New sources of growth: The role of frugal innovation and transformational leadership

Abstract

This paper’s main thesis is that frugal innovation and transformational leadership offer additional sources of growth. Our main contribution is the proposal of what we refer to as the breakthrough possibility frontier (BPF) model, which integrates two aspects of leadership: innovation quality (frugal innovation) and leadership competency (transformational leadership). We test the BPF model on two groups of respondents, one group consisting of university students who had never been formal leaders and the other formal leaders who had office experience. The BPF analysis suggests that transformational leadership is a game changer, required for breakthroughs. Transformational leadership is key to encouraging innovation quality and leadership competency and, we argue, to facilitating new sources of growth. Our results imply the development of an integrated institutional framework for innovation. We believe that innovative leadership development programs that can be easily implemented and replicated in other regions are needed to develop transformational leadership competencies.