Goal setting for innovation : Exploring the relation to operational goals

Abstract: Goal setting is proven to affect the choices and focus of the employees towards certain tasks, therefore it has been suggested for ensuring that sufficient focus and attentions is direct towards explorative activities (Lund & Magnusson, 2015), which are otherwise at risk of being down prioritized (Levinthal & March, 1993). Such effects of goal setting can though not be expected in situations where there is low commitment to the goal program (Latham, 2004). A factor which is important for increasing the goal commitment, is having clear rationales for the goals set. However, because there are few studies on goal setting for innovation, rationales for establishing innovation goals and hinderers affecting goal commitment have still not been researched from an innovation perspective. Moreover, much of the existing goal setting theory has derived from research related to productivity aspects (Latham & Yukl, 1975;Lund & Magnusson, 2015) which have more in common with operational activities, than innovation activities. The purpose of this study is to identify rationales- and hinders to goal commitment when establishing innovation goals, and to examine how goal setting features for exploration (referred to as innovation goals) differs from goal setting features for exploitation (referred to as operational goals). This research has been conducted as case study at Sandvik Coromant, where both qualitative and quantitative data was collected. Interviews and surveys were done with the help of 32 managers from different departments and managerial levels. The findings are limited to R&D manager’s perceptions of goal setting. Findings show that rationales for establishing innovation goals are; to directing attention towards- and inspire exploration, to bring innovation to a concrete level and create knowledge, to satisfy prerequisites of innovation and/or innovation culture, to come up with new ways of working or improving processes, and to generate new ideas or/and present and implementing them. Hinders affecting goal commitment were identified as the following; misconceptions about innovation from defining it as output only, failing to convince individuals that the goal program is important and lack of resources. Further, according to this study goals for innovation differ from goals for operational activities. Goal features preferred for the two were opposites to each other. Goal features for operational activities aim to reduce variance and control the performance outcome, whereas goal features for innovation aim to trigger essential parts of innovation such as creativity, learning and experimentation, and therefore increases variance.