IRI Research on research presentation

1. Trust, weak ties and innovation
Dr. Andrew Maxwell
Associate Professor, Entrepreneurial Engineering
Director Bergeron Entrepreneurs in Science & Technology
Lassonde School of Engineering, York University
Dr. Robert McNammee
Assistant Professor, Strategic Management
Managing Director Innovation and Entrepreneurship Institute
Fox School of Business, Temple University

2. 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

3. 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

4. Although traditional innovation sources important, new
sources of innovation are increasingly significant:
• Organization designed toleverage extantrelationships; 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
todevelop 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

5. 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 formalprocedures means that
individuals are not equipped to manage the type of informal
relationships with innovativeorganization, characterized by:
• Experimentation and incomplete contracts
• Less formal or newer organizations with a limited trackrecord
Trust can be a proxy for control, and offers an alternate
approach to mitigating relationship risk
Managing relationship risk through trust
rather than control

6. 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 Ties
Characterized 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.

7. • 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
Changing organizational design necessitates

8. • 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?

9. 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

10. • 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

11. • Trustevolvesduetoindividual behaviorsinfluenced 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

12. Lewicki and Bunker (1995)
Trust level change over time:
allows evolution of relationship
Knowledge
based trust
Competence
based trust
Identification
based trust

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

14. Dimension Trust building Trust damaging Trust violating
Trustworthy
Consistency
Displays of behavior that confirm
previous promises
Shows inconsistencies
between words and actions
Fails to keep promises and
agreements
Benevolence
Exhibit concern about well-being
of others
Shows self-interest ahead of
others’ well being
Takes advantage of others
when they are vulnerable
Alignment
Actions confirms shared values
and/or objectives
Exhibits behaviors
sometimes inconsistent with
declared values
Demonstrates lack of shared
values and willingness to
compromise
Capability
Competence
Displays relevant technical
and/or business ability
Shows lack of context
specific ability
Misrepresents ability by
claiming to have non-existent
competence
Experience
Evidence of relevant work and/or
training experience
Relies on inappropriate
experience to make decision Misrepresents experience
Judgment
Confirms 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
Disclosure
Shows vulnerability by sharing
confidential information
Shares confidential
information without thinking
of consequences
Shares confidential
information likely to cause
damage
Reliance
Shows 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
Receptiveness
Demonstrates ‘coachability’ and
willingness to change
Postpones implementation
of new ideas or deflecting
Refutes feedback or blames
others
Communication
Accuracy
Provides truthful and timely
information
Unintentionally
misrepresents or delays
information transmission
Deliberately misrepresents or
conceals critical information
Explanation
Explains details / consequence of
information provided
Ignores request for
explanations
Dismisses request for
explanations
Openness
Open 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
Trustworthy
Consistency
Displays of behavior that confirm
previous promises
Shows inconsistencies
between words and actions
Benevolence
Exhibit concern about well-being
of others
Shows self-interest ahead of
others’ well being
Alignment
Actions confirms shared values
and/or objectives
Exhibits behaviors
sometimes inconsistent with
declared values
Capability
Competence
Displays relevant technical
and/or business ability
Shows lack of context
specific ability
Experience
Evidence of relevant work and/or
training experience
Relies on inappropriate
experience to make decision
Judgment
Confirms ability to make accurate
and informed decisions
Relies inappropriately on
third parties or erroneous
information
Trusting
Disclosure
Shows vulnerability by sharing
confidential information
Shares confidential
information without thinking
of consequences
Reliance
Shows willingness to be
vulnerable through delegation
Reluctant to delegate, or
introduces controls on
subordinates’ performances
Receptiveness
Demonstrates ‘coachability’ and
willingness to change
Postpones implementation
of new ideas or deflecting
Communication
Accuracy
Provides truthful and timely
information
Unintentionally
misrepresents or delays
information transmission
Explanation
Explains details / consequence of
information provided
Ignores request for
explanations
Openness
Open to new ideas or new ways
of doing things
Does not listen or ignores
new ideas
Dimension Trust building
Trustworthy
Consistency
Displays of behavior that confirm
previous promises
Benevolence
Exhibit concern about well-being
of others
Alignment
Actions confirms shared values
and/or objectives
Capability
Competence
Displays relevant technical
and/or business ability
Experience
Evidence of relevant work and/or
training experience
Judgment
Confirms ability to make accurate
and informed decisions
Trusting
Disclosure
Shows vulnerability by sharing
confidential information
Reliance
Shows willingness to be
vulnerable through 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

15. • Organizations developacceptable 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

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
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:
©

17. 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 Diagnostic
Trust Dimension: CAPABILITY

18. 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 Diagnostic
Trust Dimension: TRUSTING

19. 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 Diagnostic
Trust Dimension: COMMUNICATIVE

20. 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
Andrew.maxwell@lassonde.yorku
http://tinyurl.com/ldd87ry

21. Becoming
Innovative
One Behavior
at a time