How leadership shapes innovation in high-power-distance SMEs: Mixed methods evidence from Singapore’s precision engineering sector

This study investigates how leadership styles influence innovation within small and medium-sized enterprises (SMEs) operating in Singapore’s precision engineering sector—a key industry aligned with the national Smart Nation Vision. Employing a mixed methods design, the research integrates qualitative insights from semi-structured interviews and focus groups with quantitative data derived from a structured survey of 128 employees. The qualitative findings show strong convergence between senior managers and engineers on the importance of open communication, empowerment, teamwork, and transparency. Thematic analysis also showed that leaders who balance stability with change, and who encourage experimentation, were perceived as most effective at supporting innovation. The results demonstrated that innovation leadership significantly predicts organizational innovation, while expertise-based and inspirational leadership show no significant impact. One-way ANOVA confirms that firms led by innovative leaders exhibit higher levels of innovation than those under traditional leadership styles. The findings highlight the importance of hybrid leadership approaches—transformational, adaptive, and technical—to foster innovation and organizational adaptability in Singapore’s hierarchical business culture. Practical implications include recommendations for leadership development programs targeting emotional intelligence, communication, and mentoring. The study provides insights and guidance for policymakers and practitioners aiming to strengthen SEMs innovation capacity through targeted leadership and talent development initiatives.