The Effect of Transformational Leadership on Employees’ Innovation Passion—The Dual Mediating Role of Learning from Entrepreneurial Failure and Feeling of Failure Inclusion in the Organization ()
1. Introduction
Innovation is the first power to lead the development, adapt to and lead the new normal of China’s economic development, and the key is to rely on scientific and technological innovation to transform the power of development (Amabile, 1988). The realization of sustained innovation in enterprises not only requires resource input, but also relies on the spontaneous exploratory behavior of individuals (Pisano & Teece, 2007). Organizational behavior research reveals that employee innovation passion, which refers to a strong and enduring positive affective state experienced by individuals during innovation activities, encompassing the two dimensions of harmonious innovation passion and obsessive-compulsive innovation passion (Vallerand & Houlfort, 2003), acts as an affective hub connecting cognitive resources to innovation outputs (Cardon et al., 2013). It is capable of stimulating exploratory learning behaviors and driving knowledge creation. However, the high-risk characteristics of innovation itself may reduce the motivation of employees to innovate, so how enterprise leaders can stimulate the innovation passion of their employees by allowing them to continuously generate new ideas through more efficient management has become an urgent breakthrough in the field of enterprise management.
As the decision maker and navigator of the enterprise, the leader’s leadership style plays an important role in the development of the enterprise and the behavior of the employees (Liang, 2022). Transformational leadership has a unique motivation and empowerment mechanism (Chen et al., 2015). Compared with other leadership styles, transformational leadership does not only stop at the level of external motivation, but also effectively stimulates the autonomy and creativity of employees through emotional resonance and value recognition (Yang et al., 2021). Therefore, in the paper we focus on the mechanisms by which transformational leadership influences employees’ innovation passion.
Failure is the mother of success. Failure is not the end of the road in the innovation process, but an important opportunity to rediscover opportunities and reconfigure knowledge. Learning from entrepreneurial failure is a process of reconceptualizing and updating knowledge so as to optimize the innovation approach, and it is a positive reaction of the individual employee in the face of innovation failure. Intellectually stimulating behaviors of transformational leadership can effectively guide employees to systematically analyze the causes of failure, transform the frustrating experience at the emotional level into learning opportunities at the cognitive level (Zhang et al., 2024), and further stimulate innovation passion. In this research context, we focus on the failures encountered by employees when attempting to innovate within an organization and their learning processes, rather than narrowly defined entrepreneurial failure.
In addition, the feeling of failure inclusion directly reflects the degree of organizational support for innovation activities, and such a fault-tolerant culture not only provides employees with a sense of psychological security and encourages them to actively take innovation risks (Luo et al., 2024), but also directly influences employees’ willingness to innovate and their behaviors. Existing studies have mostly focused on the single mediating effect of learning from failure or feeling of organizational inclusion, so we start from the dual perspectives of employee behavior and work climate, and simultaneously use learning from failure and feeling of organizational inclusion as mediating variables to clarify the mechanism of transformational leadership’s influence on employees’ innovation passion.
2. Research Hypothesis and Theoretical Basis
2.1. Transformational Leadership and Innovation Passion
According to social exchange theory, the interaction between an individual and an organization is essentially a resource exchange process (Homans, 1958), whereby employees perceive the support provided by transformational leadership as an organizational input, which in turn is reciprocated by heightened innovation passion. In terms of goal perception, transformational leadership creates an innovative atmosphere, organically combines organizational innovation goals with the realization of employees’ personal values through visionary incentives, prompts employees to self-learning, and stimulates innovative thinking (Cai et al., 2015). In terms of resource support, transformational leadership provides employees with differentiated innovation resource support through personalized care to reduce the perceived barriers in their innovation process (Zhang et al., 2024). In terms of intellectual stimulation, transformational leadership breaks down the stereotypical thinking of employees and promotes the generation of innovative inspiration by organizing and holding innovation seminars and other activities. In terms of virtues, transformational leadership creates an innovation demonstration effect within the organization, leading employees to maintain a continuous innovation passion. This multi-layered leadership style inspires innovation passion in employees and puts it into action. Based on this, we propose the hypothesis:
H1: Transformational leadership has a significant positive effect on employees’ innovation passion.
2.2. The Mediating Role of the Learning from Entrepreneurial
Failure
In terms of organizational culture, transformational leadership actively promotes an open and inclusive culture, lets employees know that failure is an inevitable part of the innovation process, and motivates employees to be brave enough to try new things (Zhang et al., 2024). In terms of guidance and support, transformational leadership understands and supports employees who are in the midst of innovation failures, helps employees analyze the reasons for failure and learn from their experiences, and allows employees to view failure as an opportunity to improve their capabilities. Thus, transformational leadership has a positive impact on learning from entrepreneurial failure.
In the process of failure analysis, employees gain a deeper understanding of the nature of the problem and adopt a targeted approach to enhance their innovation capabilities. When employees successfully gain experience from entrepreneurial failure, not only can they update their way of thinking, but also enhance their sense of self-efficacy, which makes them more willing to accept the challenge of innovation, forming a virtuous cycle of “failure - learning from entrepreneurial failure - try again”, and finally forming a continuous innovation passion. Thus, learning from entrepreneurial failure has a positive impact on innovation passion. Based on this, we propose the hypothesis:
H2: Learning from entrepreneurial failure mediates the relationship between transformational leadership and employees’ innovation passion.
2.3. The Mediating Role of the Feeling of Failure Inclusion
Transformational leadership actively creates a participatory organizational ecology that eliminates the vertical power distance of the traditional hierarchical structure and allows the flow of information between the top and bottom levels to break through the hierarchical filtering mechanism. When employees experience failure, transformational leadership communicates with them in an understanding and encouraging manner, guiding them to view failure correctly and treat it as an opportunity for learning from entrepreneurial failure and growth. This positive feedback conveys to employees that the organization is tolerant of failure, allowing employees to enhance their perception of failure inclusion in the organization (Luo et al., 2024). Thus, transformational leadership has a positive impact on the feeling of failure inclusion in the organization.
The feeling of failure inclusion in the organization provides a psychologically safe environment for employees, and in such a supportive atmosphere, employees are more likely to think outside the box and actively explore new ways of working. In addition, the feeling of failure inclusion can improve knowledge sharing and collaboration among team members, and when employees are confident that the organization understands and supports their attempts to innovate, their commitment to innovation as well as their continuity will be significantly improved (Luo et al., 2024). Based on this, we propose the hypothesis:
H3: The feeling of failure inclusion mediates the relationship between transformational leadership and employees’ innovation passion.
The specific research model is shown in Figure 1.
Figure 1. Research model.
3. Research Design
3.1. Research Sample
We selected the employees of Beijing science and technology-based enterprises as the research object. Before formally conducting the questionnaire work, we selected 2 employees from each of the different departments, a total of 12 people to conduct a pre-survey, in order to get a preliminary understanding of the departmental employees’ perception of the leadership style. Feedback was also collected through trial completion of the questionnaire, and changes were made to the questionnaire setup where there were unreasonable elements. The finalized questionnaire included five sections: basic personal information, perception of transformational leadership style, learning from failure, feeling of entrepreneurial failure inclusion, and innovation passion.
The formal survey began in February 2024 and ended in March 2025, with 500 questionnaires distributed. After excluding invalid questionnaires with short response time and high repetition rate of responses, 451 valid questionnaires were finally recovered, with an effective recovery rate of 90.2%. The sample distribution of valid questionnaires is shown in Table 1.
Table 1. Sample distribution.
Statistical category |
Index |
Number |
Frequency (%) |
Sex |
Man |
249 |
55.2 |
Woman |
202 |
44.8 |
Age |
18 - 25 years old |
103 |
22.8 |
26 - 35 years old |
168 |
37.3 |
36 - 45 years old |
133 |
29.5 |
Over 45 years old |
47 |
10.4 |
Years of experience |
Less than 1 year |
111 |
24.6 |
1 - 3 years |
126 |
27.9 |
4 - 5 years |
124 |
27.5 |
Over 5 years |
90 |
20.0 |
Type of position |
Grassroots staff |
237 |
52.5 |
Technical/R&D staff |
183 |
40.6 |
Middle managers |
24 |
5.3 |
Top managers |
7 |
1.6 |
Education
background |
High school/technical
secondary school |
33 |
7.3 |
Junior college |
102 |
22.6 |
Bachelor degree |
269 |
59.6 |
Master degree and above |
47 |
10.4 |
Department |
Business development |
52 |
11.5 |
R&D center |
114 |
25.3 |
Operation center |
75 |
16.6 |
Integrated center |
74 |
16.4 |
Engineering center |
83 |
18.4 |
Marketing center |
53 |
11.8 |
3.2. Variable Measurement
(1) Dependent variable: Innovation passion. We referred to Cohen & Levinthal (1990), Kostopoulos et al. (2011), Vallerand & Houlfort (2003), and Zahra & George (2002) to develop the innovation passion scale, which is divided into two dimensions of harmonious and obsessive-compulsive innovation passion, with 12 items. Harmonious innovation passion is represented by items such as “I prefer innovative activities”. Obsessive-compulsive innovation passion is represented by items such as “I have a feeling of being completely controlled by the innovation activity”. Cronbach’s α for the innovation passion scale is 0.936.
(2) Independent variable: Transformational leadership. We referred to Mackenzie et al. (2001) to develop the transformational leadership scale, which is divided into four areas of core transformational leadership, high performance expectation, personalized care, and intellectual stimulation, with a total of 14 items. Core transformational leadership is represented by items such as “My supervisor clearly articulated a shared vision for us.” High performance expectation is represented by items such as “My supervisor expects me to give my best at all times.” Personalized care is represented by items such as “My supervisor takes my personal feelings into account before taking action.” Intellectual stimulation is represented by items such as “My supervisor encourages me to think creatively about old problems”. Cronbach’s α for the transformational leadership scale is 0.939.
(3) Mediator variable: Learning from entrepreneurial failure. We referred to Tucker & Edmondson (2003) and Carmeli (2007) to develop the learning from entrepreneurial failure scale, which consists of 7 items, represented by items such as “When I encounter a problem, I will proactively think of a solution and give feedback to the management in a timely manner”. Cronbach’s α for the learning from entrepreneurial failure scale is 0.890.
(4) Mediator variable: Feeling of failure inclusion. We referred to Tang et al. (2015) to develop the feeling of failure inclusion scale with 4 items, represented by items such as “I feel that my superiors and colleagues are accepting of my shortcomings”. Cronbach’s α for the feeling of failure inclusion scale is 0.816.
(5) Control variables. Employee’s sex, age, years of experience, type of position, education background and department are selected as control variables according to the characteristics of science and technology-based enterprises.
The results of the validity tests for all scales are shown in Table 2. The results showed that the KMO of all the scales were greater than 0.7, and the Bartlett’s test of sphericity was significant, so the scales involved in the paper have good structural validity.
Table 2. Validity test results.
Scale |
Number of items |
KMO |
Degrees of freedom |
Bartlett |
Transformational leadership |
14 |
0.973 |
91 |
0.000 |
Innovation passion |
12 |
0.969 |
66 |
0.000 |
Learning from entrepreneurial failure |
7 |
0.926 |
21 |
0.000 |
Feeling of failure inclusion |
4 |
0.807 |
6 |
0.000 |
4. Empirical Analysis
We utilized SPSS 26.0 for all empirical data analysis.
4.1. Descriptive Statistics and Correlation Analysis
The results of descriptive statistics and correlation analysis for all core variables are shown in Table 3. There was a positive correlation between transformational leadership and innovation passion (r = 0.942, p < 0.01), learning from failure (r = 0.914, p < 0.01), feeling of entrepreneurial failure inclusion (r = 0.884, p < 0.01). Learning from failure was positively correlated with innovation passion (r = 0.912, p < 0.01). Feeling of failure inclusion was positively associated with innovation passion (r = 0.873, p < 0.01). The results of the correlation analysis were as expected and provided support for the subsequent regression analysis.
Table 3. Descriptive statistics and correlation analysis results.
Variable |
1 |
2 |
3 |
4 |
1. Transformational leadership |
1 |
|
|
|
2. Innovation passion |
0.942*** |
1 |
|
|
3. Learning from entrepreneurial failure |
0.914*** |
0.912*** |
1 |
|
4. Feeling of failure inclusion |
0.884*** |
0.873*** |
0.852*** |
1 |
Average |
3.508 |
3.491 |
3.494 |
3.458 |
Sd. |
0.759 |
0.795 |
0.796 |
0.824 |
Note: *** indicates p < 0.01.
4.2. Hypothesis Testing
We apply hierarchical regression methods to test hypotheses about main and mediating effects.
(1) Main effects test. The main effects test results are shown in Table 4. Model 1 shows that the regression coefficient of transformational leadership on innovation passion is significantly positive (β = 0.987, p < 0.01). Model 2 shows that the regression coefficient of transformational leadership on innovation passion remained significantly positive after adding all control variables (β = 0.946, p < 0.01). Therefore, transformational leadership has a significant positive effect on innovation passion, as validated by H1.
Table 4. Main effects test results.
Variable |
Innovation passion |
Model 1 |
Model 2 |
Transformational leadership |
0.987*** (0.017) |
0.946*** (0.017) |
Sex |
|
0.012 (0.025) |
Age |
|
0.004 (0.013) |
Years of experience |
|
0.013 (0.016) |
Type of position |
|
0.023 (0.012) |
Education background |
|
0.019 (0.021) |
Department |
|
0.013 (0.009) |
F |
3527.404 |
503.622 |
Adj R2 |
0.887 |
0.887 |
VIF |
1 |
<10 |
Note: *** indicates p < 0.01, the values in parentheses are standard errors.
(2) Moderating effects test. The mediation effect test results for learning from entrepreneurial failure are shown in Table 5. Model 3 shows that the regression coefficient of transformational leadership on learning from entrepreneurial failure was significantly positive (β = 0.915, p < 0.01). Model 4 shows that the regression coefficient of learning from entrepreneurial failure on innovation passion is significantly positive (β = 0.914, p < 0.01). Model 5 shows that regressing both transformational leadership and learning from entrepreneurial failure on innovation passion, the regression coefficient of learning from entrepreneurial failure on innovation passion is still significantly positive (β = 0.318, p < 0.01), and the regression coefficient of transformational leadership on innovation passion has decreased (β = 0.655, p < 0.01). Thus, learning from entrepreneurial failure partially mediates the relationship between transformational leadership and innovation passion, as validated by H2.
Table 5. The mediating effect results of learning from entrepreneurial failure.
Variable |
Learning from entrepreneurial failure |
Innovation passion |
Model 3 |
Model 4 |
Model 5 |
Transformational leadership |
0.915*** (0.02) |
|
0.655*** (0.038) |
Learning from
entrepreneurial failure |
|
0.914*** (0.019) |
0.318*** (0.036) |
Sex |
−0.010 (0.031) |
0.015 (0.031) |
0.016 (0.024) |
Age |
−0.005 (0.016) |
0.014 (0.016) |
0.005 (0.012) |
Years of experience |
−0.021 (0.019) |
0.030 (0.019) |
0.020 (0.014) |
Type of position |
0.011 (0.014) |
−0.001 (0.014) |
0.020 (0.011) |
Education background |
0.010 (0.025) |
0.008 (0.025) |
0.015 (0.019) |
Department |
−0.020 (0.011) |
0.032 (0.011) |
0.019 (0.008) |
F |
322.305 |
320.001 |
526.061 |
Adj R2 |
0.833 |
0.832 |
0.903 |
VIF |
<10 |
<10 |
<10 |
Note: *** indicates p < 0.01, the values in parentheses are standard errors.
The mediation effect test results for the feeling of failure inclusion of the organization are shown in Table 6. Model 6 shows that the regression coefficient of transformational leadership on the feeling of failure inclusion in the organization is significantly positive (β = 0.892, p < 0.01). Model 7 shows that the regression coefficient of feeling of failure inclusion on innovation passion is significantly positive (β = 0.871, p < 0.01). Model 8 shows that when both transformational leadership and organizational feeling of failure inclusion were regressed on innovation passion, the regression coefficient of organizational feeling of failure inclusion on innovation passion remained significantly positive (β = 0.318, p < 0.01), and the regression coefficient of transformational leadership on innovation passion decreased (β = 0.779, p < 0.01). Thus, the feeling of failure inclusion in the organization partially mediates the relationship between transformational leadership and innovation passion, as validated by H3.
Table 6. The mediating effect results of feeling of failure inclusion.
Variable |
Feeling of failure inclusion |
Innovation passion |
Model 6 |
Model 7 |
Model 8 |
Transformational leadership |
0.892*** (0.024) |
|
0.779*** (0.035) |
Feeling of failure inclusion |
|
0.871*** (0.022) |
0.187*** (0.032) |
Sex |
0.026 (0.037) |
−0.021 (0.037) |
0.008 (0.025) |
Age |
0.019 (0.019) |
−0.005 (0.019) |
0.000 (0.013) |
Years of experience |
−0.007 (0.022) |
0.016 (0.022) |
0.014 (0.015) |
Type of position |
0.057 (0.017) |
−0.048 (0.017) |
0.013 (0.011) |
Education background |
−0.015 (0.030) |
0.030 (0.030) |
0.021 (0.020) |
Department |
−0.01 (0.02) |
0.023 (0.013) |
0.015 (0.008) |
F |
231.533 |
208.939 |
475.238 |
Adj R2 |
0.782 |
0.764 |
0.894 |
VIF |
<10 |
<10 |
<10 |
Note: *** indicates p < 0.01, the values in parentheses are standard errors.
To ensure that the results of the mediation effect are reliable, Bootstrap was used to test the mediating role of learning from entrepreneurial failure and the feeling of organizational inclusion, and the results are shown in Table 7. The value of the indirect effect of learning from entrepreneurial failure is 0.305 with 95% confidence interval of [0.238, 0.371] and the confidence interval does not contain 0. This suggests that there is a mediating role of learning from entrepreneurial failure between transformational leadership and innovation passion, and H2 is again validated. The value of the indirect effect of feeling of failure inclusion is 0.174 with 95% confidence interval of [0.118, 0.231] and the confidence interval does not contain 0. This suggests that there is a mediating role of feeling of failure inclusion between transformational leadership and innovation passion, and H2 is again validated.
Table 7. Bootstrap test results.
Path |
Efficiency |
SE |
LLCI |
ULCI |
Transformational leadership→Innovation
passion |
0.686 |
0.038 |
0.611 |
0.761 |
Transformational leadership→Learning from entrepreneurial failure→Innovation passion |
0.305 |
0.033 |
0.238 |
0.371 |
Transformational leadership→Feeling of
failure inclusion→Innovation passion |
0.174 |
0.019 |
0.118 |
0.231 |
It is worth noting that the regression coefficients for all control variables (sex, age, years of experience, type of position, educational background, and department) did not reach statistical significance (p > 0.05), indicating that these demographic and organizational background variables had no significant impact on employee innovation passion in this study.
5. Discussion and Prospect
5.1. Theoretical Contribution
First, it expands the explanatory boundaries of social exchange theory in the field of innovation management. We explain the impact of transformational leadership on employees’ innovation passion through the social exchange theory, break through the traditional single explanation of economic exchange dominating employees’ behavior. Traditional research typically emphasizes the direct motivational impact of economic exchanges, such as compensation and rewards, on employee behavior. We incorporate the leadership style and employees’ intrinsic emotional drive into the same research model, and elucidate the reinforcement path of the “psychological contract” in the organizational context.
Second, the construction of a two-level intermediary mechanism reveals a dual path to activate innovation passion. We have innovatively clarified the “black box” of transformational leadership’s effect on employees’ innovation passion from the dual perspectives of employee behavior and workplace climate.
5.2. Management Insight
First is to stimulate the intrinsic motivation of employees to innovate. As managers, they should be fully aware of their key role in promoting innovation, and actively build an attractive vision of innovation so that employees clearly understand the intrinsic relationship between innovation and personal growth and organizational development. Managers should have a deep understanding of the individual needs of employees, provide employees with one-on-one communication opportunities, give targeted support and resources to help employees solve the problems they actually face, and enhance employee job satisfaction and loyalty.
Second is to build a supportive innovation climate. Managers can set up a special sharing platform, with the help of regular case studies, experience exchange and other activities, to motivate employees to openly discuss the failure of the innovation process, and work together to find the causes of failure and improvement initiatives. Managers can build a more scientific and reasonable innovation evaluation system, which should not simply judge success or failure by the results, but should comprehensively consider the degree of effort, exploration direction and many other factors in the innovation process. But we also need to understand that fault tolerance is not a bottomless “umbrella”, but a reasonable space reserved for exploration and innovation.
5.3. Research Shortcoming and Prospect
First, although the results obtained from the questionnaire survey have a generalizability, there are bound to be differences between different companies and leaders, and the relationship between the variables can be more comprehensively analyzed in the future by combining the qualitative research method of case studies.
Secondly, the sample scope of this paper is limited and it is difficult to cover all industries, and the sample scope can be further expanded in the future to continue to verify the validity of the research results.
6. Research Conclusion
Taking employees of technology-based enterprises in Beijing, China, as the research object, we explored the mechanism of transformational leadership’s influence on employees’ innovation passion and verified the mediating role of learning from entrepreneurial failure and the feeling of organizational inclusion, and obtained the following conclusions:
First, transformational leadership positively influences employee innovation passion. Transformational leadership provides favorable conditions for employee innovation through multiple levels of cognition, atmosphere and resources, and promotes employees to actively engage in innovation activities, thus effectively stimulating employees’ innovation passion.
Second, learning from entrepreneurial failure mediates the relationship between transformational leadership and employee innovation passion. Transformational leadership creates an atmosphere conducive to innovation, so that employees dare to try new ideas and methods in their daily work, helps and guides employees to treat failure as a learning opportunity, and encourages employees to learn from entrepreneurial failure, so as to improve their personal capabilities and stimulate their innovation passion.
Third, there is a mediating role of feeling of failure inclusion in the organization between transformational leadership and employee innovation passion. Transformational leadership creates a culture of inclusiveness to increase the level of perceived organizational feeling of failure inclusion, giving employees a sense of psychological security, making them more willing to actively try out innovative activities and driving innovation passion.