trust and weak ties
TRANSCRIPT
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 WARNINGTRYING 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 ties
Changing how individuals in organization behave
Weak ties recognized as a source of innovation
Although traditional innovation sources important, new sources of innovation are increasingly significant:
• Organization designed to leverage extant relationships; unintentionally discourages developing new internal and external relationships
• Reliance on traditional relationships (strong ties) and formal procedures (i.e. contracts) limits collaboration, speed, and experimentation
• Company designed to discourage risk taking. Individuals don’t know how to develop strategic relationships or make/mitigate, risky decisions
• Current organization practices make it difficult to establish and sustain (weak tie) relationships with new sources of innovation
Our approach helps identify current organizational constraints and suggests alternate approaches
Changing your organization’s design to facilitate higher rates of innovation
Traditional sources of external innovation are managed by contracts that: • Introduce controls on the behaviors of each party
• Provide incentives linked to performance and outcomes
• Introduce transaction costs and time delays
A reliance on contracts and formal procedures means that individuals are not equipped to manage the type of informal relationships with innovative organization, characterized by: • Experimentation and incomplete contracts
• Less formal or newer organizations with a limited track record
Trust can be a proxy for control, and offers an alternate approach to mitigating relationship risk
Managing relationship risk through trust rather than control
Characterized by:
• Close working relationships
• Frequent communication
• Co-ordinated
management
• Aligned objectives
• Overlapping knowledge /
experience
Strong ties traditional source
of innovative ideas and
validation.
Importance of weak TiesCharacterized by:• Informal relationships• Infrequent communication• Limited co-ordination of
objectives• Complementary knowledge
/experience
Weak ties becoming increasingly important source for innovation.
Innovative companies with weak ties tend to be smaller and newer. Difficult for them to follow standard approach for partnerships.
• 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 behaveKotter, 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 behaviors
High 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
Consistency
Benevolence
Alignment
Competence
Experience
Judgment
Disclosure
Reliance
Receptiveness
Accuracy
Explanation
Openness
Dimension Trust building Trust damaging Trust violating
Tru
stw
ort
hy Consistency
Displays 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
Cap
abili
ty 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
Tru
stin
g
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
Co
mm
un
icat
ion
AccuracyProvides truthful and timely information
Unintentionallymisrepresents 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 damaging
Tru
stw
ort
hy Consistency
Displays 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
Cap
abili
ty 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
Tru
stin
g
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
Co
mm
un
icat
ion
AccuracyProvides truthful and timely information
Unintentionallymisrepresents 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 building
Tru
stw
ort
hy Consistency
Displays of behavior that confirm previous promises
BenevolenceExhibit concern about well-being of others
AlignmentActions confirms shared values and/or objectives
Cap
abili
ty CompetenceDisplays relevant technical and/or business ability
ExperienceEvidence of relevant work and/or training experience
JudgmentConfirms ability to make accurate and informed decisions
Tru
stin
g
DisclosureShows vulnerability by sharing confidential information
RelianceShows willingness to be vulnerable through delegation
ReceptivenessDemonstrates ‘coachability’ and willingness to change
Co
mm
un
icat
ion
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 community
http://tinyurl.com/ldd87ry
Becoming
Innovative
One Behavior
at a time