Enhancing service innovation and organizational performance in Knowledge-Intensive Business Services firms: the role of leadership and communication

Purpose This study aims to assess the impact of transformational leadership (TL) on integrated marketing communication (IMC) to understand the impact of both service innovation performance (SIP) and organizational performance (OP), also investigating the mediating effect of SIP. Design/methodology/approach The authors applied an e-survey to leaders from 358 Brazilian firms classified as Knowledge-Intensive Business Service (KIBS). Data were analyzed by confirmatory factor analysis using structural equations modeling by the partial least squares technique. Findings The results of this study indicate a positive impact of TL on IMC, suggesting that it can contribute to the effective implementation of the IMC process. Additionally, TL and IMC showed direct positive relationships with SIP and OP. Mediation analysis of SIP in the relationship between TL, IMC and OP was not statistically significant. This result suggests that the analyzed KIBS firms focus more on innovation to enhance services and customer experience. Research limitations/implications This study provides valuable theoretical contributions by addressing gaps in the literature regarding the relationship between TL and IMC with innovation and OP. This study specifically focuses on the service sector, proposing the validation of IMC and SIP scales within the context of KIBS. Practical implications From a managerial standpoint, this research underscores the critical role of TL and strategic communication in driving innovation and performance within KIBS. This study finds that innovations in KIBS are primarily internal and incremental, necessitating active customer participation. Effective IMC plays a pivotal role in enabling the development of new services. Therefore, to remain competitive, companies should prioritize investments in leadership development programs and integrated communication systems. Social implications The positive relationship between TL, IMC, innovation and OP has broader social implications. By promoting innovation and improving organizational outcomes, these practices can contribute to economic growth and societal well-being. While the direct impact on public policy may be limited, insights from this study can inform policymakers about the importance of leadership and communication in fostering a productive and innovative business environment. Originality/value The research results provide theoretical contributions by highlighting service innovation in a global economic context, the relationship between leadership and communication and responding to calls for more empirical studies of IMC. Practical contributions for KIBS indicate investments in both TL and IMC to drive innovation and performance. Social contributions align with the United Nations SDGs 8 and 9 from the 2030 Agenda.