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Trust and Open Innovation

Wed, 02/09/2011 - 11:47 -- admin

Accenture recently published a report on Managing Trust for High Performance.  The essence of the report is that trust can be directly related to corporate performance, and that losing trust with customers and other stakeholders is one of the surest ways to destroy value.  Trust can also be measured and managed.

Open Innovation is an activity that is also highly dependent on trust for success.  So what does that mean in practice?  Open Innovation simplistically involves two partners; one with a problem and one with a solution.  Whoever approaches whom is less important than the fact that they need to trust each other to make the project work.  There are things that you can do to start on a firm foundation of trust and carry on to the successful conclusion of a project, hopefully leading to a fruitful alliance of serial innovation output.

Trust has to be built.  This doesn’t mean that you start with trust’s evil siblings, suspicion and mistrust.  It is very much an old school way of thinking that trust and respect need to be earned.  In reality you should approach a new relationship with a healthy amount of both trust in, and respect for, your prospective partner.  And then work at growing it.

It is important to do research in advance.  In addition to publicly available sources of information, you should tap in to your network and ask whether your contacts have any experience or knowledge of working with company X.  Find out those elements that are fully trusted and which ones make your friends wary.  This doesn’t mean that the same thing will happen to you, it’s just to help you understand the areas to scrutinize more closely.  Once the relationship starts, don’t discuss it with your network.

Trust has many elements, the most obvious being do people trust what you say?  This just doesn’t mean whether you lie or tell the truth.  In my experience, very few business people tell a downright, barefaced lie.  However, the more you guess, the more you bluff and the fewer times you are not on top of the facts, the less likely people will trust what you say.  You may be able to guess in your own organization, but others may be less tolerant.  So stay well informed, tell it like it is, and if you don’t know then say so.

Do you deliver what you promised when you said you would?  Whether that is because you have over promised and under delivered through good intentions, it doesn’t matter.  You haven’t met your commitments.  There will be less trust in your next promise.  Of course innovation is unpredictable, but if you know an element of a project isn’t going to happen on time, the sooner you communicate it the better.

Do you manage expectations well?  The most common failure of trust is when expectations don’t meet reality.  Whether this is on project commitments, competency, brand strength, or contract negotiations, you should keep your partner’s expectations as close to reality – or at least your perception of it – constantly.

Do you understand your partner’s best interests and work towards meeting them?  This isn’t about a philanthropic approach to your partner’s well-being.  On the contrary, in general with Open Innovation, it is actually in your longer-term interest for your partner to do well from your collaboration.  Their success means they will want to come back for more, and if you have structured the deal correctly that will also be good for you.  In short, they trust you and want to continue working with you.

Lack of trust produces extraordinary displacement activity.  If you don’t fully trust your partner, you interpret standard actions and statements as having alternative meanings, and put systems, checks and legal protection in place which make the project less efficient and less likely to succeed.  Lack of trust breeds suspicion and, in extreme cases, paranoia.  It wastes time.

One concern that some companies have with Open Innovation is working with common suppliers.  The worry is that the supplier, who may already supply your competitors, will tell them your secrets.  I’ve worked in quite a few situations like this, and I can tell you that the first supplier who tells you what your competitors are doing will have committed relationship suicide.  You will never trust them again.  So the message to the customer company is – don’t ask.  And to the supplier – don’t tell.

As the Accenture report outlines, trust isn’t just one person’s opinion, you can measure the level of trust in a relationship by assessing a range of opinions.  Even though you may trust your partner, you should want to know how much they trust you.

So if you want to be successful at Open Innovation, pay close attention to trust, and ensure your actions don’t give your partner any reason to doubt you.  It will make the collaboration run more smoothly.  There’s an old saying that trust is like a vase; if you break it, you may be able to glue it back together, but it will never be the same.  Make sure you don’t break any vases in Open Innovation.

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