How Psychodynamics Can Enhance Your Company's Performance and Profits

This quick read article presents a different and proven way of thinking about how to improve executive and top team performance, and make change stick.  Implementing the described approach can improve your company’s performance and profits, and help ensure marketplace success. 

Are you investing in failure?

Companies want great leaders and teams, particularly at the top of their organisation for the simple and sound reason that great leaders and teams drive company profits.  There’s research to back this up, for example:

A study of 120 public companies, found that the quality of team members accounted for 20% of their firm’s profitability, but the top team’s effectiveness can have a 400% bigger impact on profits than any one executive can have. (after Solange Charas)

But as Stanford Professor, Jeffrey Pfeffer notes in his book Leadership BS companies waste tens of thousands and often millions each year as the current approaches to leadership and team development rarely produce the desired results.  Some achieve marginal gains but then people go back to their old ways.  The majority of firms today are investing in failure.

Think of the books you may have on topics such as servant leadership, authentic leadership, inspirational leadership or the latest fad, mindful leadership.  Most have some useful tips but few create lasting change.  The book titles can be very enticing however often there is no rigour to the foundations of their propositions and they are frequently just platforms for an aspiring guru to launch their career.  In fact it could be argued by a (moderate) cynic that some firms that fully embrace ‘mindfulness’ do so in an attempt to cure their own less than healthy culture, an approach that will likely fail unless they get to the root cause of their cultural problems.

Why commonly used approaches fall short

They fall short for three key reasons:

One: They assume our behaviour is driven by rational thinking.  But we are not rational.  As I shared in my Harvard Business Review article, What CEOs Are Afraid Of there are a great number of forces that drive our behaviour and the most significant being our personal fears and these in-turn cause dysfunctional behaviours to emerge that stifle performance.

Two: Much of what drives our behaviour is outside our conscious awareness.  For example as I described in my Harvard Business Review article,  The Family Dynamics We Grew Up With Shape How We Work there are a great number of deep seated and hidden drivers of our behaviour that most leaders are unaware of: from how our assumptions and judgements have been shaped through to our repeated patterns of behaviour in team (and personal) relationships.

Three: To change behaviours we need to move beyond giving tips and techniques but look deeper at what is driving the behaviour that needs to change.  For example, we could just give a micro-manager tips on how to delegate better but these won’t change their behaviour.  However, if we explore a little deeper we could find that their behaviour is possibly driven by a fear of letting go & losing control, and if this is the case, then these are the themes we need to work with to make change stick.

The majority of those who try to make change happen look at conscious behaviours such as emotional intelligence,  performance models and ethics.  All these themes are very important.  However, if you want lasting change you are likely to be better served by working with the subconscious drivers of behaviour.

The psychodynamic approach

Even just the word psychodynamics can be enough for some people to conjure up thoughts of a psychotherapists couch or incomprehensible psychobabble language.  But these people are probably unaware of how psychodynamics is used as the preferred method to enhance the performance of managers, executives and top teams in many leading firms. 

In the psychodynamic approach to working with leaders and top teams we work safely with the often irrational and hidden subconscious drivers of behaviour.  The psychodynamic approach takes into account:

  • Our behavioural patterns are driven by the “inner theatre” of our mind who’s script was written by all those people who influenced us and our experiences, particularly those in our early life.
  • We all, even the most rational leaders, have ‘blind spots’ and a shadow we cast over our teams and organisation.
  • We each develop our own unique relationship patterns that affect how we interact with others.
  • How we express our emotion has a significant impact on others.

Psychodynamics at work

Let’s look briefly at a practical example of how psychodynamics can be used to enhance a company's performance and profits through the lens of a top team initiative.

The chief executive's view: Dominic (not his real name) is the chief executive of a large engineering firm.  He was appointed a few months before we first met.  During our initial discussion about his senior leadership team he expressed the types of frustrations and issues that I find in many top teams such as a lack of honest conversations, silo thinking and various degrees of contribution to company wide initiatives.  Dominic thought their performance as a senior leadership team was below par and wasn’t convinced they were all aligned to the strategy.

We agreed to move forward with a customised programme that had the objective of creating a high-performing top team that 'clicks' and is fully aligned to their strategy.

Highlights of the programme include:

An initial diagnostic phase:  This served the purpose of understanding the current drivers of the teams dynamics, establishing a baseline for future performance, identifying individual challenges that might influence their performance, and the performance of the team.  This also importantly helped get buy-in from the team so they felt ownership of the process and they could see the practical benefits as a ‘double-task approach was adopted’ by blending in the clinical psychodynamic work with the team's primary purpose of implementing strategy.  I also regard this initial phase as ‘marinating’ the team, i.e. getting their minds in the right place for the top team event.

The diagnostic phase revealed rich information including:

  • The lack of diversity in thinking patterns in this male dominated group.  Observing an executive team meeting showed distinct signs of group think.  Overall team members were highly rational, seemingly competitive, reluctant to openly express their emotions and fairly tough-minded.
  • Analysis of the Team Climate Survey™ (a Vantage Hill Partners proprietary tool) provided hard proof for future discussion on themes such as their openness to change being on the low side, not really valuing individual differences, mediocre levels of trust in the team and low levels of open & direct conversations.  It was no surprise with this particular team that there was disagreement around parts of the company strategy and their purpose as a top team.

The top team event:  The event was designed to facilitate open-dialogue in a non-confrontational manner to create trust and lower personal defences. For this particular team the workshop was over 2-days and broadly on the first day we unwrapped individual and team behaviours so they could start to see why they and their colleagues currently do what they do.  Themes we explored in exercises included:

  • how their early life story had shaped their leadership behaviour.  This also helped build intra-team trust through self-disclosure.
  • we looked at the blockers to effective performance such as the types of social defence mechanisms and how they develop into dysfunctional behaviours, judging mindsets, the psychological downsides of top leadership roles and social loafing.  

Late morning on day 1 ‘aha’ moments occurred when they felt able to self-diagnosed some of their own and the teams behaviours.  For example, one highly experienced director realised how his feeling of being an impostor (as if he didn't deserve his senior role) were even today holding him back; and as a result of one discussion it dawned on the team that the previous chief executives legacy shadow was still influencing their behaviours (he apparently had a strong 'command & control' style).

It is always interesting to observe ‘how' what is said in discussions and ‘what people don’t say’ is often more revealing than what people 'actually do say'. And when people give feedback to others, often the feedback reveals more about the person giving the feedback than about the person on the receiving end.

By day 2 it was felt the team had been sufficiently 'softened' and prepared for a more creative free drawing exercise that brings to the surface what they each really think about the company strategy and their role within it.  It’s a well thought through exercise in which their inner thoughts are openly expressed and shared. I love it as it always yields a healthy discussion.  Drawings included a lone individual on a complex roller coaster ride, a heroic looking figure striving forward (a bit like a hero in a former Soviet era propaganda poster), a group of people walking up a steep hillside in a storm on a dark evening and a team of rowers in perfect unison.  The subsequent discussion also surfaced intra-personal challenges we talked through and resolved.

For this team I allocated time for them to agree their purpose as a team and their guidelines for performance & behaviour.  With the day wrapping up with each team member creating and sharing their own action plan based on feedback they had received over the 2 days.

Embedding change in the top team:  To embed the new behaviours and ways of working we continued working together with a mix of individual coaching programmes for selective executives to resolve specific challenges, what we term Fast-Track sessions that take the ‘double-task’ approach, i.e. working on solid and healthy dynamics of a working process within the team whilst also working towards concrete strategic priorities that generate robust results and a 720-degree group feedback session with the team.   The methodology was kept flexible to help deal with unforeseen strategic challenges.

The result:  The level of open conversations and trust increased to a level not seen before, collaboration started to occur almost immediately after the initial top team event and people were ‘singing from the same hymn sheet’ when it came to alignment with their strategy.  Although it would be great to say it was solely this work that directly resulted in their over 15% year-on-year profit enhancement in a challenging environment, this would be hard to claim as there were other factors that led to their ongoing healthy performance, in addition to our top team effectiveness initiative.

Barriers to adopting a psychodynamic approach

Like all proven solutions that haven't previously been adopted by a company there can be some challenges when first harnessing a psychodynamic approach, such as:

The chief executive:  The chief executive casts a shadow over their organisation, often positive but sometimes less so.  My hunch is that many resist this deeper, more thorough work with say their top team as they are aware that it may be their own behaviours that are the problem.  However, those chief executives with a higher level of self-awareness and openness are receptive to an approach that helps make change stick.

Psychobabble language:  Like all trades those who practice the psychodynamic approach have their own language, their own buzzwords such as social defence mechanisms, team reflexivity, possible selves, listening with your ‘third ear’, transference, above-the-surface or day vision and below-the-surface or night vision.  The key as a practitioner is to avoid using jargon and instead speak in everyday language and use mini-stories & analogies to illustrate a term or phenomenon.  Though often people become intrigued when they have personal ‘aha’ moments and want to learn more themselves.

Few consultants with the relevant know-how:  This is a challenge, and there even fewer consultants with previous senior-level business experience who can work on business themes such as strategy and at the same time work with the team’s dynamics.  INSEAD is the only business school that develops practitioners in psychodynamic approaches to business through its Masters degree programme in Consulting & Coaching for Change.  Vantage Hill Partners consultants have this qualification together with relevant business experience.

The Chief HR Officer:  They are not necessarily a barrier but they are busy people and for some it is easier to keep with traditional sub-optimal approaches as we can all sometimes be a little resistant to change.  However, their interest is typically sparked once their awareness of psychodynamic approaches has increased through a seminar, such as the Vantage Hill Partners’ talk Why We Do What We Do that looks at the topics shared in this article.

Concluding comments

I am not claiming that the psychodynamic approach is the panacea to all leadership ills and company problems but if you want a new lens to look at behaviours, make change stick, create more effective leaders and high performing top teams then it will likely serve you well.

I’ll be happy to answer any questions you may have and / or review how you can best adopt a psychodynamic approach in your organisation, whether it's developing more productive leaders or top teams that click.  Tap here to make contact.  We work worldwide.


Charas, S. (2013), Enhancing firm profitability by improving director dynamics. Case Western Reserve University  

Pfeffer, Jeffrey (2015), Leadership BS, publisher HarperBusiness

Roger Jones' Harvard Business Review articles (2015 & 2016): What CEOs Are Afraid Of and The Family Dynamics We Grew Up With Shape How We Work.

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