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Why innovation requires trust and respect
Tuesday 21 March, 2023

Why innovation requires trust and respect

by Catherine Beaudry

Catherine Beaudry (Québec & Trinity 1992) has studied the impact of collaboration on the survival and growth of companies, and has observed the evolution and success of industrial clusters and innovative ecosystems over many years. Here she argues that successful collaboration – in person as well as online – requires real trust and connection.

Serendipitous and breakthrough innovations are relatively rare. The majority of innovations introduced generally result from new combinations of existing knowledge; there is an imperative for collaboration in the face of increasing complexity in the kinds of projects, technologies, products and services which need to be designed and delivered.

The exploitation of massive data, the democratisation of knowledge, and the development of collaborative tools to facilitate networked co-creation, force a rethinking of innovation ecosystems and relationships between decision-makers, experts and users.

As such, they present major strategic and organisational challenges for which firms and institutions are ill-equipped. Innovation ecosystems are multidisciplinary and inter-sectoral environments comprise a variety of stakeholders (firms, universities, governments, research and innovation intermediaries, users and society, etc.) that co-evolve and influence each other.

This obviously implies that the innovative ecosystem should rely both on the participation and collaboration of all its stakeholders, who themselves come from different backgrounds and disciplines, and on some degree of openness.

Breaking down these silos and encouraging multidisciplinary research will allow greater fluidity of knowledge and will develop expertise that goes beyond the simple common language between disciplines, thus increasing our capacity for innovation.

Instead of setting up multidisciplinary research teams made up of monodisciplinary individuals, we need to rethink training programmes for our students so as to encourage the graduation of multidisciplinary individuals.

Naturally, for collaboration to occur and be fruitful, individuals need to work with other individuals. At the level of organisations, appropriate governance, collaborative agreements, etc. need to be put in place. Things get complicated when a multitude of stakeholders are involved, and much more complex when several sectors need to learn to work with one another.

This is where appropriate governance is absolutely crucial to develop trust within innovation ecosystems. The COVID-19 pandemic has added to an already complex situation.

Maintaining organisational and innovation culture is difficult enough when team members are already used to working with one another.

Developing such a culture with new employees is near impossible. For them, collaborating virtually will not be conducive to learning the organisational and innovation culture, however much we try to replicate the informal chat at the coffee machine!

Chronicle of a failure foretold

Blockchain technology has been proposed and explored as a way to establish and maintain trust within peer-to-peer networks. How does it work? By recording and storing transactions in the public domain. But does it really work? The following highlights elements of a cautionary tale about the promise of blockchain and online collaborative tools.

This is a short story about two groups of individuals from very different backgrounds - blockchain specialists and those from the more traditional high-tech sector - that aimed to create an entirely virtual organisation.

Working with a colleague and a Master’s student, we observed the creation and subsequent failure of an organisation that aimed to co-create and co-innovate virtually, by creating an organisation where individuals were recruited and work together using online collaborative tools.

Blockchain specialists were in charge of developing an application to recruit team members, manage projects and reward contributors for virtual organisation in the traditional high-tech sector. Both the founding members of the virtual organisation and the blockchain specialists believed that by using online collaborative tools, new standards and rules to govern interactions would emerge.

The founders were convinced by promise economy arguments about the potential of blockchain, without understanding exactly how it worked. Blockchain developers took it somewhat for granted that their technology was the solution to almost everything.

While blockchain developer communities have a long tradition of open-source collaborative work, this is not how things work in most conventional high-tech environments, where IP protection, whether formal or strategic, is key. Hence the first culture clash.

In these conventional high-tech sectors, the goal of IP protection is generally to grant a monopoly power in order to recoup investment and generate revenues for the next round of innovation activities, or to provide lead-time advantage.

In an open-source environment, the need to reward the individuals developing the source code and share the revenues generated remains in place. This is where the difficulties began. In the organisation studied, neither group had expertise in the other’s discipline or competence, and no one had knowledge in both.

Widely diverging opinions about the value of various activities were a result of each misunderstanding the other’s expertise. Mistrust is not a recipe for success.

In a nutshell, although all shared a common trust in the technology – the online collaborative tool – they did not trust each other, or not enough to be able to collaborate efficiently. They had forgotten the first principle of collaboration: individuals collaborate with other individuals.

In any collaborative relationship, building trust takes time, but can disappear in an instant. The moral of the story is relatively simple. For a strong innovation culture and trust to emerge and be maintained, innovative teams need to work in person in the same room every once in a while, and get to know and respect each other.

Professor Catherine Beaudry (Québec & Trinity 1992) is a Professor at the Department of Mathematics and Industrial Engineering of Polytechnique de Montreal.  Her research interests include innovation economics, networks, impact of science and technology, and regional innovation systems among others.