MIT Sloan Management Review

is still a creativity gain. It is just lower than the peak that occurs in the medium-to-high-trust range.

At this writing (late 2009), Daimler-Benz and Swatch’s codeveloped Smart car is reaping the benefits of its innovative design. As gas prices increase, global warming concerns grow and consumers flock to microcar dealerships, the Smart factory in Ham-bach, France, is running at full capacity. Despite initially disappointing sales and a fair amount of mockery among observers, the market seems ripe to adopt the microcar concept, and other automakers must now catch up if they hope to compete in this new product category.

When innovation analysts study this chapter of the car industry’s history, surely they will debate who was the mastermind behind the microcar: Nicolas Hayek, CEO of Swatch, or Helmut Werner, then head of Mercedes-Benz. But given our findings about the dynamics of innovation, it may be that neither gentleman was the true innovator. Rather, it was the tension between the two companies (and their respective teams) that caused the partners to explore new concepts and designs that led to the Smart car breakthrough.

When inventing together, trust is good; but avoiding too much trust is better.

Francis Bidault is a professor of management at the European School of Management and Technology in Berlin, Germany. Alessio Castello is adjunct professor of management at the Institut d’Administration des Entreprises, l’Université de Nice, in Nice, France. Comment on this article or contact the authors at smrfeedback@mit.edu.

ACKNOWLEDGMENT

The authors wish to express their gratitude to the Peter-Curtius Stiftung (Peter Curtius Foundation) for its generous support of the research project reported in this article.

REFERENCES

1. J.H. Dyer and N. W. Hatch, “Using Supplier Networks to Learn Faster,” MIT Sloan Management Review 45, no. 3 (spring 2004): 57-63; R. Gulati, “Does Familiarity Breed Trust? The Implications of Repeated Ties for Contractual Choice in Alliance,” Academy of Management Journal 38, no. 1 (1995): 85-112; and J. Hagedoorn and G. Duysters, “External Sources of Innovative Capabilities: The Preference for Strategic Alliances or Mergers and Acquisitions,” Journal of Management Studies 39, no. 2 (2002): 167-188. 2. F.D. Schoorman, R.C. Mayer and J.H. Davis, “An Inte-

grative Model of Organizational Trust: Past, Present and Future,” Academy of Management Review 32, no. 2 (2007): 344-354.

3. A. Ariño, J. de la Torre and P.S. Ring, “Relational Quality: Managing Trust in Corporate Alliances,” California Management Review 44, no. 1 (2001): 109-131. 4. H. W. Chesbrough, “Open Innovation: The New Imperative for Creating and Profiting from Technology” (Boston: Harvard Business School Press, 2003). 5. M.J. Kelly, J.-L. Schaan and H. Joncas, “Managing Alliance Relationships: Key Challenges in the Early Stages of Collaboration,” R&D Management 32, no. 1 (2002): 11-22. 6. D. Littler, F. Leverick and D. Wilson, “Collaboration in New Technology-Based Product Markets,” International Journal of Technology Management 15, no. 1/2 (1998): 139-159. 7. K. Heimeriks, “Alliance Capability, Collaboration Quality and Alliance Performance: An Integrated Framework,” working paper 02.05, Eindhoven Centre for Innovation Studies, Eindhoven University of Technology, Netherlands, 2002; and T.E. Stuart, “Interorganizational Alliances and the Performance of Firms: A Study of Growth and Innovation Rates in a High-Technology Industry,” Strategic Management Journal 21, no. 8 (August 2000): 791–811. 8. Ariño et al., “Relational Quality.” 9. A.G. Robinson and S. Stern, “Corporate Creativity: How Innovation and Improvement Actually Happen” (San Francisco: Berrett-Koehler, 1997). 10. F. Bidault and M. Schweinberg, “Fiat and Peugeot’s Sevelnord Venture (A),” IMD case no. 3-0644 (Lausanne, Switzerland: IMD, 1996). 11. M.-H. Chen, Y.-C. Chang and S.-C. Hung, “Social Capital and Creativity in R&D Project Teams,” R&D Management 38, no. 1 (2008): 21-34; and D. De Clercq, N. Thongpapanl and D. Dimov, “The Role of Conflict and Social Capital in Cross-Functional Collaboration” (paper presented at the Fourth Workshop on Trust Within and Between Organizations, Amsterdam, Netherlands, October 2007). 12. A.C. Amason, “Distinguishing the Effects of Functional and Dysfunctional Conflict on Strategic Decision Making: Resolving a Paradox for Top Management Teams,” Academy of Management Journal 39, no. 1 (1996): 123-148; and K.A. Jehn and E.A. Mannix, “The Dynamic Nature of Conflict: A Longitudinal Study of Intra-group Conflict and Group Performance,” Academy of Management Journal 44, no. 2 (2001): 238-251. 13. P. Dussauge, B. Garrette and A. Dumont, “The Ma-tra-Renault Espace Alliance and the European Minivan Market,” HEC Paris case study no. 397-025-1 (Paris: HEC Paris, 1997). 14. G. Le Cardinal, J.-F. Guyonnet, B. Pouzoullic and J. Rigby, “Intervention Methodology for Complex Problems: The FAc T-Mirror Method,” European Journal of Operational Research 132, no. 3 (2001): 694-702.