#240 from R&D InnovatorVolume 5, Number 10          October 1996

Setting Goals to Get Innovation
by Christina E. Shalley, Ph.D. and Edwin A. Locke, Ph.D.

Dr. Shalley is associate professor of organizational behavior and human resource management in the DuPree School of Management, Georgia Institute of Technology, Atlanta.  Dr. Locke is professor of management and organization in the College of Business and Management University of Maryland, College Park.

Innovation is a key method by which organizations gain competitive advantage in the marketplace.  Innovation requires creative thinking.  But how do you get it?  Our surprisingly simple answer is:  Set goals for it!

Goal Setting Theory

Goal-setting theory, developed by Edwin A. Locke and Gary Latham, is the most thoroughly validated motivation theory in the field of management.  Here’s what goal setting researchers have discovered:

*  People accomplish more when they’re trying for performance goals which are both difficult (challenging, even impossible) and specific (clear) than when they’re trying for any other type of goal (such as “do your best” or “work hard”)

*  Goals are most likely to be attained when people are strongly committed to the goals and are given feedback showing their progress in relation to the goals

*  People are most likely to set high goals and be committed to them when they have high self-efficacy (task-specific self-confidence)

*  Goals regulate action directly by affecting what people pay attention to, how hard they work, and how long they work

*  Goals affect action indirectly by motivating people to discover and utilize task strategies which will facilitate goal achievement

*  Incentives must not discourage risk-taking, such as trying for nearly impossible goals

Goals and Creativity

In a series of studies examining how organizations can structure jobs and the work environment to stimulate employees to be more creative, Christina Shalley found that setting creativity goals leads to higher levels of individual creative performance.  Furthermore, creativity goals can be effectively assigned, along with other types of goals, such as productivity goals.  But if goals for creativity are not established, and goals are assigned for other aspects of performance, creative performance is significantly less likely to occur.  In a recent study, it was found that the highest levels of creativity occurred when individuals were assigned goals to be creative, worked alone (free from monitoring and interruptions), and expected their performance to be evaluated constructively (so there was both support and accountability). 

Theresa Amabile and Stanley Gryskiewicz obtained similar results from an interview study they conducted with R&D professionals.  They found that a critical factor for high creativity is management setting clear overall goals while allowing individuals to have operational freedom in achieving those goals.  Also, they found that low levels of creativity occurred when it was unclear what was desired by management and no goals were set. 

Based on these research studies, it seems that the best practice to encourage creativity would be for managers to set clear goals for creativity and then provide freedom, with appropriate support, for employees to accomplish their goals.  Furthermore, management can facilitate creativity by providing the right environment where employees are free to work away from distractions and where they can expect to receive constructive feedback on their progress toward goal attainment.

Application

These studies validate what Tom Peters said some years ago in Thriving on Chaos.  If you want more innovation, ask for it.  This advice is not idle chatter.  3M Company, which has a long record of successful innovation, requires that 25% of each year’s revenue come from products that did not exist five years ago.  And, usually, they get it.

Let’s consider, specifically, how to apply goal-setting principles to the sphere of creative achievement.

1.         Set clear, hard goals and deadlines for what needs to be accomplished (e.g., 10 new products in the next year; a new product that’s better and cheaper than the best of our competitor’s by the end of the year; 25 significant improvements in existing products over the next 6 months, etc.).  By defining what you want your employees to accomplish specifically within an exact time span, you’ve done two things:  helped your employees know clearly what needs to be done within a certain time frame so that they can strategize and work accordingly, and also, clarified your thinking on the issue.

2.         Get commitment by making it clear why the innovations are important (e.g., they increase profits, upgrade employee skills and competencies, open up new opportunities for company and employee growth, enhance job security and yield pay bonuses).  Since it takes a great deal of hard work to be creative, without goal commitment you cannot expect to have high levels of creative performance.

3.         Make sure creators track their progress over time so they can see if they’re ahead of or behind schedule.  Feedback on goal progress and goal attainment is critical.  However it must be stressed that creative work doesn’t always proceed in a linear fashion— it often goes in spurts or fits and starts.  Thus, progress may be rapid at certain times and very slow at others.  Slow progress may be a signal to intensify effort or change strategies. Therefore, creators should be encouraged, and trained, in how to gauge their progress on a project and keep themselves on schedule.

4.         Specify how performance will be measured and rewarded.  For creative performance to occur, typically some level of risk-taking is required.  Employees need to know that it is okay to fail (particularly in the beginning stages of a project), and that risk-taking (within certain bounds) will not be punished, while creativity will be rewarded.

5.            Measure performance in terms of results or outputs not inputs (e.g., time spent).  Urge employees to spend whatever time and effort it takes to get the job done.  (At Microsoft and EDS the younger employees sometimes sleep under their desks in emergencies).  Creativity sometimes involves bursts of thought, where trying to keep to the more traditional 9 to 5 work schedule may be unrealistic and counterproductive.  Essentially, when creators feel a breakthrough has been achieved (or is about to come), they should be encouraged to go with it -- continuing until they feel like their ideas and effort are spent.  At other times, it might be best to quit work early and get a fresh start on the problem the next day.  And still at other times, long hours may be necessary just to get a grasp on defining clearly what the problem is that needs to be worked on.

6.         When there is more than one performance goal, rate the goals as to their importance so that goal priorities are known and understood.  For example, if employees are given one goal of creating 10 new products in the next year, and another goal of reducing costs in their area by 25% in the same year, are both goals equally important?  If one goal is achieved (e.g., the reduction of costs) and only 2 new products are created is that as desirable as attaining the goal of 10 new products in the next year but with only a 4% reduction in costs in the area?  By having a shared understanding of goal priorities, especially when there may be some goal conflict, creativity is more likely to flourish.

7.         If time and effort aren’t doing the job, urge creators to try different approaches (e.g., new strategies).  Encourage them to think “outside the square.”  This is especially critical if the goal seems impossible, because standard operating procedures simply will not work.  Often, it is helpful to provide training in creative thinking techniques.  Another technique that can work is encouraging staff to take time off from one project, and switch to another for a short while.  The creative thought process can benefit by incubation (when the mind is not actively working on the problem but subconscious processes are still operating).  Frequently, after a period of incubation, individuals will experience a breakthrough.

8.         Inspire and build employee confidence.  Only pick the best people for the toughest jobs and make sure they know why they were picked.  Assuming the employees are carefully selected and well-trained, tell them that you believe them to be highly efficacious and fully expect them to succeed.

9.         Help employees to determine coordination requirements.  If achieving goals depends on cooperation or contribution of others, then coordination is needed; otherwise, there’s a potential for conflict.  Although conflict, at times, can be beneficial for creativity, the manager’s job should be that of a goal facilitator.  The manager should help resolve any coordination problems that could lead to unnecessary or dysfunctional conflict.

10.        Use incentives, but be careful.  Friendly competition between two groups working on the same task can be motivating; give a reward to the winner.  If both groups have a partial solution, combine their ideas as appropriate and reward both.  Make sure nobody is always in a losing group unless you want them to quit.  If success is an all-or-none affair (e.g., either it works or it doesn’t), give bonuses only for success but never punish a good try, show appreciation for the effort.  If success is on a continuum (e.g., the quality improvement goal is 150% but they attain only 110%) reward them for getting close to the goal.  Use recognition in addition to monetary incentives.  Use other incentives as well, for example, allowing outstanding performers to spend time on projects of their own choice.

Managing for Creativity

Increasingly, CEO’s are pressuring R&D groups to make their functions more practically oriented.  Enabling employees to be creative and innovative is critical in adding value to the organization.  Managers frequently complain that their creative people are difficult to manage.  This is, in part, because the creative process is difficult to manage.  But also, creative people tend to be very independent.  Creative people don’t want to be micro-managed, they desire autonomy, and want to participate and make decisions with a minimum degree of supervision -- they want to have the opportunity to test their own ideas.  Furthermore, creative people can easily become bored and distracted. 

Goal setting can serve a critical role in stimulating innovation because goals help to keep creative people challenged, keep them on the right path, and provide a sense of purpose -- which, together, should stimulate creativity.  Goals help direct attention to what needs to get done, and influence several of the cognitive activities needed for creativity.  For instance, search for viable alternatives must be focused and not random in order to be effective.  Goals help determine where to search for information and how to evaluate the information obtained as to its usefulness.  Creative people will respond to assigned goals from managers as long as they are committed to the goals and empowered with respect to how to go about achieving the goals.  Creative people need to have a goal to work towards no matter how impossible or unattainable -- they don’t mind working hard as long as they are challenged. 

Many managers can relate to the experience of assigning a goal that seemed nearly impossible and having their creative people work hard and effectively to attain it.  So managers should assign challenging goals and then step back and allow employees to decide how to meet them.  Ultimately, if the corporate culture values independent thinking and risk-taking, supports and rewards hard work and creativity, and encourages commitment to challenging goals, while reducing barriers that stand between employees and the attainment of those goals, innovation should flourish.

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