Leadership for Innovation: Exploring the Influence of Transformational Leadership on Creativity and Innovation in Banks

Business Management Program, School of Business and Management, Petra Christian University Jl. Siwalankerto 121-131, Surabaya

^* Corresponding author: sherlytanoto@petra.ac.id

Abstract

In today's rapidly evolving banking industry, innovation is paramount for organizations to remain competitive and adapt to shifting market demands. Transformational leadership, known for its ability to inspire and motivate followers toward a shared vision, is pivotal in driving organizational innovation. However, the specific mechanisms through which transformational leadership influences innovative work behavior in the banking sector still need to be fully understood. This study explores the intricate relationship between transformational leadership, creativity, and innovative work behavior within banking organizations. By investigating whether transformational leadership directly impacts innovative work behavior or if employees' creativity mediates its influence, this research seeks to shed light on the underlying dynamics. Quantitative methods and structural equation modeling were employed to analyze data collected from 214 bank employees in Indonesia. The study assessed transformational leadership's direct and indirect effects on innovative work behavior through the lens of creativity as an intervening variable. The findings of this research offer valuable insights into how leadership, creativity, and innovation intersect within banking organizations. Understanding these dynamics can inform strategies for leadership development and organizational culture enhancement to foster innovation. Ultimately, such insights can drive organizational performance and competitiveness in the dynamic banking industry.