The Effectiveness of Digital Leadership in Promoting Employee Engagement and Organizational Innovation

Rapid technological advancement has intensified the need for leadership approaches capable of guiding organizations through digital transformation while sustaining high levels of employee motivation and creativity. Digital leadership, defined as the ability to integrate digital competencies with vision-building, communication, and people-oriented influence, has emerged as a critical factor in shaping organizational adaptability and innovative capacity. Despite its growing importance, empirical understanding of how digital leadership affects employee attitudes and innovation-related outcomes remains limited. This article addresses this gap by examining the effectiveness of digital leadership in promoting employee engagement—characterized by vigor, dedication, and absorption—and subsequently organizational innovation, conceptualized through employees’ innovative work behaviors. Grounded in contemporary leadership and innovation theories, the study proposes a mediation model in which employee engagement acts as the psychological mechanism through which digital leadership fosters innovation. Using validated measurement instruments and a quantitative research design, data were collected from employees across technology-intensive and knowledge-based sectors. Structural equation modelling was employed to assess both direct and indirect effects. Results demonstrate that digital leadership is strongly and positively associated with employee engagement, and engagement significantly predicts innovative work behavior. Mediation analyses further confirm that engagement partially mediates the relationship between digital leadership and innovation, suggesting that digitally competent leaders influence innovation not only through technology-driven processes but also by shaping employees’ motivational and cognitive states. The findings contribute to both theory and practice by clarifying the behavioral pathways that connect digital leadership with innovation outcomes. Practically, the study underscores the importance of developing digital leadership capabilities and designing work environments that strengthen engagement, thereby enabling organizations to sustain innovation in rapidly evolving digital contexts.