PhD Analysis Chapter Sample: Leadership Strategies for Fostering Psychological Safety and Innovation in Hybrid Work Environments: The Case of EU Software Start-Ups
Analysis
This analysis chapter presents the findings from 25 semi-structured interviews conducted with founders, team leaders, and software engineers from 13 early-stage start-ups in Amsterdam, Barcelona, Berlin, and Stockholm. The qualitative data reveal a complex interplay between leadership practices, formal and informal communication patterns, and power and social dynamics in hybrid-work teams. The analysis has been organised into emergent subthemes presented below.
Subtheme 1: Intentional Facilitation Contributing to Inclusive Hybrid Work Dynamics
One of the dominant findings evident across multiple interviewee responses was the fact that psychological safety in hybrid settings did not occur on its own. The respondents praising their workplaces in this sphere generally reported strong, thoroughly coordinated, and consistent facilitation efforts on the part of their leaders. As noted by some interviewees, one of the widespread problems in hybrid teams was ‘elitism’ associated with different attitudes towards in-office and remote employees.
During our meetings, 80% of the talking was done by our in-office colleagues, while we mostly received orders and presented the results of our work like remote freelancers. We had limited influence on daily SCRUM conversations and goal-setting.
On the contrary, interviewees from teams reporting higher levels of psychological safety noted that their leaders engaged everyone in discussions and made remote employees feel like active members of all interactions. As noted by a team lead from Berlin,
We have a strict ‘one remote, all remote’ rule in our teams that was introduced by the management several years ago. This ensures that all interactions occur in a one-on-one manner rather than individual remote workers vs a joint call from the main office. Every discussion member joins from their own laptop, which levels the playing field immediately. We even use headphones or try to use different rooms to make everyone feel equal and on the same page. (Interviewee 3)
This practice can be traced back to the first research objective (identifying leadership behaviours) since it reflects specific tangible strategies used by start-up leaders to create equitable inclusion and a sense of psychological safety. It also prevents the in-group/out-group dynamic mentioned earlier by Abrams and Lalot (2025) and Bula et al. (2024). With that being said, other reported practices also involved the facilitation of individual voice and representation. As shown by the following quote from a software engineer at a Stockholm-based fintech start-up, their manager proactively created space for new and quieter team members,
Our team lead has a habit of not closing the agenda of daily Agile meetings without hearing from every team member. They “ping” those who have not spoken yet and ask for their opinions and thoughts on the discussed topic. At the same time, this is done in a very polite and inviting manner, not to make them feel stressed. Since I know that I will be asked to share my opinions and thoughts anyway, I get ready for this and speak up much more than I did at my previous job. (Interviewee 6)
Subtheme 2: Leader-Modelled Vulnerability as the Catalyst for Innovation and Risk-Taking
In addition to the facilitating structures discussed in the previous theme, interviewee statements suggest that the leaders’ willingness to demonstrate their personal vulnerability acts as a powerful catalyst for creating a psychologically comfortable environment promoting innovation. These findings can be related to the second research objective exploring causal pathways to innovation, since willingness to take risks and accept failure was associated with innovative behaviours by such authors as Kyambade et al. (2024) and Srirahayu et al. (2023). Multiple interviewees drew a clear differentiation between leaders voicing these ideas formally and the ones who were personally willing to show their mistakes and vulnerabilities to their subordinates.
At one of the weekly meetings, our CTO noted their sub-optimal architectural decision leading to the loss of approximately two weeks of teamwork. Instead of hiding it, they openly admitted their mistakes during a full team meeting, discussed the flaws in their reasoning, and explained what they had learned from these mistakes. I personally sat in sheer awe when I realised that this practice was normal for all members of this group. They saw their own mistakes as “learning material” for others, helping them analyse their failures, learn from them, and get better to avoid such flaws. After that, I felt more comfortable with taking risks and flagging potential problems to discuss with my colleagues. (Interviewee 5)
This openness was evident in both work-related technological discussions and the discussions related to the hybrid work itself. For example, the following quote from a founder of a start-up from Amsterdam demonstrates their openness to experimentation and the permission to make mistakes and learn from failures.
I openly tell my team that I am also figuring out this hybrid thing. Hence, I ask them to immediately inform me if some new policy is not working for them. Last month, we cancelled or shifted some mandatory in-office days since multiple team members told me that the existing schedule disrupted their workflow. By showing that I have no clear-cut answers but I am open to discussion, I can feel that I encourage them to bring more ideas and experiments to the table.
In some aspects, this approach aligns with transformational leadership, where powerful leaders are not afraid of demonstrating their authenticity and showing trust in their followers (Saif et al., 2024). In line with the earlier-discussed research question, this modelled vulnerability creates a sense of safety in other group members and encourages them to be more innovative in different spheres.
Subtheme 3: Deliberate Structuring of ‘Exploration’ versus ‘Exploitation’
The third emerging subtheme is directly associated with the strategic leadership challenge of managing tension between the focused execution that is required for product delivery and the creative and unstructured thinking required for innovation. This exploitation versus exploration controversy can be linked with the earlier-discussed concept of ambidextrous organisations mentioned by AlKhamees and Durugbo (2024) and Babu et al. (2024). In line with their findings, hybrid work can become the line separating these two dimensions, where out-of-office time starts to get viewed as free work time by some employees, which can have both positive and negative implications.
We were gradually succumbing to the highly structured scheme where in-office days were strictly organised around daily scrum goals. This transformed 100% of our work into a marathon where back-to-back meetings occurred almost on a daily basis. While this allowed us to close some short deadlines mechanically, the overall psychological climate was quickly deteriorating, with people starting to consider alternative jobs or simply follow the formal rules only, without bringing new ideas to meetings. After we changed this routine to ‘no-meeting Fridays’, this started to change. Personally, I spend a large share of my Friday time learning new technologies and analysing my weekly results. This helps me maintain a larger strategic project perspective more effectively. (Interviewee 10)
As opposed to formal and obligatory in-office celebrations, this approach demonstrates that innovation requires a protected, safe space to occur (Kousina & Voudouris, 2023). Another example of such a strategy structuring exploration and exploitation was provided by a software engineer from Barcelona,
We have monthly voluntary meetings organised by the management. They provide food and drinks and allow us to informally present any crazy ideas, pet projects, or new suggestions. There are no obligations; you can avoid these meetings completely. There is no formal agenda or presentation format. However, I can remember at least five product features we introduced that were originally conceived or discussed during these meetings. So, everyone knows that they can bring real ideas, see them supported and implemented, and get rewarded for them with real money as a finder’s fee afterwards. (Interviewee 13)
As shown by the quotes above, this practice contributes to both innovation and psychological safety perceptions. As employees see more freedom with work organisation structures being decoupled from short-term performance metrics, they find it easier to generate new ideas and experiment with their workflows without feeling continued pressure or seeing immediate risks to such behaviours.
Discussion
The analysis of leadership practices within EU software startups has revealed several key findings related to both the hybrid environment in these organisations and leadership strategies used by their leaders. The first one was the understanding of psychological safety as a group-level phenomenon characterised by the shared belief in the ability of each member to take interpersonal and work-related risks. In line with Edmondson (1999), the analysis shows that the hybrid environment may complicate the formation of such beliefs due to the physical distance between team members. In this scenario, the desired workplace behaviours cannot be expected as an inevitable outcome but must be proactively and consistently promoted, shaped, and reinforced by leaders as facilitators (Delany, 2022; Maurer et al., 2022). These interventions can be recognised in the reported behaviours, such as “one remote, all remote” rules and the solicitation tactics engaging silent and reserved participants. Within the scope of Edmondson’s psychological safety ideas, this could be characterised as “inviting participation” and “setting the stage”.
It can also be assumed that the hybrid context increases the need for such interventions on the part of organisational leaders due to the greater physical and psychological distance between in-office and out-of-office team members (Marstand et al., 2025). This separation can substantially shift dynamics between workers, which makes leadership omissions especially damaging and evident. The inability of managers to facilitate open communication can lead to fractures in shared beliefs and behaviours (Burbano & Chiles, 2022). Hence, the findings suggest that psychological safety and innovation in hybrid work settings must be ensured via leadership orchestration, promoting equal interaction rituals, inclusive participation, and willingness to take risks. In light of the first research question, these results highlight the idea that leaders can cultivate a positive workplace environment via meticulous facilitation strategies (Costin et al., 2023). This partially overlaps with the second subtheme discussed earlier, implying that the demonstration of vulnerability acts as a powerful way of indirectly promoting psychological safety and innovation.
This modelled vulnerability represents a strategic leadership tool accelerating the innovation process (Johns, 2024). Within the scope of the second research objective, it is represented not as a weakness but as a tool normalising risk-taking and failure in a certain workplace environment. As a result, other employees accept fallibility and become more willing to share ideas, experiment with challenging concepts, and engage in learning and innovation activities. The readiness of leaders to openly accept their gaps in knowledge and skills also normalises the open acceptance of problems (Gifford, 2022). As shown by several interviewees, this reduces the scope of resulting adverse outcomes, elevates the maturity of followers, and helps them discuss their challenges with other team members to cooperate and find new and innovative solutions to them. These behaviours can be especially beneficial in the case of start-ups relying on the initiative of team members as a crucial growth factor. In line with transformational leadership principles, such leaders have a greater chance of building teams showing consistent innovation and capable of acting with high levels of autonomy.
Finally, the findings of the third subtheme make a significant contribution to the understanding of the organisational ambidexterity theory (Leonardi et al., 2024). This concept is traditionally focused on the use of separate structures for exploitation and exploration in large organisations. The current study expands this knowledge with evidence from smaller start-ups experiencing inherent resource constraints. As implied by the findings, they achieve ambidexterity through different strategies in the case of hybrid work arrangements (AlKhamees & Durugbo, 2024). According to the interviewees, in-office activities become the focal point for exploitative activities involving meetings, scheduled tasks, and strict synchronisation. On the contrary, remote days are generally associated with individual tasks involving minimal external management. As a result, the two spheres overlap and create a cross-pollinating effect when “no-meeting Fridays” or informal ideas presentations are seen as ground for innovation (Morrison-Smith & Ruiz, 2020; Yang et al., 2022). In light of the third research objective, this represented the strategy where the two environments were organised in a way that promotes ambidexterity and leveraging both of its dimensions in a way that stimulates both efficiency and innovation.
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