Four trust types that make or break AI projects
The researchers conducted an in-depth study at TechCo, a Scandinavian software firm of about 600 employees implementing an AI-powered knowledge-mapping tool. This tool collected data from employees' digital activities to create a visual expertise map showing who knew what across the organisation.
Through interviewing TechCo's managers and employees (on condition of anonymity) and analysing data on usage of the AI tool, the researchers uncovered four forms of trust among employees. Each form of trust leads to different behaviours that could directly impact the success or failure of AI initiatives in organisations.
The study, now published in the Journal of Management Studies, also points to actions through which leaders can foster various forms of trust in AI.
1. Full trust: High cognitive and emotional trust
Employees with full trust believed in the AI tool's capabilities (cognitive trust) while feeling comfortable with the technology (emotional trust). As one manager said: 'I perfectly understand the logic (behind the tool), if you improve the way you're harnessing the knowledge and insights of people, if you make it easier for people to find each other, that makes perfect sense.'
A people-centric approach that acknowledges both thinking and feeling dimensions of trust is essential.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
These employees saw strategic applications beyond the tool's basic functions. One of them noted: 'You can observe who you're collaborating with, as well as who you're not collaborating with... you can consider your own conduct and determine what kind of individuals you need to work with.'
Emotionally, these employees felt positive about AI: 'I think it's where the world is going, and for me... if I'm working now and I'm being paid, why shouldn't it be transparent?' Significantly, employees with full trust didn't change their digital behaviours, providing the AI with accurate data needed for optimal performance.
2. Uncomfortable trust: High cognitive trust and low emotional trust
The second form of trust involved employees who recognised the tool's value but worried about its implications. One manager said: 'That's a wonderful idea that you would somehow be able to figure out who would be the best expert for this... But at the same time, just when you may have started with the positive potentials, you may not have noticed these negative potentials.'
Many feared the potential misuse of data: 'There is always the worry that those data will be used for something else I don't have any control over... For example, against us. Now, it's focused on people, not from the management side. But I guess companies want to be more efficient, and – well, there's a fine line.'
To handle this cognitive-emotional conflict, these employees began to be wary of their digital footprints. They limited the information visible to the AI by marking calendar events as private or using generic descriptions.
3. Blind trust: Low cognitive trust and high emotional trust
Some employees questioned the AI tool's competence while still feeling comfortable with it. As one interviewee said: 'I sometimes feel like it is not tracking the amount of time I've spent on either technology properly.' Another said the map generated by the tool did not accurately reflect the expertise of some colleagues. 'It was hard to find the person with actual knowledge.'
Despite these concerns, they didn't feel threatened by the technology: 'I am not concerned about sharing information because I know that the information... is information that generally could benefit other people to find as well.'
Interestingly, these employees responded by detailing their digital footprints. They added more information to their calendars, project entries and online discussions to help improve the tool's performance. As one employee explained: 'Let's take a step forward and provide the necessary details to make our tool more efficient.'
4. Full distrust: Low cognitive and emotional trust
Employees with full distrust neither believed in the tool's capabilities nor felt comfortable with it. They described negative experiences ('I tried using (the tool), and nothing worked at all') and questioned its fundamental approach ('We shouldn't trust only data or digital services to make decisions').
These employees also experienced negative emotions, particularly fear. One confided: 'I feel that it is dangerous. My fear is that it may be the misuse of data. They (the collected data) are used against you in some cases.'
Their responses were the most damaging to the AI system – either withdrawing their data entirely ('I just opt out') or actively manipulating their digital footprints by using certain keywords to shape how they appeared in the system.
These behaviours created a vicious circle. When employees withdrew, confined or manipulated their digital footprints, the AI received imbalanced or inaccurate data, decreasing its performance. As one interviewee noted: 'Some experts disappeared from the visual map.'
Lower performance reduced trust further, leading to decreased usage until eventually, the project failed.
How to make your AI initiative stick
If there's one key insight from the study, it is that a people-centric approach that acknowledges both thinking and feeling dimensions of trust are essential. Trust is not just a monolithic, one-size-fits-all concept.
For a start, leaders introducing an AI tool to the workplace should provide comprehensive training that explains how AI works, its capabilities and its limitations. Such efforts build cognitive trust. Leaders should also develop and communicate clear AI policies that define what data will be collected and how it will be used. This helps employees understand the tool's role, what it's capable of and, as importantly, how employees' concerns and personal protection will be addressed. When people feel at ease, they are more likely to form emotional trust.
This brings us to the point of managing expectations about AI performance. Managers should encourage patience during early stages when results may be inconsistent. Celebrate AI-driven achievements or improvements to demonstrate progress and reinforce the value of the AI initiative.
The study also shows that leaders must address feelings, not just facts. Share your own enthusiasm about AI's potential benefits. Create psychological safety by encouraging the open expression of concerns about AI. Address anxieties with empathy rather than dismissal. When employees feel their emotions are acknowledged, they're more likely to develop positive connections with new technologies.
Remember: True AI transformation starts not with algorithms, but with a sophisticated understanding of various forms of trust and fostering them as part of your AI initiative. Quy Huy is the Solvay chaired professor of technological innovation and a professor of strategic management at Insead
Natalia Vuori is an assistant professor at the department of industrial engineering and management of Aalto University
This was first published in Insead Knowledge
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
2 hours ago
- Business Times
Japan expects only 1% to 2% of $550 billion US fund to be investment
[TOKYO] Japan expects only 1 to 2 per cent of its recently agreed upon US$550 billion US fund to be in the form of actual investment, with the bulk of it being loans, according to the nation's top chief negotiator Ryosei Akazawa. At the same time, Tokyo would save roughly 10 trillion yen (S$87 billion) through lower tariff rates in its deal with America, he said. The US$550 billion investment framework will be a combination of investments, loans and loan guarantees provided by financial institutions backed by the Japanese government, Akazawa said on public broadcaster NHK on Saturday (Jul 26) night. Of the total, investment would be worth 1 per cent or 2 per cent and the US and Japan would split the profits of that investment at a ratio of 90-10, he said. Japan had originally proposed a 50-50 ratio, he added. The fund is a centrepiece of the deal announced by the two sides that will impose 15 per cent tariffs on Japanese cars and other goods. But the details given by Akazawa suggest the Japanese may end up giving up much less than at first glance. The comments come as officials from countries with deals with the US sift through the terms to explain to the public what they entail. 'It's not that US$550 billion in cash will be sent to the US,' Akazawa said. 'By letting the US have 90 per cent of the profits rather than 50 per cent, I think Japan's loss will be at most a couple of tens of billions of yen. People are saying various things, such as 'You sold out Japan', but they are wrong.' For the loans provided through the programme, Japan will simply be collecting the interest payments, and for the loan guarantees, if nothing happens, Japan will also be just collecting fees, Akazawa said. 'For that part, Japan's just making money,' he said. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Akazawa also clarified that the investment programme will not be only supporting Japanese and US firms. As a potential example, he cited a Taiwanese semiconductor firm building a factory in the US. 'We'd like to put the US$550 billion in place during President Trump's term,' Akazawa added. Further details of the implementation of the US-Japan deal remain unclear, including when the new tariff rates would take effect and when the new investment vehicle would kick off. There's been no joint document signed by both sides for the deal, although the White House has published a fact sheet. 'If you say something like, 'Let's create a joint document,' they will say, 'We will lower tariffs after the document is created,'' Akazawa said. In order not to lose time, 'we will demand that they issue an executive order to lower tariffs as soon as possible, regardless of a document'. Last week, Akazawa said that he expects universal tariffs on Japan's shipments to be lowered to 15 per cent on Aug 1, while he said he wanted the car tariffs to be cut to 15 per cent as soon as possible without specifying a date. The Trump administration has touted the deal with Japan as a potential model for others. On Sunday, the US and European Union agreed on a deal that will see the bloc face 15 per cent tariffs on most of its exports, with the EU pledging to invest US$600 billion in the US. BLOOMBERG
Business Times
3 hours ago
- Business Times
BYD runs India remotely as China tensions shut out top brass
[NEW DELHI] China's BYD is forging ahead with its attempts to expand in India despite roadblocks from the government that are preventing the electric vehicle maker from conducting key business dealings there. Like most Chinese companies, BYD has been unable to obtain visas for executives after a deadly clash between Indian and Chinese soldiers along a disputed Himalayan border in 2020 sparked a major deterioration in political ties. That's seen the EV giant resort to holding board meetings and high-level business interactions in Colombo in Sri Lanka and Kathmandu in Nepal, and even as far away as Singapore, according to sources familiar with the matter. Ketsu Zhang, BYD's managing director for India, has been unable to obtain a work permit since he left the EV maker's local base in Chennai, despite government efforts to facilitate his travel, said the sources, who asked not to be identified because they're not authorised to speak publicly. Zhang worked from the carmaker's headquarters in Shenzhen in 2021 before moving to Tokyo this year, they said. From Japan, he oversees Asian markets including India, the sources said. An on-the-ground presence is particularly important for manufacturers, given the need for quick decision making, addressing productivity issues and establishing community ties. Cold shoulder The cold shoulder is mutual. As recently as March, travel restrictions were still being wielded in the political spat. That month, an Indian contingent wanting to visit a major meeting of BYD car dealers in Shenzhen had to be scaled down after the majority of participants, including the company's employees based in India, were unable to obtain visas, a source familiar with the matter said. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up A representative for BYD in India declined to comment. Despite the operational difficulties, BYD has proved popular with Indian drivers, sales in the first half of this year are nearly touching the total units sold in 2024. Indian officials have been clear that they will not welcome investment from the carmaker – Commerce Minister Piyush Goyal said earlier this year that it's a 'no' to BYD due to caution around the nation's strategic interests. India has already rejected BYD's US$1 billion plan to build a plant in partnership with a local company. This leaves the Chinese firm unable to qualify for reduced tariffs on imported EVs in exchange for establishing a substantial manufacturing presence in India. The freeze contrasts with the experience of Tesla Its chief executive officer Elon Musk met with India's Prime Minister Narendra Modi in the US earlier this year. The US carmaker opened its first showrooms in India this month, with deliveries set to begin as early as August. Tesla does not have plans to establish local manufacturing, meaning it faces import taxes of as much as 110 per cent for fully-assembled vehicles. Expanding overseas is critical for BYD, which risks missing its target to sell 5.5 million cars this year as demand in China stagnates and it draws the ire of Beijing following rounds of heavy price discounting. But without the ability to invest in manufacturing in India, BYD relies on its assembly plant in the southern city of Chennai, which has an annual capacity of 10,000 to 15,000 units, to meet Indian demand. Hefty duties The company also imports most cars it sells in India, but hefty duties, aimed at shielding domestic firms, effectively double the cost of a vehicle and India restricts volumes unless a model has received a local roadworthiness certificate. While tensions between China and India are thawing, it's unclear whether curbs on professional visas will be lifted or if BYD will ever be welcomed with open arms. Still, there are tentative signs of progress. Earlier this month, India allowed Chinese nationals to apply for tourist visas again. BLOOMBERG
CNA
3 hours ago
- CNA
China proposes global AI body, urges chip supply and talent flow boost
Chinese Premier Li Qiang has proposed establishing a world artificial intelligence cooperation organisation to coordinate governance of the fast-developing technology. Speaking at the opening of the World AI Conference on Saturday (Jul 26), he also called for removing barriers to clip supply and talent exchange. CNA's Tan Yew Guan has more from Shanghai.
