30 minute meeting done in 25 minutes so I could leave five minutes to ask a question or two of someone that I might not be able to play around of golf with. And I found unequivocally that business leaders love to share what they've learned. Welcome to from the Top with Chad Hesters, the podcast for CEOs, founders and decision makers looking for a straightforward perspective on issues facing global leaders. No fluff, no jargon, just real conversations with people who've made tough calls and are here to share what they've learned. Here's our host, Chad Hesters. Hey everyone and welcome to from the Top with Chad Hesters. I'm your host Chad Hesters and I'm joined today by Donald Thompson. I'm pretty excited about this guest today. Donald is award winning CEO. I mean like legitimately, a lot of people say that, but this guy has a whole lot of stroke in his career. He's a multi exit entrepreneur. He's been honored by EY as an entrepreneur of the year. He's been in forums next 1000 and he's at least three times inc. 5000 chief executive. The guy's an author, he's a speaker, he's a coach and advisor to leaders around the world. Lot of expertise and credibility and I'm really glad we got a little bit of time with Donald to hear from him. Donald, I don't know if I did your background any world justice with that intro, but would you be kind enough to fill in some of the blanks for our listeners here? I would absolutely. And first, thank you for having me. I am humbled and honored to be here with you all and talk to your guests and community. I would say the biggest thing I would say in my background is I tell folks I'm the son of a football coach. And I don't say that from an athletic paradigm, I say it from a working with people paradigm. So I've lived in all different parts of the US but more importantly, I've learned that anything that you're going to do, big and significant, requires a team to execute it through. You can have an individual vision, but in order for that vision to have value at scale, you have to be able to be resilient get up. When you get knocked down, you have to realize that there are other very talented people you'll compete with and respect those competitors to bring out the best. And so that that background really helped kind of shape the way I view the business world. And as I went in and left school and started in the business world, I started out as employee number seven at a software company in Raleigh, North Carolina. I didn't have an engineering degree even though we sold engineering software. But Grant Willard, my mentor, took a chance on me and to fast forward in my career, I'll say this, I worked for Grant for about 10 years. We then exited that firm to Adobe Systems. Adobe only wanted the IP and the engineers that developed the ip. So we spun out another part of the company at 36. That was my first CEO shot and myself and 16 other team members did a private buyout of the remaining assets of that business and Grant held the note personally. We paid that Note back in three years and then we grew that business from 16 folks to about 100 folks, 150 folks, and exited to an Indian outsource IT provider. They like Adobe, only wanted our engineering services. So we again spun out another small business that was doing some work with Adobe Adobe Enterprise Cloud at the time and we grew that spin out business from about seven people to another hundred folks and exited that to private equity. I say all that to say that we learned how to win through bootstrap. We learned how to pivot with the market. And my career as a business development leader with a little bit of tech, a little bit of marketing all comes back to the fact that winning through people is going to be the enduring element of business success, both now and the future. And so that's kind of a little bit on background and a little bit of kind of what brought me here today. But those are a couple of fun facts for the career along the way. That's a great story. It sounds like you got the pattern figured out. I don't know about figured out, but what I will tell you is we definitely have the signals that to where you should learn more, right? I wouldn't profess to say the pattern figured out, but listening for the signals to dig in deeper and find more is something that we've definitely learned over the last few years. Well, listeners of this podcast know that I share the same view that getting the right people on board matter, but there's a lot more to that and I saw a quote from you here recently and if you don't mind me reading it, it was Quote, during my childhood I learned how to get knocked down and get back up. You must push through because the goal you want to obtain is so much better than the work you must put in. And I love this part. You endure pain because the promise is so much greater. Now that's some powerful stuff. And I think a lot of people that have built businesses would agree with you. You wrote a book titled Underestimated and I would love to have you tell us a little bit about. So let's talk about being underestimated and what does it mean to hustle with humility, which I think is also a Donald Thompsonism. So maybe just open ended question about when you're somebody who's underestimated. A lot of us out there think have felt that before, right? That's right. And how do you overcome it in any sort of perspective you want to provide people? One of the things that when I use the word underestimated it didn't mean I didn't have any resources or any skills. What it meant was I didn't have a traditional path forward in corporate success. I didn't have a degree from the right schools, I didn't have parents that had money. But I had that grit. And what I decided to do was turn that lack into kind of a limited resource to really be a competitive learner. And so what I mean when I talk about hustle with humility and I found this cheat code very early in my career. Most very successful people want to teach and train and who's next? They've got so many folks that are asking them for financial investment, for a door to be opened. But very few leaders are asked what was your thought process, when, what did you do different early on in your career that you would advise young people? And because I'm insatiably curious, I used every opportunity when I was selling to other executives, when I was selling to potential partners, I would get a 30 minute meeting done in 25 minutes so I could leave five minutes to ask a question or two of someone that I might not be able to play around of golf with. I might not be at the same country club. And I found unequivocally that business leaders love to share what they've learned. And I became someone that was easy to share and apply and grow from. And so that's what I mean by hustle with humility. Sometimes people think it's just about the work and we glorify the grind. There's a lot of people that work hard, diligent 12 hour days and they don't end up with success because they don't have somebody that can shoulder steer the mental model that they're looking at the world. Hard work is one significant component to winning. But if you apply wisdom and perspective from others and you're humble enough to really thoughtfully ask people who've been there, done that, you can jump the line a little bit in terms of that success base. And I think very simply, when I think about underestimated, I didn't allow it to predetermine what I could accomplish. Underestimated was a current state for me early in my career, but it did not limit my dream level. And that's one of the things that I share in the book and that I share with folks that I coach and teach. We all have a lot of different things that we would call our opportunities for growth and improvement. And we know that behind a closed door, we know what the world sees of us and we know what we're working on. That hustle with humility is finding people to help you with the things that you need to work on. Is that hard? Is it hard? Because I think people might find that concept intimidating. You know, if you're not somebody like you or somebody like me that has a career where I talk to people for a living, really it takes a while. And it's pretty intimidating the first time you get up the nerve to ask that senior executive because you got extra five minutes. The question any advice to people about getting up the nerve and is it that, hey, everybody puts their pants on the same and don't worry about it, or is there another kind of a life hack on how to get people to open up and share their perspective with you? I really appreciate that question. That has a lot of depth to it. It is difficult the first time or two that you do it because you don't know the response to anticipate. And anytime we're doing things for the first time, we're a little anxious because we don't have the predictors of the response. But what I will tell you over a career that now spans a few decades is when I thoughtfully have asked questions of business leaders, they thoughtfully reply, I literally have not had somebody that says, I don't have time for that. I don't really have anything to add. And I would also encourage people that are a little anxious about that to start with dipping their toe into that kind of conversation. Listen, based on knowing me, We've talked for 30 minutes, but we've looked up each other on LinkedIn. Is there anything you're reading a podcast you're excited about that you'd love to share with me that you think I'd get benefit from. You can start just with a learning directional question. It doesn't have to be some kind of in depth thing because the goal is from each conversation with somebody you admire to just take one or two learning nuggets. And then as you dip your toe in the water and as you interact with folks on a more frequent basis, then I ask questions that might have a little bit more depth. The other thing that I do in that framework is I ask them to point me in the right direction for do you know somebody that has these skills? Because I'd love to buy them a cup of coffee. So now I'm not even directly asking that senior executive or CEO, and I will give a very specific example of this. One of the folks that I partner with in my coaching space, and I can drop this name because we're just here chatting, is the CEO of the Americas of Hugo Boss, and one of the clients that I've worked with for a number of years and his leadership team. So as I was talking with Stefan the other day, I wanted to get his take as an expat. He's from Germany, born in Germany, German company, but he's been living and working and growing business in the Americas. I said I'd love to get your feedback on how the current political environment is impacting business leaders and how they plan. So this was maybe a year or two ago I asked this question. But my point being is I asked him a question for his advice. I asked him a question that he couldn't get wrong, right? Because it's just his point of feedback. But also through those kind of questions over our relationships, it is now changed from just a transactional one to now we bounce ideas back and forth altogether. And so we created another relationship thread. And that's an example that I'll use that I think is germane to folks in your audience. Very interesting. You know, I've noticed after having spent a lot of time with executives and leaders over the course of my own career, that good leaders over their career, they learn how to ask the right questions. And I think a lot of that comes from having made mistakes or seen mistakes made. But you look some of the top investors in the world, and we're talking the Warren Buffett's, the Ray Dalios and those types of the world, they are expert at asking good questions with humility. And I just think your commentary there is, it applies up and down the Corporate food chain, the spectrum, it spans all. Any kind of metrics we want to use apply to society. I think anybody who's listening should learn to be a better question asker. But you know what it takes, especially inside a closed corporate system. It takes your employees have to feel like they're engaged. Like if they feel like they have permission to ask those questions. And you've done a lot of work and have a lot of thinking out there on the idea of engagement in the workplace. Because without people feeling like they're able to engage, they won't. So what does good engagement look like in the modern workplace? And why should a leader care? I mean, is it just altruism? Is there an actual roi? I don't know. Like what's your view on that? I really appreciate the question, Chad, and one, the leader should care, but let me not assume without good data and perspective, they should care. A lot of leaders hear terms like psychological safety and it's the ability for people to be their full self at work, to speak up at work. And all of it is good. The research behind it is solid. But very few of us are taught how psychological safety can show up in a high performance organization where you're moving fast, have to pivot and you have to be pretty direct in your communication because time is a critical element. So psychological safety to me is not coddling, it is not over enunciating the kind of the touchy feely things that sometimes we get allergic to. Psychological safety is, do you create an environment where the best ideas surface in time for you to execute them properly? And so when I talk about the ROI of psychological safety and employee engagement, just think about the cost for somebody that's in manufacturing, that is building in manufacturing apart to the wrong outdated spec. And is your review process such that somebody on the ground floor, somebody in your engineering services, somebody in your mid level, your organization is willing to stop the production train because they see something that needs to be double checked? Or is employee silence the strategy of the day and people just sit back because they're not able to speak freely without fear of consequence? When you're in a room or on a Zoom of 15 folks and three or four people create most of the dynamic of the conversation. I talk to business leaders about the risk of the best ideas being unsaid because we didn't create a true collaboration environment where somebody that might be more introverted is pulled into the conversation. And so the risk factor here, before we even get to the revenue and the ROI factor, the risk factor is that most leaders are making decisions on a lower percentage of insight than they have in the organization because people are afraid to speak up because they don't understand how it's going to land if they have a view that's unpopular. And so now when I coach CEOs and business leaders and they understand that, they say, all right Don, well how do I fix that? And the one thing that I tell most leaders, and I'm guilty of this, I'm excited about the work I do, I'm excited to share and be parts of discussions. But I forget that every time I enter a discussion, I have seniority power in most rooms that I'm in. So it sounds like a dictate even when I'm just trying to add to the dialogue. So to your point, Chad, leaders need to learn how to ask better and smarter questions and then let the first flow of the room, let the best ideas and information rise to the top and then towards the end in the wrap up the session, then the leader needs to drive the dialogue and land the plane to reach the outcome that they need for the enterprise. But if we as leaders start with how we feel, what we think, our perspective, we then create unintentionally an echo chamber of our own thinking. And that's one of the ways that employee engagement can live. And in having better meetings, having better review process and having better after action reviews to really grow the global enterprise. The idea of engagement being first a risk management factor before it's ever an ROI factor. That's powerful stuff, Don. It's almost like you've thought about this before. Well, I appreciate it. No, seriously, it's great. You know, I am full of military officer and our regular listeners will know that I probably reference that way too much, but I had the opportunity to work around some very high performing teams, whether it was in the intelligence community or the special operations community or the aviation community or our diplomatic community. And you know the ones that you used after action review, the ones that made it culturally normative and safe to sit around and talk about the mistakes they made personally and how they're going to continuously improve next and then ask their colleagues to do it, regardless of rank or status or tenure or wherever they were, the ones they were always high performing and accomplish their missions and objectives. And I think you see that in the corporate world as well. The organizations have got maybe flatter or higher run rate on communication flow because it's okay. So here's the question. If you're an organization that have maybe more conservative, hierarchical, less Communicative structure where people might not feel like they're enabled to be able to raise their hand in the meeting and say, have an idea. How do you make organization create an environment where engagement's a little bit easier for people? Any suggestions? Yeah, I do have a couple of suggestions and this is a really good follow up question because I'm an optimistic person. So I tend to think about things and how things can work. And what you're describing is, what if it breaks down, right? What if all of our culture cues scream psychological safety but it doesn't truly exist? Two things. One, when I'm working with a high octane environment that may be more top down control, I typically teach people to ask permission. Think about your military background. Think about all the military movies people have watched. Someone will ask permission to speak freely and when it is granted, there's an honor in that because they've asked permission. And then that leader has the opportunity to say, no, I need this done a certain way this time. Get this done. Or yes, let me pause and hear your perspective. Now, I'm not in the military, so what I will do is I will ask that leader in the meeting, that high octane leader, are you open minded to an alternative point of view or do you want us to just build the plan to execute based on what you delivered and I'll just ask the question just like that and give that leader space to create that moment. The second thing that I do is some leaders, even with that kind of language, it is best to approach them in private with an idea that is contrary to their firm publicly stated belief. I think we use email to debate things back and forth. When I'm working with that kind of leader, I'll put in the subject pre meeting notes. I'll say, listen, I have a little bit different view that I just want to stress test with you before we're in the meeting with others. And I want to find out if this is something that's an offline dialogue between us or something you'd like me to bring up in the session with the other group. And I'll give my meeting information, I'll give the sources that I've looked at, who I've talked to and I will tell you, three things happen. One, the leader will keep going and I know, man, this is how we're doing it, this is how they want it. All good. The second thing is the leader will say, don, you wrote me an email earlier. I want you to articulate for the group your thinking. I'm not fully on the same page with you yet, but it's worthy for the group to hear. That has happened to me also. And then the third thing is the leader adopts it as their idea. I don't get any credit, but all of a sudden they've changed a little bit. And maybe it's not my idea versus theirs, but they've incorporated some of the thinking. My goal is not chasing credit in this moment with that type of leader. My goal is what's best for the business. So I give that leader that space behind closed door to manage the insight which is my responsibility as an emerging leader in the organization to get done. I'll tell you this, this is a good example. So the company that acquired my company two years ago is called Workplace Options. So I'm finishing my earn out and all the good stuff and I report to Alan King, who is the president of this organization. Alan has a tremendous leadership story, but he's a very humble guy and doesn't want to be out in front of the brand. So I asked Alan privately, can I put some pressure on you to, to do this? Because your voice, your thought leadership will help us sell more. I had an ask and then I linked it to something he's asking of me, which is to sell more. He gave me permission to be more professionally assertive, which is why I'm talking about it now, which is why I talked about it in our senior level marketing meeting. But privately I advocated for a change. He gave me permission to be professionally persistent. And now I'm working with the team to work on that. Not so much a blind spot, but a new angle of opportunity to grow our revenue and grow our business. So those are some specific ways when you're dealing in environments, it's all not out in front some of it. You need to work behind closed doors with it. But I do think there are some techniques to help manage environments that are a little bit more top down than some of the entrepreneurial environments. Great follow up question. I super appreciate it. That's a good word. Sure is. All right, look, anybody that's been a longtime listener knows that I try to pin down our guest and try to get the real real out of them. I'm into it. And so my question to try to corner you, Donald, is man, you started off with your bio and in that bio is at least three sort of high growth situations, transitions, and then all the other great things you've done even since then. Could you share maybe a story or two for us that it was a good learning moment for you, whether it was super embarrassing or it was something that was a, you know, like an emotional or leadership inflection point that was meaningful. And I'm not looking to embarrass you, of course, but, boy, if you want to embarrass yourself, people love that stuff. Well, I will tell you, I'm hard to embarrass, and I've got one for you that I think will resonate with your audience. I talk a lot now about inclusive leadership in employee engagement. I mentioned I was son of a football coach, Division 1 athlete. I had a pretty hard edge when I was in the sales game in technology. Get the money, make the quarter, kick down the door if you have to, if you want to do drinks. But either way, we need to get this PO signed, that mindset and mentality. So as I was growing and leading companies, my turnover numbers were not good. I was burning people out, burning them out. And I had a leadership coach. His name's John Murphy and he's based out of France and just a global leadership coach. And I couldn't even afford him. And I met him through a friend of a friend. And so he gave me a couple of sessions and we bartered on some things. And he said, don, you've done well by most standards. What could you be if you had a more empathetic leadership style that allowed more people to relate to you versus just the hard charging high achievers? And that conversation, that he delivered truth to me with compassion in a way that I could understand it. Ten years ago, I began my journey to be a more thoughtful, empathetic leader without lowering the standard of excellence that is required to survive in tough economic times and growth. And so I will tell you, and one of the things I've learned, and I have scar tissue, is because I was not that leader that I would admire at the level that I wanted to be. When I really unpacked what he was describing, when I really unpacked some of the feedback that I'd been given, that was true. And I had to decide whether I was just going to rest on the results that I had achieved, which were reasonable or did I want to be elite. And when you are an elite leader, an elite performer, then that means there's always more to grow, learn and improve. And I decided to go on a journey of being an elite performer. And now my goal and what I focus on in companies I build is how can I be an empathetic leader that drives standard at a high level, that is a global representative of the organizations I work but still keep a people first mindset. And so it's embarrassing where I was, I'm super proud of what I've become. Great. Sometimes I would have to say that a lot of my learning inflection points started off with, boy, that was embarrassing. I mean, if you're just honest about it, right. I mean, you learn by stuff going well, but you really learn by screwing stuff up. And the trick is, you know, I think as a leader myself, you've got to try to create environments where people have enough room and opportunity to grow, make some mistakes without getting outside the guardrail, but really causing problems. Right. And I kind of hear that's what you're saying is you got an empathy for people, but you got to give them the ability to make some mistakes. That's how they grow. And I guess everybody has sort of different definitions of engagement, but I've had a lot of success with people engaging, feeling engaged when they feel like they had agency to try something. And no, they're not going to get hammered if it doesn't go exactly perfect or it's a mistake or it's not a rabies success. So on that, you've got another book coming out here in February, which right around the corner, we're filming this in towards the end of January for those of you listening when it comes out. But you've got a new book coming out here soon. Would you give us a little bit of snapshot of that and tell us launch date and all the exciting things around it? Yeah, I really appreciate it. So it's the employee Engagement handbook. It's the name of the book. So simple and clear and one of the things our team built. I'm currently the managing director for the center of Organizational Effectiveness at Workplace Options, which is the firm I'm a part of. And we build an employee engagement growth model that really focuses on the critical elements that drive employee engagement. And I'll focus on one that I think will resonate for the audience and then I'll give the details in the book. We want to build trust and loyalty. So a lot of times we talk about engagement, we think about productivity, innovation and all these talent turnover things, these kind of metrics that you can drive. But when you have loyalty, that means when your team sees you doing something that isn't quite right, when they see others that are not behaving in a way that represents the business well, that loyalty kicks in and they can't sit silent. And so there's different levels of engagement that we talk about in this book. But what are we as business leaders really trying to create? That you trust me enough on our team that you're going to tell me what I need to know, whether I like it or not, because that's what's best for the business. And you know, at my core as a leader that I want you to be well and to do well, and we want the business fiscally to do well, so it protects all of us. The other thing that we're doing in the book is we're very practical and we use a lot of use cases. A lot of times people are very academic and theoretical and, and I write the way that I teach and coach, and I like to use case studies and scenarios and blueprints where people aren't going to agree with every single thing in the book. But if you read the book and take two or three things that change your leadership style in a meaningful way, then that's going to be a win because we're all on that paradigm together. And so the book comes out February 20th, be available on Amazon, it'll be available anywhere that you get books. And then we'll work on the audiobook shortly after. And then you can easily connect with me on LinkedIn and I can give you a link to all the different things. But I appreciate you giving me a chance to describe it. And the last thing that we cover in the book that I think is germane for your audience is how does AI start to impact culture and performance? When we think about employee engagement as a static term, then we can have some academic things that we talk about. We think about it in terms of the age of AI. We have to think about employee engagement as a dynamic way of thinking about growing our business. Because AI has changed everything. And AI is not the technology it is about. How do we adopt this technology in a manner that doesn't create fear, but creates enthusiasm and opportunity to have a better, more profitable future? How to grow your organization with 30% less headcount versus thinking about losing 30%. Why not, as a CEO, say we're not looking to change the job structure, but we don't want to add headcount at the same rate. That's a very different mental model to describe employee engagement with the new tsunami of tools, which is AI. And so I look forward to folks getting a chance to read it. But it's similar to our conversation here in that we use real live use cases to make a couple of key points in terms of how to build that winning organization. Well, Donald, I talk to leaders all the time. And I read about this topic and everybody seems to be struggling, particularly with engagement around AI and what does it mean. So you heard it here, folks. February 20th. Go pick up a copy of the Employee Engagement Handbook by Donald Thompson and learn how to fix it, how to solve for it. Well, look, Don, I really appreciate you carving out some time for us and really appreciate the insights. Look forward to your book coming up. And if anybody else wants to just check in on you and engage with you, what's some other ways they might be able to do that outside of the book? Yeah, LinkedIn is great. I'm super active on that as a platform. My meter's not always running, so I always answer a question or two for folks about topics because that helps me inform what I write and what I teach about. So that's number one. And you can go to donaldthompson.com is another way that you can catch up with me and keep it moving. So those are the two main ways. And I'm always available for a virtual cup of coffee. Well, thank you again for your time and wish you all the best on here in 2026 and look forward for the book launch. All right, my friend, thanks for having me. I really appreciate it. If you're ready to make better leadership decisions and avoid the costly ones, subscribe to from the Top with Chad Hesters on Apple, Spotify or wherever you get your podcasts. Until next time, thanks for listening.