This chapter investigates how emotions and values play a role in institutional innovation. Based on a qualitative study of two global faith-based organizations, the chapter demonstrates how emotional reactions on the part of organizational actors initiated values work in terms of group reflection practices in emotionally safe spaces. These organizational practices, in turn, stimulated and sustained institutional innovations, such as new mindsets, relations, structures, and decision-makingdecision-making processes in the organizations. The presented process model for institutional innovation shows that conditions at the micro, meso, and macro levels affect the innovation process. The formative cross-cultural experiences of individual actors (micro); safe spaces, and storytelling practices in the organizations (meso), and contextual changes in the field (macro) were identified as factors facilitating the process of institutional innovation. The chapter also highlights how significant diversity among organizational actors during group reflection practices benefits institutional innovation, as various worlds of concern meet and create awareness of current institutional arrangements. This reflection in safe spaces may enable participants to reorient their prevailing habits, which is key to institutional innovation.