The social process of innovation: The role of novelty and social cues in idea evaluation

• Applicant: Professor Dr. Linus Dahlander, Ph.D.
• Subject Area: Accounting and Finance
• Term: from 2018 to 2023
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 411843692

The proposed research project seeks to push the study of innovation. We look to advance the understanding of an important, yet understudied, phase of the innovation process: the evaluation of ideas proposed for innovation. To understand why some ideas gain support while others do not, we will focus on (1) the role of idea novelty and (2) the role of social cues in the idea evaluation process. As we intend to provide causal evidence on how managers evaluate ideas, we will conduct two field experiments within two organizations where employees generate ideas for innovation and senior managers evaluate them and decide on their implementation.Our research project will combine qualitative and quantitative methods and will proceed in three steps. The first step is a qualitative pre-study within the two organizations in which we will conduct the field experiments. We conduct the pre-study to gain a better contextual understanding of the companies’ innovation processes, and it will help us to design effective and appropriate experimental interventions. In the second step, we will collect the employees’ ideas and measure their novelty by topic modeling; a text-analytic method stemming from computer science that can be used to measure idea novelty based on the actual text describing an idea. In the third step, we will conduct the field experiments that analyze the role of novelty and social cues in the idea evaluation process. To do so, we will experimentally vary the conditions under which managers evaluate the proposed ideas.While evaluating and selecting ideas has become a key aspect of successful innovation, research on the idea evaluation process is still developing and far from complete. With the proposed research we seek to advance the literature on three accounts. First, the field experimental research design enables us to provide causal evidence on the effect of idea novelty and social cues on idea evaluation. Most of prior research has presented evidence based on correlations and has thus fallen short of this “gold standard.” Second, we make an important methodological contribution by measuring idea novelty based on the actual text describing an idea. Earlier research has largely relied on measures of combinatorial novelty using pre-established schemata, such as patent classes. In contrast, we will employ topic modeling to derive a content-based novelty measure. Third, we advance innovation research by studying the impact of social relationships and content in parallel. Whereas network research on innovation has been criticized for lacking consideration for content, and content studies have been disconnected from social structure, we seek to integrate social relations and content.The proposed project will advance theory on idea novelty and social cues, and it will push the research frontier by combining methods from computer science with field experimental designs enabling causal inference.

• DFG Programme: Research Grants