Balancing Formalization and Climate in the Front End of Innovation

The front end of innovation, where ideas are originated, implemented, and further developed, is often considered to have the greatest potential for improvement in innovation. A major dilemma in the front end is the tension between the equally important needs for creativity and for control and reduction of uncertainties. Research on individual creativity posits that formal rules and structures hinder creativity, while a climate of encouragement and autonomy promotes employee creativity. Research on innovation processes suggests a formal innovation system helps to implement ideas and reduce uncertainty. This study investigates the interplay of formalization and innovation climate in their influence on idea generation and reduction of uncertainty. Hypotheses are tested using a sample of 70 R&D groups consisting of 380 employees and their supervisors combined with objective data on invention disclosures. The results show that formalization supports uncertainty reduction and climate fosters idea generation, re...