Exploring the relationship between trust, weak ties and innovation

2. If innovation is the top priority –
why are so many companies bad at it?
• Most CEOs don’t understand what innovation is
• Most organizations don’t measure it
• Most leaders don’t realize they limit innovation
• Most people don’t comprehend what to change

3. Innovation is about changing
• Your products, customers and your business models
• Your people, distributors and your supply chains
• Your culture, attitude to risk and your processes
• Your partners and your partner relationships
• Your behaviors and your decisions

4. Trust, weak ties and innovation
Dr. Andrew Maxwell
Associate Professor, Entrepreneurial Engineering
Director Bergeron Entrepreneurs in Science & Technology
Lassonde School of Engineering, York University
Chief Innovation Officer, Canadian Innovation Centre

5. Changing organizational design necessitates
• 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, organizations
Granovetter, 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

6. Characteristics of innovative organizations
• Decision processes are faster, and accountability is
spread through organization
• Organizational culture incents risk taking,
experimentation and a portfolio approach
• 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

7. Relationship Trust:
“..willingness to be vulnerable to actions of another party,
without direct means of controlling their behaviors”
• Reduces 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

8. Relationship Trust:
“..willingness to be vulnerable to actions of another party,
without direct means of controlling their behaviors”
• Reduces 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

9. Importance of weak ties
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’
• Difficult to participate in standard agreements
• Outcomes from relationship difficult to quantify or
predict

10. What they don’t teach you in business school
• Standard approach is to minimize risk, without asking:
• What are risks of delaying, or not making, a decision
• What are the costs of managing relationship
• Expensive to include all possibilities in contract
• Contracts to manage process - timely and expensive
• Alternative - use trust… but not a skill we develop:
• How do you decide who to trust, and how much?
• How do you persuade them to trust you?
• Requires understanding of trust development process
• Relies on personal development skills

11. Trust development process
• Trust evolves due to individual behaviors influenced by:
- Individual personality; previous relationship experience
- Corporate culture, processes and organizational design
• Manifestations of specific behaviors influence trust:
- One party displays trust behavior, reciprocated by other
- Each behavioral manifestation audited by other party
- Specific trust behaviors build, damage or violate trust
• Achieving specific trust levels enables relationship
• Damaged or violated trust can destroy relationship
(although damaged trust can be repaired)

12. Level of trust changes over time
Knowledge
based trust
Competence
based trust
Lewicki and Bunker (1995)
Identification
based trust

13. Types of trust behaviors
Trustworthy Capable
Trusting Communicative

14. Types of trust behaviors
Consistency
Benevolence
Alignment
Competence
Experience
Judgment
Trustworthy Capable
Disclosure
Reliance
Receptiveness
Accuracy
Explanation
Openness
Trusting Communicative

15. Behavioral manifestations that build trust
Trust 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
change
Trust 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 change
Communication
Accuracy Provides truthful and timely information
Explanation Explains details & consequence of information provided
Openness Open to new ideas or new ways of doing things

16. Organizational Trust Diagnostic
Trust 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
Example:
BENEVOLENCE
Example:
ALIGNMENT
Showing inconsistencies
between words and actions
Demonstrating self-interest
ahead of others’ well-being
Exhibiting behaviours that are
inconsistent with declared values
Example:
Would you be willing to be contacted so that we can do further research on this topic? YES/NO Andrew Maxwell
©

17. Organizational Trust Diagnostic
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
Example:
EXPERIENCE
Example:
JUDGMENT
Showing a lack of context-specific
ability
Relying on inappropriate
experience to make decisions
Relying inappropriately on third
parties or erroneous information
Example:
Would you be willing to be contacted so that we can do further research on this topic? YES/NO Andrew Maxwell
©
Trust Dimension: CAPABILITY

18. Organizational Trust Diagnostic
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
Example:
RELIANCE
Example:
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
Example:
Would you be willing to be contacted so that we can do further research on this topic? YES/NO Andrew Maxwell
©
Trust Dimension: TRUSTING

19. Organizational Trust Diagnostic
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
Example:
EXPLANATION
Example:
OPENNESS
Unintentionally misrepresenting
or delaying information
transmission
Ignoring requests for
explanations
Not listening or ignoring new
ideas
Example:
Would you be willing to be contacted so that we can do further research on this topic? YES/NO Andrew Maxwell
©
Trust Dimension: COMMUNICATIVE

20. Research Project
• Now working with teams in global organizations to:
• Identify innovation challenges
• Audit trust behaviors
• Analyze how trust behaviors damage innovation
• Prescribe remedies
• Intent is to publish tools, examples and remedies
that can be broadly applied
andrewmaxwell@lassonde.yorku

21. Becoming
Innovative
One Behavior
at a time