CEO leadership and climate

There is a gap in the literature to explain how CEO transformational leadership and climate interact and have an impact on innovation (Bledow et al., 2011). Scholars argue that innovation requires a supportive environment to generate better innovation performance; however, it is not clear how transformational leadership and climate are related (Brettel and Cleven, 2011). Jansen et al. (2009) clarify that transformational leadership behaviors influence the adopting of generative thinking and pursuing organizational innovation. A recurrent theme in the literature is that other internal factors beyond CEO leadership, such as organizational culture and structure, may also impact organizational innovation ( Johannessen, 2009; Waite, 2013). It has been suggested that more research is needed that investigates transformational leadership of CEO and its impact on innovation climate.

Stages of innovation

A useful framework for understanding innovation is looking at innovation in phases, and furthermore, exploration and exploitation activities occur across these innovation phases (Stefan and Bengtsson, 2017). Each step in innovation, the ideation and exploitation phases require transformational leadership, and an innovation climate behavior (Hsu and Fan, 2010; Lueneburger and Goleman, 2010). During these stages, organizational innovation requires an integration of the dual elements of both instability and stability. The difficulty is that innovation requires a commitment to simultaneously, and sometimes sequentially, maintaining high levels of both innovation and control. There are many challenges associated with creating a high level of agility and responsiveness and at the same time ensuring that stable structures and processes deliver consistent results. Inherently, exploration and exploitation can encompass potentially conflicting activities (Melkas et al., 2017). This challenging balancing of organizational energy between these two dimensions is demanding for the organization, and it is in through this ambidexterity that innovation and control co-exist (Cembrero and Sáenz, 2018; Smith et al., 2017).