When companies collaborate, low trust is detrimental to innovation. But so is very high trust. The optimal level, yielding maximum impact, lies in between. How do you find it?
The Smart microcar, invented by the tumultuous partnership between Daimler-Benz and The Swatch Group Ltd., 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, 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.
To evaluate whether trust level is associated with higher or lower levels of innovativeness, we decided to set up a series of experiments. We enrolled groups with up to 30 players each, assigned them to as many as 15 pairs, and instructed each pair to design and build an object in the most creative way possible.
The results point to a major finding: As mutual trust increases, the partnership’s creativity goes up, reaches a maximum point and then starts to decline. To control for the inherent creativity of individual participants in the experiment, we considered not the individuals’ creativity but the pairs’ creativity arising from the partnership. The difference between the two was termed “partnership effectiveness.”
Although innovativeness, like partnership effectiveness, also decreases after passing an optimal point, its values are higher than those realized at lower levels of trust. Our findings show, as one would expect, that low trust is not conducive to innovation. But too much trust is bad for innovation too. As mutual trust goes up, innovativeness increases, but only to a certain point. There seems to be an optimal level of trust, above or below which innovativeness or creativity is impeded.
We can explain this seemingly strange pattern by observing how conflicts affect team performance. According to some management thinkers, tension does not always play a negative role in team dynamics. Indeed, while relational conflicts (which may arise, for example, from personal contempt for one or more team members) are extremely detrimental to team performance, task-oriented conflicts are beneficial because they foster critical thinking and in-depth analysis of the team’s goals and actions. From our findings, we could say that low levels of trust cause relational conflicts, while high levels of trust may induce a reduction in task-oriented conflicts.
Consider the example of the Renault Espace, which was the product of a hugely successful partnership that lasted for nearly two decades. Undoubtedly one of the most innovative car models in Europe in the 1990s, the Espace originated from a challenging partnership between Renault SA and Matra Automobile (now part of Lagardère SCA). While the companies’ CEOs were said to have a good relationship, Renault’s engineering and product-management teams questioned Matra’s ability to develop a successful car, given its modest achievements with previous models (such as the Bagheera, Murena and Rancho). While the Renault teams liked the freshness of Matra’s ideas, they were skeptical about its design solutions.
For example, when Renault’s advanced marketing group members found that customers increasingly valued modular interiors (in which the car owner could modify the seating arrangement) and deemed that Matra’s minivan idea made this feature possible, they insisted that the car incorporate it. At the same time, however, the group was unsure that Matra would be able to engineer the car on a high enough level to reach minimum quality standards. Renault’s marketing executives were so concerned that the Espace would not sell effectively as a passenger car that they demanded it be designed with a flat floor, to easily convert into a delivery van if need be. Matra engineers, who had designed racing cars, did not appreciate this compromise.
Nevertheless, the Espace gradually became the leader in its category in Europe, causing the two partners to repeatedly adjust the production capacity upward, eventually reaching an impressive 600% of its initial level.
Renault and Matra, despite a stormy relationship, were able to find an effective balance in their partnership and offer the market an innovative concept that competitors later adopted. The tensions and limited trust between the two teams resulted in a set of unconventional solutions, and a unique car design, that enjoyed long-term success.
Our findings confirm that joint innovation projects benefit from a committed and trusting environment. But companies not only should avoid very low mutual trust among the individuals working on the project, they also should avoid situations in which it is very high.
Trust that matters is not just at the sponsor or executive level; it is also essential in the teams formed to be creative and produce innovations. Leaders entering a joint innovation partnership should therefore consider the following:
• Do not expect much innovation from new partners (or new teams); it takes time for trust, and the consequent openness and cooperative behavior that generate benefits, to develop.
• Help teams involved in a joint innovation project to build trust early.
• Monitor the level of mutual trust during the project in order to avoid a rift and improve efficacy. Too often, managers pay no attention to trust; it is left to develop, or degrade, haphazardly. Proper monitoring should include a clear warning system.
• Ensure that there is an appropriate level of healthy criticism. If too much trust develops, it might be necessary to remind the team of its objectives and priorities. Here again, careful monitoring can alert management to an excessive buildup of groupthink.
• The risk of excessive trust should not be overestimated, however. Barring extreme conditions, there is still a creativity gain. It is just lower than the peak that occurs in the medium-to-high-trust range.
This article is adapted from “Why Too Much Trust Is Death to Innovation,” by Francis Bidault and Alessio Castello, which appeared in the Summer 2010 issue of MIT Sloan Management Review.