Exploring the Tension between Clarity and Ambiguity in Goal Setting for Innovation

Abstract

In this article we analyse the role of goal setting for innovation in an R&D context. The literature on goal setting for innovation is inconclusive; some scholars claim that goals should be ambiguous in order to inspire novel ideas, but others claim that clear project goals are important in order to undertake innovation projects in an efficient manner. We aim to explain this inconsistency by taking a more fine‐grained view of innovation where we study goal setting in relation to exploratory aspects such as idea generation separately from exploitatory aspects such as idea implementation. The results from an empirical survey study in the R&D department of an automotive company reveal that a general ambition to be innovative is positively related to all phases of innovation, but the effects of clear project goals are more complex. We found that idea novelty increases under conditions of either high or low levels of goal clarity, whereas mid‐range levels of goal clarity are related to fewer novel ideas. These findings inform existing knowledge about goal setting and innovation, and in particular challenge the body of literature showing that only high levels of ambiguity in goal setting are a fruitful means for innovation.