Water polo at the 2012 Summer Olympics (Source: Wikimedia Commons)
Ideas for Leaders #621

Innovation and the Pros and Cons of Close Personal Relationships

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Key Concept

Not all dimensions of social capital have a clear positive influence on organizational exploration activities. A new study shows that the acquisition of new knowledge, ideas and insight can be both helped and hindered when members of a team have close, trusting relationships.

Idea Summary

An organization’s activities can be divided between exploitation — the day-to-day operations of the organization as well as strategic planning and implementation — and exploration — acquiring and using new knowledge, ideas and insights, which can lead to new products, new technologies, or new markets.

Previous research has shown that social capital — the breadth and depth of the connections and relationships of an organization’s employees and managers — can enhance organizational exploration.  This previous research, however, often focuses on structural issues of social capital, such as the breadth of networks.

One team of researchers explored another dimension of social capital called relational capital, a more qualitative measure of social capital. Relational capital measures the quality — for example, the level of trust and closeness — of individual relationships in an organization.

The team studied 150 members of R&D teams from three R&D-intensive firms to determine the impact of relational impact on a company’s exploration activities. The results were mixed.

On the one hand, relational capital has a positive impact on knowledge acquisition, an important element of exploration. People are more willing to exchange knowledge and learn more from people that they trust and with whom they have a close relationship.

On the other hand, however, relationships that over time become too close and trusting can lead to goal alignment: everyone comes to agree on the same goals and objectives. The problem with goal alignment is that innovative solutions or paths of inquiry that don’t fit in with the group’s consensus can be deliberately ignored. Goal alignment thus limits rather than expands organizational exploration.

Organizational leaders are thus faced with a dilemma. They must encourage close, trusting relationships in the organization that support knowledge acquisition and sharing. At the same time, they must somehow ensure that those relationships do not become too close so that the organization’s exploration is hobbled by groupthink and limits.

Before resolving this dilemma, leaders must understand the contextual factors that will either encourage or discourage exploration activities.

One contextual factor is the personality traits of individuals in the organization. Research-driven organizations, such as pharmaceutical companies, are more likely to attract intellectually curious individuals who enjoy the quest for new knowledge. Teams with these types of individuals are less likely to tip into goal alignment.

Another, closely related contextual factor, is the nature of the task. For example, a new product development team’s success is built on new knowledge and innovative thinking. A strong relationship among team members is more likely to encourage knowledge acquisition rather than goal alignment.

There are a number of organizational context issues will play a role. For example, does the organization make an effort to put together heterogeneous, multi-disciplinary teams who are less likely than homogeneous, mono-disciplinary teams to fall into goal alignment? Does the organization’s hiring and promotion criteria favour reliability and consistency or more exploration-friendly individual traits, such as creativity and risk-taking? Are leaders in the organization focused on execution or on developing the aspirations of their people? Execution-focused leaders are more likely to encourage goal alignment; transformational leaders who want to develop their people are more likely to encourage knowledge acquisition.

Examining all of these contextual factors will help determine the extent of the threat of goal alignment to the company’s exploration activities.

Business Application

Companies must take steps to encourage the close, trusting relationships that enhance the exploration for new ideas and knowledge — while avoiding the limiting goal alignment that over time can creep into the dynamic of those relationships.

The research team offered the following step-by-step suggestions to ensure effective organizational exploration:

  1. Don’t let exploitation push aside exploration. The first step to enhancing knowledge acquisition is to recognize its vital importance to the organization. The exploitation of current resources and capabilities is important in the short-term, but long-term success will be built on new ideas, mindsets and methodologies that have yet to be discovered.
  2. Encourage close and trusting relationships. The team’s cautionary note on goal alignment is not an argument for fostering intense competition rather than trust-based collaboration among your people. Competition undermines the knowledge acquisition and sharing required to build the future.
  3. Use diversity to ward off goal alignment. Ensure that teams are heterogeneous: such teams are less likely to succumb to the insidious threat of goal alignment than homogeneous teams. In addition to bringing together people from diverse backgrounds, encourage individuals to become more diverse, for example by rotating them through different jobs.
  4. Avoid top-down mandates on specific goals and objectives. A vision for your organization can help unify your people. At the same time, a vision or identity that is too strong can discourage new ideas and directions. Cascading some decision-making autonomy down to the team level will prevent an organization filled with people marching in lockstep.
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Authors

Institutions

Source

Idea conceived

  • June 2015

Idea posted

  • September 2016

DOI number

10.13007/621

Subject

Real Time Analytics