Why Too Much Trust Is Death to Innovation
When companies collaborate, low trust is detrimental to innovation. But so is very high trust. The optimal level, yielding maximum impact, lies in between.
The Smart microcar, invented by the tumultuous partnership between Daimler-Benz and Swatch, seems to be finally reaping the benefits of its provocative design as more consumers order this compact automobile. By contrast, the minivan codeveloped by Peugeot and Fiat (initially sold as the Peugeot 806 and the Fiat Ulysse) was the result of a harmonious relationship but never garnered much attention. It was just another minivan.
These outcomes contradict common sense as well as a large body of academic literature. The general assumption, after all, is that success grows out of good relationships — based on a common vision, cultural proximity, a sense of fairness and equity and, eventually, mutual trust — while poor cooperation and lack of trust lead to disaster. Yet examples abound of high-trust partnerships that fail to innovate and of turbulent ones that succeed. Admittedly, many factors influence the level of creativity and innovativeness of partnerships, and trust is only one of them. But it is deemed to be a central one.1
The Leading Question
Can very high trust between innovation project partners be too much of a good thing?
- Some kinds of conflict between collaborators can be good for innovation performance.
- While personality conflicts hinder innovation, conflicting opinions about tasks can spur new solutions.
- Trusting partners are more likely to commit the resources needed to implement jointly developed ideas.
Is trust in fact overrated? Is it sometimes an actual hindrance to innovation? Can we think in terms of an optimal level of trust — not too little and not too much?
Trust as a Critical Ingredient One party trusts another not only when he perceives honesty and an absence of opportunism but also when expecting that the other’s attitudes and capabilities will turn out as promised.2 For example, we need to trust that the plumbers repairing our bathroom will not overcharge us and that they have the required competencies — knowledge, acumen, equipment and supplies — to get the job done well and on time.
Trust is, above all, an interpersonal phenomenon. It occurs (or fails to occur) between individuals.
1. J.H. Dyer and N.W. Hatch, “Using Supplier Networks to Learn Faster,” MIT Sloan Management Review 45, no. 3 (spring 2004): 57-63; R. Gulati, “Does Familiarity Breed Trust? The Implications of Repeated Ties for Contractual Choice in Alliance,” Academy of Management Journal 38, no. 1 (1995): 85-112; and J. Hagedoorn and G. Duysters, “External Sources of Innovative Capabilities: The Preference for Strategic Alliances or Mergers and Acquisitions,” Journal of Management Studies 39, no. 2 (2002): 167-188.
2. F.D. Schoorman, R.C. Mayer and J.H. Davis, “An Integrative Model of Organizational Trust: Past, Present and Future,” Academy of Management Review 32, no. 2 (2007): 344-354.
3. A. Ariño, J. de la Torre and P.S. Ring, “Relational Quality: Managing Trust in Corporate Alliances,” California Management Review 44, no. 1 (2001): 109-131.
4. H.W. Chesbrough, “Open Innovation: The New Imperative for Creating and Profiting from Technology” (Boston: Harvard Business School Press, 2003).
5. M.J. Kelly, J.-L. Schaan and H. Joncas, “Managing Alliance Relationships: Key Challenges in the Early Stages of Collaboration,” R&D Management 32, no. 1 (2002): 11-22.
6. D. Littler, F. Leverick and D. Wilson, “Collaboration in New Technology-Based Product Markets,” International Journal of Technology Management 15, no. 1/2 (1998): 139-159.
7. K. Heimeriks, “Alliance Capability, Collaboration Quality and Alliance Performance: An Integrated Framework,” working paper 02.05, Eindhoven Centre for Innovation Studies, Eindhoven University of Technology, Netherlands, 2002; and T.E. Stuart, “Interorganizational Alliances and the Performance of Firms: A Study of Growth and Innovation Rates in a High-Technology Industry,” Strategic Management Journal 21, no. 8 (August 2000): 791–811.
8. Ariño et al., “Relational Quality.”
9. A.G. Robinson and S. Stern, “Corporate Creativity: How Innovation and Improvement Actually Happen” (San Francisco: Berrett-Koehler, 1997).
10. F. Bidault and M. Schweinberg, “Fiat and Peugeot’s Sevelnord Venture (A),” IMD case no. 3-0644 (Lausanne, Switzerland: IMD, 1996).
11. M.-H. Chen, Y.-C. Chang and S.-C. Hung, “Social Capital and Creativity in R&D Project Teams,” R&D Management 38, no. 1 (2008): 21-34; and D. De Clercq, N. Thongpapanl and D. Dimov, “The Role of Conflict and Social Capital in Cross-Functional Collaboration” (paper presented at the Fourth Workshop on Trust Within and Between Organizations, Amsterdam, Netherlands, October 2007).
12. A.C. Amason, “Distinguishing the Effects of Functional and Dysfunctional Conflict on Strategic Decision Making: Resolving a Paradox for Top Management Teams,” Academy of Management Journal 39, no. 1 (1996): 123-148; and K.A. Jehn and E.A. Mannix, “The Dynamic Nature of Conflict: A Longitudinal Study of Intragroup Conflict and Group Performance,” Academy of Management Journal 44, no. 2 (2001): 238-251.
13. P. Dussauge, B. Garrette and A. Dumont, “The Matra-Renault Espace Alliance and the European Minivan Market,” HEC Paris case study no. 397-025-1 (Paris: HEC Paris, 1997).
14. G. Le Cardinal, J.-F. Guyonnet, B. Pouzoullic and J. Rigby, “Intervention Methodology for Complex Problems: The FAcT-Mirror Method,” European Journal of Operational Research 132, no. 3 (2001): 694-702.
Robert Porter Lynch
Charles H. Green