How Trust Leads to Innovation

Here’s this month’s piece from neuroeconomist Paul Zak. For those who might dismiss some of our thinking as the “soft side” of management, Paul puts “hard science” behind it.

Like many frequent flyers, I have a fascination with airplanes—with their design, their engineering and their history. While reading Joe Sutter‘s wonderful 747: Creating the World’s First Jumbo Jet and Other Adventures from a Life in Aviation, I found an unexpected lesson about managing for innovation.

Due to the enormous fixed cost to develop a new model of commercial airplane, in the 1950s Boeing began to invite stakeholders to be part of the process. Sutter, chief engineer for the 747, describes how customers for the plane—including representatives from Pan Am, Japan Airlines and Lufthansa—were given regular briefings and asked for input on the design.

Beyond the sheer size of the 747—its takeoff weight was a remarkable 735,000 pounds—the plane’s other major innovation was its two-aisle design. Pan Am, Boeing’s largest customer, was originally skeptical of this approach, preferring a narrower and taller plane modeled on a multi-deck cruise ship.

But Pan Am engineers were invited to be in residence at Boeing’s offices near Seattle for nearly the entire development process, and they eventually signed off on the single-deck design when they got a chance to view mock-ups of the interior of both versions.

Including potential customers in the design also meant that the 747’s innovations leaked to competitors before the plane was even sold. But Boeing executives were confident that the company could build jets faster than their rivals could, and so they didn’t burn a lot of time and energy trying to hide their engineering specs. And they were right: In part because of the way they crowd-sourced innovation, the 747 was designed and built in only 16 months, a feat that will likely never be repeated for any other airliner.

In all of this, the key was trust. Boeing trusted its engineers, suppliers and customers to collaborate during the 747’s build, and Boeing continues this tradition today.

It is a wise practice. As I’ve discussed before, my studies have shown that transparency is a key factor in sustaining trust in high-performing organizations. And that, in turn, helps drive innovation.

In a recent study at a manufacturing company, for example, my lab found that organizational trust had a positive association with closeness among employees. And we found that those in the top quartile of colleague closeness were 22% better at solving a difficult problem with others. They also enjoyed working on this problem 10% more than those in the lowest quartile of closeness.

The lesson: People innovate better as a group, and when they trust those in the group, creativity emerges. As Peter Drucker wrote, “Teams are based on mutual trust and mutual understanding.”

Fostering such a culture is a great way to help any organization fly high.

Paul Zak is the director of the Center for Neuroeconomics Studies at Claremont Graduate University and the author of The Moral Molecule.