Why Territorial Managers Stifle Innovation and What to Do About It

Managers who feel insecure about their status tend not to encourage novel ideas from their employees. Fostering their identification with the organization can change this behavior.

- Vijaya Venkataramani, Rellie Derfler-Rozin, Xin Liu, and Jih-Yu Mao

Dilip has been working hard on a game-changing idea for a new product. But when he excitedly approaches his boss to share it and get approval for further development and testing, his proposal is quickly rejected. Instead of offering constructive feedback on how to make the idea workable, his boss vaguely refers to a lack of budget and discourages Dilip from pursuing any further ideas.

Sound familiar? Sadly, such scenarios are all too common in many organizations.

Employee creativity and innovation are critical to the success of organizations today. However, when employees do generate novel ideas, they often fail to receive encouragement or see their ideas materialize. Managers are a significant contributor to this phenomenon; even when they profess to value creativity, they routinely reject innovative ideas proposed by employees, preventing their implementation. Why do managers say no to ideas that could benefit their companies and even themselves?

Researchers have so far focused on personality factors, managers’ economic mindsets, or managers’ general aversion to uncertainty as explanations for this stifling of employee ideas. For example, one study has suggested that because managers are always focused on the financial consequences of their decisions, they reject novel ideas whose financial outcomes cannot be reliably forecast. However, as we discuss in our paper in Organization Science, there are deeper reasons for such rejection, rooted in managers’ self-interests, underlying fears, and insecurities.