29 Mar 2011Working Paper Summaries

Risky Trust: How Multi-entity Teams Develop Trust in a High Risk Endeavor

by Faaiza Rashid and Amy C. Edmondson

Work that comes with high risk requires a great deal of trust among the individuals involved, whether it's the financial risk of producing a high-budget film or the personal safety risk of working in a war zone. In this paper, reporting on case study research on a high-risk, multimillion-dollar construction project, HBS doctoral candidate Faaiza Rashid and professor Amy C. Edmondson explore the concept of "risky trust," and examine how colleagues can learn to trust each other in the midst of high-risk work situations. Key concepts include:

Trusting the intentions and competence of other team members always matters, but in risky situations it's especially vital that workers can also trust the procedures of a team project.
Teams can repair damaged trust not only through process innovations, but also by overcoming social barriers to trust. Leadership is a vital activity that can come from multiple individuals in a high-risk project, to facilitate and build understanding. This requires a focus on initial discourse among the team, as well as communicating the importance of trust to the project.
Trust at an interpersonal level does not automatically translate to trust at the interorganizational level.

Author Abstract

This paper explicates the challenge of risky trust, which we define as trust that exists between parties vulnerable to high economic, legal or reputational risks at individual or organizational levels. Drawing from analyses of data collected in a grounded case study of a multi-million dollar construction project, we identify dimensions, antecedents and behavioral consequences of risky trust. Undertaken in the United States construction industry, a context known for its lack of trust, our study offers insights for trust repair.