Trust, weak ties and innovation

Dr. Andrew MaxwellAssociate Professor, Entrepreneurial EngineeringDirector Bergeron Entrepreneurs in Science & TechnologyLassonde School of Engineering, York University

Dr. Robert McNammeeAssistant Professor, Strategic ManagementManaging Director Innovation and Entrepreneurship InstituteFox School of Business, Temple University

Workshop activity:Becoming a trust auditor

• At the end of the presentation, you will understand:• Why trust behaviors are important for innovation• How to audit trust behaviors in others• How to identify trust damaging behaviors

• We will ask you to identify a trust damaging behavior you have observed in your organization

• We will then ask you to post the behavior and join a group to discuss how you can go about changing your organization to encourage more trust behaviors

CAUTIONARY WARNING

TRYING TO CHANGE BEHAVIORS IN YOUR ORGANIZATION CAN BE HARMFUL

TO YOUR CAREER

Increasing evidence that innovative companies are those able to build relationships with companies with weak ties:• Characterized by informality, infrequent

communications, and complementary knowledge• Limited track record reduces perceived ‘reliability’• Relationship outcomes difficult to quantify or predict• Current organization practices make it difficult to

establish and sustain relations with weak tiesChanging how individuals in organization behave

Weak ties recognized as a source of innovation

• Changing decision processes that led to prior success Christensen, C.M. (1997) The Innovator’s Dilemma

• Sourcing innovation from outside the organization Chesbrough, H. (2003) Open Innovation

• Partnering with smaller, less established, organizationsGranovetter, M. (1973) The strength of weak ties

• Modifying role of leadership to one of catalyzing and coaching

Hamel. G. (2002) Leading the revolution

• Changing how individuals in organizations behave

Kotter, J. (1985) Leading change, why transformation efforts fail

Changing organizational design necessitates

• Decision processes are faster, and accountability is spread through organization

• Organizational culture incents risk taking, experimentation and learning from failure

• Communication is accurate, timely and frequent• Information flows are two way, rapid and

transparent • Reliance on cross functional teams and

developing new relations with external partners • Relationships within the organization and with

partners embed higher levels of trust

What do innovative organizations look like?

Trust defined as willingness to be vulnerable to actions of another party, without direct means of controlling their behaviorsHigh levels of relationship trust:• reduce concerns about misappropriation or misuse

arising from knowledge exchange • accelerates knowledge sharing/absorption, enabling rapid

identification of relevant opportunities• reduces transaction and verification costs associated with

knowledge exchange• speeds relationship development by facilitating

incomplete contracts with multiple partners

Focus on behaviors that build Relationship Trust

• Most organizations have controls and policies that:• Delaying making a decision• Introduce delays and transaction costs• Make it challenging to work with new partners

• Most managers exert authority by:• Discouraging risk taking• Refusing to delegate

• Alternative is to rely on trust… but this is challenging:• Who should you trust, and how much?• When should you trust, and with what?• How do you persuade them to trust you?

How to develop relationship trust

• Trust evolves due to individual behaviors influenced by:- Individual personality; previous relationship experience- Management priorities, signals and examples- Corporate culture, processes and organizational design

• Specific trust behaviors influence relationship trust: - One party displays trust behavior, reciprocated by other - Each behavioral manifestation audited by other party- Specific trust behaviors build, damage or violate trust

• Relationship trust develops over time • Damaged or violated trust can destroy relationship

(although damaged trust can be repaired)

Understanding trust development process

Lewicki and Bunker (1995)

Trust level change over time: allows evolution of relationship

Knowledge based trust

Competence based trust

Identification based trust

Types of trust behaviors

Trustworthy Capable

Trusting Communicative

ConsistencyBenevolence

Alignment

CompetenceExperienceJudgment

Disclosure Reliance

Receptiveness

AccuracyExplanationOpenness

Behavioral manifestations that build trustTrust Dimensions

Trustworthy

Consistency Displays of behavior that confirm previous promises

Benevolence Exhibits concern about well-being of others

Alignment Actions confirms shared values and/or objectives

Capability

Competence Displays relevant technical and/or business ability

Experience Demonstrates relevant work/training experience

Judgment Confirms ability to make accurate and objective decisions

Trusting

Disclosure Shows vulnerability by sharing confidential information

Reliance Willingness to be vulnerable through task delegation

Receptiveness Demonstrates ‘coachability’ and willingness to changeCo

mmunication

Accuracy Provides truthful and timely informationExplanation Explains details & consequence of information providedOpenness

Open to new ideas or new ways of doing things

Trust DimensionsTrus

tworthy

Consistency Displays of behavior that confirm previous promises

Benevolence Exhibits concern about well-being of others

Alignment Actions confirms shared values and/or objectives

Capability

Competence Displays relevant technical and/or business ability

Experience Demonstrates relevant work/training experience

Judgment Confirms ability to make accurate and objective decisions

Trusting

Disclosure Shows vulnerability by sharing confidential information

Reliance Willingness to be vulnerable through task delegation

Receptiveness Demonstrates ‘coachability’ and willingness to change

Trust DimensionsTrus

tworthy

Consistency Displays of behavior that confirm previous promises

Benevolence Exhibits concern about well-being of others

Alignment Actions confirms shared values and/or objectives

Capability

Competence Displays relevant technical and/or business ability

Experience Demonstrates relevant work/training experience

Judgment Confirms ability to make accurate and objective decisions

Trust DimensionsTrus

tworthy

Consistency Displays of behavior that confirm previous promises

Benevolence Exhibits concern about well-being of others

Alignment Actions confirms shared values and/or objectives

Dimension Trust building Trust damaging Trust violatingTrustworthy

ConsistencyDisplays of behavior that confirm previous promises

Shows inconsistencies between words and actions

Fails to keep promises and agreements

BenevolenceExhibit concern about well-being of others

Shows self-interest ahead of others’ well being

Takes advantage of others when they are vulnerable

AlignmentActions confirms shared values and/or objectives

Exhibits behaviors sometimes inconsistent with declared values

Demonstrates lack of shared values and willingness to compromise

Capability

CompetenceDisplays relevant technical and/or business ability

Shows lack of context specific ability

Misrepresents ability by claiming to have non-existent competence

ExperienceEvidence of relevant work and/or training experience

Relies on inappropriate experience to make decision Misrepresents experience

JudgmentConfirms ability to make accurate and informed decisions

Relies inappropriately on third parties or erroneous information

Judges others without giving them the opportunity to explain

Trusting

DisclosureShows vulnerability by sharing confidential information

Shares confidential information without thinking of consequences

Shares confidential information likely to cause damage

RelianceShows willingness to be vulnerable through delegation

Reluctant to delegate, or introduces controls on subordinates’ performances

Is unwilling to rely on representation by others, or dismisses participation

ReceptivenessDemonstrates ‘coachability’ and willingness to change

Postpones implementation of new ideas or deflecting

Refutes feedback or blames others

Communication

AccuracyProvides truthful and timely information

Unintentionally misrepresents or delays information transmission

Deliberately misrepresents or conceals critical information

ExplanationExplains details / consequence of information provided

Ignores request for explanations

Dismisses request for explanations

OpennessOpen to new ideas or new ways of doing things

Does not listen or ignores new ideas

Shuts down or undermines new ideas

Impact of specific behaviors on relationship trust

Dimension Trust building Trust damagingTrustworthy

ConsistencyDisplays of behavior that confirm previous promises

Shows inconsistencies between words and actions

BenevolenceExhibit concern about well-being of others

Shows self-interest ahead of others’ well being

AlignmentActions confirms shared values and/or objectives

Exhibits behaviors sometimes inconsistent with declared values

Capability

CompetenceDisplays relevant technical and/or business ability

Shows lack of context specific ability

ExperienceEvidence of relevant work and/or training experience

Relies on inappropriate experience to make decision

JudgmentConfirms ability to make accurate and informed decisions

Relies inappropriately on third parties or erroneous information

Trusting

DisclosureShows vulnerability by sharing confidential information

Shares confidential information without thinking of consequences

RelianceShows willingness to be vulnerable through delegation

Reluctant to delegate, or introduces controls on subordinates’ performances

ReceptivenessDemonstrates ‘coachability’ and willingness to change

Postpones implementation of new ideas or deflecting

Communication

AccuracyProvides truthful and timely information

Unintentionally misrepresents or delays information transmission

ExplanationExplains details / consequence of information provided

Ignores request for explanations

OpennessOpen to new ideas or new ways of doing things

Does not listen or ignores new ideas

Dimension Trust buildingTrustworthy

ConsistencyDisplays of behavior that confirm previous promises

BenevolenceExhibit concern about well-being of others

AlignmentActions confirms shared values and/or objectives

Capability

CompetenceDisplays relevant technical and/or business ability

ExperienceEvidence of relevant work and/or training experience

JudgmentConfirms ability to make accurate and informed decisions

Trusting

DisclosureShows vulnerability by sharing confidential information

RelianceShows willingness to be vulnerable through delegation

ReceptivenessDemonstrates ‘coachability’ and willingness to change

Communication

AccuracyProvides truthful and timely information

ExplanationExplains details / consequence of information provided

OpennessOpen to new ideas or new ways of doing things

• Organizations develop acceptable normative behaviors• These behaviors are based on:• Examples of others in the organization • Policies and procedures• Incentives and rewards

• Individuals within an organization manifest consistent trust behaviors across multiple relationships:• Vertically and laterally• Strong ties and weak ties

Means when teaching you to become a trust auditor, you can identify examples from any relationship

Normative trust behaviors in organizations

Organizational Trust DiagnosticTrust Dimension: TRUSTWORTHY

Think about the behaviors of those in your organization with whom you have “weak ties”. Place an ‘X’ on the line to represent where you think their behavior falls on each trust dimension. Provide an example.

DISPLAYS OF BEHAVIORS THAT BUILD TRUST

DISPLAYS OF BEHAVIORS THAT DAMAGE TRUST

Confirming previous promises

Exhibiting concern about the well-being of others

Demonstrating shared values and/or objectives

CONSISTENCY

BENEVOLENCE

ALIGNMENT

Showing inconsistencies between words and actions

Demonstrating self-interest ahead of others’ well-being

Exhibiting behaviours that are inconsistent with declared values

Would you be willing to be contacted so that we can do further research on this topic? YES/NO Andrew Maxwell

Example:

Example:

Example:

©

Think about the behaviors of those in your organization with whom you have “weak ties”. Place an ‘X’ on the line to represent where you think their behavior falls on each trust dimension. Provide an example.

DISPLAYS OF BEHAVIORS THAT BUILD TRUST

DISPLAYS OF BEHAVIORS THAT DAMAGE TRUST

Displaying relevant ability

Providing evidence of relevant experience

Demonstrating accurate & well considered decisions

COMPETENCE

EXPERIENCE

JUDGMENT

Showing a lack of context-specific ability

Relying on inappropriate experience to make decisions

Relying inappropriately on third parties or erroneous information

Would you be willing to be contacted so that we can do further research on this topic? YES/NO Andrew Maxwell

Example:

Example:

Example:

©

Organizational Trust DiagnosticTrust Dimension: CAPABILITY

Think about the behaviors of those in your organization with whom you have “weak ties”. Place an ‘X’ on the line to represent where you think their behavior falls on each trust dimension. Provide an example.

DISPLAYS OF BEHAVIORS THAT BUILD TRUST

DISPLAYS OF BEHAVIORS THAT DAMAGE TRUST

Showing vulnerability by sharing confidential information

Showing willingness to be vulnerable through delegating

Demonstrating ‘coachability’ and willingness to change

DISCLOSURE

RELIANCE

RECEPTIVENESS

Sharing confidential information without thinking of consequences

Being reluctant to delegate, or introducing controls on

subordinates'’ performance

Postponing implementation of new ideas or deflecting

Would you be willing to be contacted so that we can do further research on this topic? YES/NO Andrew Maxwell

Example:

Example:

Example:

©

Organizational Trust DiagnosticTrust Dimension: TRUSTING

Think about the behaviors of those in your organization with whom you have “weak ties”. Place an ‘X’ on the line to represent where you think their behavior falls on each trust dimension. Provide an example.

DISPLAYS OF BEHAVIORS THAT BUILD TRUST

DISPLAYS OF BEHAVIORS THAT DAMAGE TRUST

Providing truthful and timely information

Explaining details and consequence of information

provided

Being open to new ideas or new ways of doing things

ACCURACY

EXPLANATION

OPENNESS

Unintentionally misrepresenting or delaying information

transmission

Ignoring requests for explanations

Not listening or ignoring new ideas

Would you be willing to be contacted so that we can do further research on this topic? YES/NO Andrew Maxwell

Example:

Example:

Example:

©

Organizational Trust DiagnosticTrust Dimension: COMMUNICATIVE

Nest step: creating a multi-company study• Now working to identify teams in global organizations

interested in changing their rate of innovation:• Identify innovation challenges• Audit trust damaging (and building) behaviors• Analyze root cause of these behaviors• Prescribe specific organizational remedies

• Provide an analysis of team/company specific actions• Offer 2 day workshop to share outcomes and results• Publish tools, examples, and recommendations that

can be shared with the IRI communityAndrew.maxwell@lassonde.yorku

http://tinyurl.com/k2jzag5

Becoming Innovative

One Behavior at a time