Organizations increasingly ask teams to stimulate innovation but research is needed to identify the conditions when teams have the confidence and persistence to innovate successfully. Using the concepts of cooperation, competition, group potency and initiative, this study proposes that relationships where team members believe that their goals are cooperative in that one person's goal attainment helps others reach their goals lay the foundation for innovation. Specifically, cooperative goals convince team members that they have the group potency to complete a range of tasks and the initiative to persist to overcome obstacles and innovate. In contrast, competitive, negatively related goals and independent, unrelated goals are hypothesized to undermine confidence, persistence and innovation. Group members from 101 teams from various organizations in Shanghai, China, completed a survey with measures of cooperative, competitive and independent goals, group potency, and initiative; their project leader completed the measure of innovation. Structural equation analysis supports the theoretical framework that cooperative goals help group members develop the confidence of group potency and the initiative to persist to accomplish tasks and innovate. These results suggest that cooperative goals and group potency and initiative are important conditions that help teams innovate for organizations and thereby specify conditions that can help groups realize their potential to achieve innovation for organizations.