Managerial disposition and front-end innovation success

Abstract

The link between innovation culture and firm performance is well established. However, the specific mechanism via which innovation culture facilitates better managerial decision-making in front-end innovation remains unknown. Based on manager activation theory, the authors propose that innovation culture enables decision-making comprehensiveness—the full exploration of new ideas—by inhibiting the deleterious effects of the fear of negative evaluation and allowing managers to apply themselves to those areas in which they feel most competent. In turn, decision-making comprehensiveness is positively related to front-end innovation success. The model was tested with survey data collected from a sample of 172 innovation decision-makers.Implications are that top management should incentivize the quantity of new ideas, not penalize product failures, and encourage decision-making comprehensiveness. With an innovation culture, the risk of making suboptimal decisions in the front end of innovation is limited.