Daring to Approve Radical Innovation Projects at the Front-End

Abstract

While innovation decisions are critical for organizations, our understanding of how managers make innovation decisions under high uncertainty is limited. We develop a theory on how goals guiding innovation decisions can vary depending on the level of uncertainty in the process, which increases along a continuum from the front end to launch and from incremental to radical projects. By using analytical or heuristic calculations, managers can assess innovation projects aligned with organizational goals. However, in case of high levels of uncertainties (i.e., front-end of radical proposals), such intendedly rational calculations are impaired by drastic information scarcities, which reduce self-efficacy beliefs pertaining to organizational goals. In such conditions, we posit that decision-makers self-regulate their goals and shift their focal goals from organizational to personal goals. We argue that approval of innovation proposals (i.e., go decisions) is possible under high levels of uncertainty only if the manager has a promotion-oriented focus supported by facilitatory organizational context, but they are not enough. In the absence of any reliable cues about the success of the innovation project, managers need additional impetus, such as provided by impulsiveness or passion for innovation, to dare risk-taking for a highly uncertain innovation project.