RESEARCH
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Innovation and Close Relationships

The pros and cons of close working relationships in the quest for new knowledge and ideas



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Close working relationships among people can be both productive and counterproductive to exploring innovative new directions and opportunities, according to new research from Tom Mom of Rotterdam School of Management, Erasmus University (RSM) and colleagues.

Leaders need to balance the impact of close relationships. It is important to encourage trust and collaboration so that people are willing to share knowledge and insights, but at the same time leaders must break up ‘groupthink’ and prevent people’s close relationships from discouraging them to explore options outside of the consensus.

Mom’s research focused on the dimension of social capital called ‘relational capital’, which refers to the types of relationships that exist between people. This research, including a study of 150 members of R&D teams from three R&D-intensive firms, reveals that people are more willing to exchange knowledge and learn more from people with whom they have a close relationship. At the same time, close, trusting relationships can undermine exploration activities because they lead to goal alignment.

Goal alignment refers to the tendency of people who work closely together to come to a consensus on goals and objectives. As a result, they start to shut down or neglect other sources of innovative ideas, or fail to follow up on innovations that do not fit the group consensus. The paradox is that alignment around key objectives can help with implementation and execution — that is, exploitation — even as it undermines exploration. “

Why Context Matters

To find the delicate balance of just enough trust and closeness to encourage knowledge sharing while avoiding too much goal alignment, Leaders must understand contextual factors that can impact this balance.

The organizational context — relating to such issues as the diversity of the company’s teams, the type of leaders in the organization, or the company’s hiring and promotion policies — can play an important role. “Heterogeneity in terms of values, beliefs, relationships and goals is quite effective” in encouraging individual exploration, Mom says. Such heterogeneity enables the organization, he says, “to remain flexible and change direction every now and then.”

The type of leaders in the organization is also important. Mom says. Certain leaders are intently focused on execution. Transformational leaders, however, “are eager to understand the personal needs and developmental aspirations of their people,” he says. This attitude encourages their exploration activities.

Hiring and promotion policies is another facet of the organizational context. In some instances, people are employed for reliability and exploitation qualities, while other who might have exploration attributes such as creativity, are not as valued.

Beyond organizational context, there is the more specific context of the task. Teams that are focused on research and development, for example, will be naturally more inclined to encourage exploration in their members.

Finally, individual personality traits can influence whether the company successfully balances knowledge acquisition and goal alignment. Individuals who are intellectually curious and open to new ideas can push against situations that might encourage goal alignment, such as mono-disciplinary teams.

What Companies Can Do

Companies can take a number of steps to ensure close, trusting relationships that foster knowledge acquisition without tipping into groupthink-driven goal alignment.

The first step is fundamental: an awareness of the importance of exploration. “The implications for practice really begins with the fact that the firms should be aware that, generally speaking, more exploration or innovation is needed,” says Mom.

Second, companies should continue to foster close personal relationships in the organization. While Mom strikes a cautionary note about such relationships in terms of goal alignment, he emphasizes that close personal relationships are vital for knowledge acquisition and sharing. Some companies believe in fostering internal competition, and the results are disastrous.  “People start to protect their turf, they become less willing to collaborate and trust others less,” Mom warns.

Encouraging relationships among people from a variety of functions or disciplines throughout the organization is key, according to Mom. Such relationships will be rich in knowledge sharing but, because of the diverse backgrounds of those involved, will avoid insular alignment around certain goals.

Job rotation is another effective antidote to goal alignment; changing the members of a team prevents the team from coalescing around common goals.

“The other thing, at a company level, is to not have too strong a vision or develop too strong an identity,” Mom says. A top-down mandate on what and how the company will act discourages the exploration of new ideas and directions. On the other hand, decision-making autonomy will allow teams to forge different paths.

Access the original research: Relational Capital and Individual Exploration: Unravelling the Influence of Goal Alignment and Knowledge Acquisition; Tom J.M. Mom, Erasmus University Rotterdam; Pepijn van Neerijnen, University of Amsterdam; Patrick Reinmoeller, Cranfield University; Ernst Verwaal, KU Leuven.


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