Igniting executives through reflective development with the composite leadership innovation and change model: a UK automotive manufacturing longitudinal study

The composite leadership innovation and change (CLIC) is a new leadership model developed by an institute in a university business school in the UK from a combination of two theories viewed from the perspective of innovative leadership. These theories include the leader–member exchange (LMX) theory proposed by Dansereau et al. (1975) and the social exchange theory (SET) developed by Homans (1958) and the applied innovative leadership perspective as explained by Zhu et al. (2024). These theories and the perspective are elaborated in the second section of this paper. It suffices to note that it is their combined rationale that underlies the development of the CLIC model.

As its name suggests, CLIC was developed as a model for nurturing innovative executive leadership teams that have the ability to introduce innovations or encourage the adoption of ideas suggested by subordinates and executives to optimise staff productivity and, subsequently, enterprise performance and competitiveness, which can be digitally monitored. CLIC is hence a leadership model whose application can enable enterprises to optimise their performance by nurturing innovative executive leadership teams. Through this approach, the CLIC model enables organisations with siloed leadership cultures to adopt a digitally monitored performance system, fostering innovative and collaborative executive leadership (Mintzberg, 2024). The CLIC model has, however, not been validated, and this is the research gap that this paper seeks to fill based on enterprises, which have long struggled to realise innovative executive leadership teams. Research has shown that enterprises where an innovative executive leadership team has eluded them include many small and medium-sized enterprises (SMEs), especially those in the automotive manufacturing industry (OECD, 2024; White, 2021).

An innovative executive leadership team is conceived of as a company’s CEO and department heads exercising leadership by engaging in cooperative decision-making based on free exchange of ideas to encourage creativity and innovation that optimises employee productivity and subsequent corporate performance, efficiency, effectiveness and competitiveness (Simkhada and Bhattarai, 2023; Martinez-Leon et al., 2020). The way a leadership team achieves these ends is explained by Zhu et al. (2024, p. 1), who describe innovative leadership as the influence exercised through five dimensions, which include “thinking creatively, holding the willpower to be innovative, tolerating different opinions and various risks, establishing mechanisms for innovation, and implementing innovation ideas,” a description also supported by Mogaji and Dimingu (2024).

By encouraging creativity, executive leadership teams play a critical role in cultivating innovation, which all firms, including SMEs, need to optimise their management and staff productivity and corporate performance and competitiveness (Hsu et al., 2022; Sun et al., 2023). Igniting and encouraging executive team leadership to foster innovation in business has hence been at the centre of organisational research for several decades (Karauri and Kyongo, 2024; Ngoc Khuong et al., 2022; Ferine et al., 2021; Mbaya, 2017; Hiller and Beauchesne, 2014). Some of this research has been conducted on automotive manufacturing firms (Payton, 2022; Proby, 2021; White, 2021; King-Daniel, 2020), particularly ASMEs (Hutajulu, 2023; Khuong et al., 2022). This research has generally been motivated by the quest for an answer to the question of why automotive manufacturing firms do not achieve their planned performance targets despite the hi-tech technology they use to perform much of their work. The answers provided so far include gaps in these firms’ input supply chains, the stiffening global competition facing these enterprises, their tendency to lag behind the rapidly changing customer demands, and most importantly for this paper, siloed leadership associated with these companies (Mishra et al., 2023; Ericsson et al., 2022).

Siloed leadership derives its name from the concept of silo borrowed from agriculture, where it means a tall tower or pit on a farm used to store grain (Bento et al., 2020). Siloed leadership refers to a form of leadership exercised in departmentalised organisations, with each department having its own leader leading individually using its own leadership style (Mintzberg, 2024). Siloed leadership is individualised, implying that department heads work independently and in isolation from each other (Mintzberg, 2024). Therefore, there is a lack of cooperation, collaboration and collective innovation among leaders; yet, all enterprises need all these leadership characteristics to optimise their productivity, performance and competitiveness (Jeske and Olson, 2024). Since ASMEs are characterised by siloed leadership, their persistent underperformance may be mitigated by dismantling this leadership structure. Purging this individualised leadership culture is crucial for ASMEs to enhance their performance and more effectively fulfil their role, which they have maintained since the early 20th century. This role involves catalysing national economic growth through high-tech designing, development, modification, manufacturing, marketing, distribution, selling and repair of motor vehicles and/or their parts (Abdul-Azeez et al., 2024; OECD, 2024).

Elimination of siloed leadership is particularly needed in the UK’s ASMEs given the role they play in this country’s economic growth. The statistics provided by Eaton (2024) indicate that the UK has 5.51 m small-scale businesses (firms with 0–49 workers), which employ 99.2% of the UK’s total population. The same source indicates that the UK has 36,905 medium-sized enterprises (companies with 50–249 staff size), which employ 0.7% of the same population. Large-scale firms and the UK government employ the remaining proportion of only 0.1%. Of the UK SMEs, over 3,000 are ASMEs employing over 180,000 workers, which represents one in every six employees working in the UK manufacturing sector (SMMT, 2024). These statistics demonstrate that ASMEs are indeed key employers of the UK’s population. These enterprises contribute significantly to job creation, per capita income enhancement, quality of life improvement and national socioeconomic development in the UK (SMMT, 2024).

However, like their counterparts in other countries, the UK’s ASMEs perform below their planned targets (SMMT, 2024). This underperformance is demonstrated by the available statistics, which include ASMEs that do not perform as planned are 50% in Germany and 47% in the UK, among other developed nations (Automotive World, 2024; Clark, 2024; Coface, 2024). Since the siloed leadership characterising ASMEs has been identified among the explanatory causes of the underperformance, different leadership theories and models have been used to change this leadership in these enterprises. These include the charismatic, behavioural, situational, contingency and transformational leadership theories (Brodowicz, 2024; Vasileva and Datta, 2021). However, the challenge of siloed leadership is still persistent in these enterprises (Mintzberg, 2024), pointing to a need for more feasible leadership solutions. The aim of this article is to validate whether the CLIC model can offer such a solution by breaking siloed leadership by igniting executive team leaders through reflective development using one of the ASMEs in the UK. The next section presents a review of the theories that guided this validation.

This paper is underpinned by two theories, which include the SET and the LMX theories. The SET takes a psychosocial transactional perspective to posit that individuals desire a relationship from which gained benefits either equal or outweigh the costs required to sustain it, and disassociate themselves from a relationship considered more costly, parasitic, or exploitative than valuable or where the costs incurred exceed the benefits received (Ahmad et al., 2023; Ohemeng et al., 2020). The benefits include positives gained from a relationship, which may be authentic reciprocal respect, trust, friendliness, support, recognition, appreciation and other rewarding resources that make a relationship high-quality (Do et al., 2024; Chen and Sriphon, 2022). The costs are the negatives, such as time, effort, psychological energy wasted and negative emotions or feelings experienced in a relationship (Bouchrika, 2025). In other words, people follow the adage that “if you scratch my back, I will scratch yours” to decide whether to continue a relationship or not based on the perceived balance between what they put in and what they receive in return; they maintain relationships only when the returns are equal or exceed what they put in (Ahmad et al., 2023). This reflects the complexity involved in handling power ethically and regulating emotions holistically, thereby building trust, promoting the common good and facilitating positive relationships (Knights et al., 2023).

Applied to leadership in business organisations, the SET suggests that executive leaders are effective only when they cultivate high-quality relationships typified by a clear sense of reciprocal exchange of benefits that balance or exceed the costs incurred by the leaders themselves, their peers and subordinate staff. This observation appears in different studies, including Xuecheng et al. (2022), Andersen et al. (2020) and Wang et al. (2020). As highlighted in these studies, SET benefits include executive leaders respectfully listening and responding to ideas from peers and subordinates to enhance productivity and corporate competitiveness. The benefits also encompass fostering mutual trust and support between leaders and staff, enabling optimal task performance, with leaders recognising and appreciating subordinates and peers for work well done and them reciprocating with loyalty, commitment and engagement (Lee et al., 2019). Realising these benefits is fundamental to innovative leadership, fostering creativity and adaptable styles that enhance productivity according to the context (Goleman et al., 2002). Therefore, these benefits, as advocated by the SET, not only provided criteria for developing the CLIC model but also monitored indicators for practical validation of the same.

Despite identifying key criteria for CLIC development, SET has been criticised in the literature for being overly general, focusing on how leaders and subordinates perceive their relationship in terms of reciprocal benefits and costs (Bouchrika, 2025; Ahmad et al., 2023). For this reason, the SET was complemented, for the purpose of this paper, with the LMX theory since prior research has shown that the latter’s focus is overly on leaders (see, for instance, Sobral and Furtado, 2024; Willie, 2024; Kawaguchi et al., 2021; Aggarwal et al., 2020). Drawing on the LMX, therefore, provides a more specific way of observing how leaders relate with their subordinate staff and how the forged relationship influences their innovative ability.

The LMX theory, also known as the vertical dyad linkage approach, explains the quality of the dyadic relationship a leader cultivates with subordinates (Sobral and Furtado, 2024). This theory posits that leaders establish a close and high-quality relationship through free and largely informal and friendly interaction with their subordinates, confiding in them, cultivating mutual trust, sharing information with them transparently and clarifying assigned tasks (Aggarwal et al., 2020; Willie, 2024). Leaders also cultivate a high-quality dyadic relationship with subordinates by encouraging them to suggest innovative ideas, listening and responding to their personal and work-related needs and creating conditions for greater job satisfaction, commitment and engagement and being sufficiently supportive (Diebig et al., 2024). Leaders further cultivate high-quality relationships by being conscientious and using internal loci of control, encouraging extraversion, openness and positivity (Odiaka et al., 2022; Kawaguchi et al., 2021). The LMX recognises that subordinates with whom a high-quality relationship is established are those a leader considers to be in his or her in-group (Zare and Stauffer, 2024; Buengeler et al., 2021). In contrast, leaders form a low-quality relationship with subordinates they consider to be in the out-group by being cold with them, keeping them at a distance, not sharing information, keeping secrets from them, giving them limited or no supervisory support and maintaining a highly formal relationship characterised by a high sense of disagreeableness, incompetence and negative affectivity; a lens on dysfunctional socio-technical traits affecting productive relationships (Sobral and Furtado, 2024; Ji et al., 2023; Omilion-Hodges and Ptacek, 2021).

Generally, the indicators provided by the LMX theory, particularly those that encourage high-quality relationships, were integrated with the SET indicators to develop the CLIC model. These indicators were used based on the view that they are the attributes that inspire innovative leadership. Indeed, as defined by Zhu et al. (2024), innovative leadership is demonstrated through creative thinking, willpower for innovativeness, tolerance for different opinions or diverse ideas and associated risks and establishing mechanisms for promoting innovations and for implementing them. The CLIC model was developed as explained below.

Following the combined rationale of the SET and LMX within the lens of innovative leadership, the CLIC model was developed, as summarised in Figure 1.

As can be seen in Figure 1, the CLIC model recognises that leadership is exercised within the socio-techno-cultural environment that characterises any company. In a high-tech automotive company, a socio-technical culture refers to the collaborative alignment of an innovative leadership team (human), technological systems (digital monitored SET and LMX attributes) and a KPI-driven environment (indicators of change), where leaders influence employee productivity by encouraging cooperation and innovation while leveraging SET and LMX technologies to enhance performance and achieve productivity (Abbas and Michael, 2023). Some companies have a siloed leadership culture, where department heads apply their own leadership styles, making decisions and overseeing tasks independently (Mintzberg, 2024). Since this leadership does not optimise employee productivity, company performance and competitiveness, it is necessary to break it by cultivating an innovative leadership team to replace it (Jeske and Olson, 2024; Pacis et al., 2020; de Waal et al., 2019). Thus, the purpose of this paper was to validate the CLIC model by applying it to break siloed leadership by cultivating an innovative leadership team in one of the automotive companies in the UK. This model was applied using the methods explained next.

Validation of the CLIC model employed a longitudinal observational research design involving participant observation (Thomas, 2023; Cockcroft et al., 2019). This research design was applied to identify weaknesses in the leadership exercised by the CEO and six department heads, exposing these leaders to actions recommended by the CLIC model as a basis for igniting their reflective development for an innovative leadership team, assessing changes and repeating the same process after a month. To do this, a two-year period was used to observe ongoing activities at ASMEs in the UK, helping to better understand the level of interaction between the enterprise’s six department leaders and their CEO and subordinate staff, and among them as supervisory leaders. Prior to the observation, a baseline questionnaire was used to assess their perceptions of performance, based on the scales of Cropanzano and Mitchell (2005) and Zhu et al. (2024). Therefore, the scale ranged from (one) strongly disagree to (four) strongly agree, assessing positive, negative or steady performance. This maintained the validation of CLIC and purposefully influenced the reliability of responses, based on the assumption that all leaders were willing to improve (de Rezende and de Medeiros, 2022). Within socio-interactions, leadership skills were moderated using formal key performance indicators (KPIs). The KPIs targeted a tolerated disengagement of less than one point, more than three points for an innovative attitude towards ideas, more than three points for inspirational creativity, more than three points for colleague tolerance (empathy), more than two points for rewarding and recognition (caring), a reduction in operational risk tolerance by one point (openness) and personal extra initiative indicators of more than three points.

Subsequently, observation followed in terms of holding department meetings, how leaders supervised subordinates’ assignment and task execution, how guidance was given, how encouraging suggestions to improve work and boost individual and team productivity was carried out, how accepting and responding to subordinates’ ideas was done and how support and encouragement for both peers and subordinates was initiated. During the observation, seemingly innocent yet intentional LMX questions as shown in Figure 2 were asked to department heads to understand their supervision quality with their subordinates, enabling the model to establish a baseline performance for individual leadership innovation. Conclusively, ethical approval was granted by the university’s business school research ethics subcommittee. Organisational consent, participant agreement and data anonymity were ensured throughout the project.

The case-study analysis revealed weaknesses in leadership demonstrated by department heads in supervising subordinates. The CLIC model aimed to understand why automotive heads struggle to meet targets, highlighting issues such as transactional supervision, task allocation and limited staff interaction for improvement. Furthermore, the minimal exchange of employee suggestions and ideas, due to pace-setting supervision, diminished subordinates’ willingness to contribute, a lens of dysfunctional social impact on positive interaction (Goleman et al., 2002). Other reasons for not attaining targets included subordinates being dissatisfied with leaders who were overly task-oriented, resulting in minimal attention to their psychosocial needs. Subordinates stated that interaction with heads occurred only during task-focused meetings to allocate assignments, targets and working-scheduling. The automated work environment limited engagement with psychosocial needs seen as dysfunctional social attributes due to prioritising operational over personal needs. This suggests that automotive companies often fail to meet their targets because they focus too heavily on high-tech automation, neglecting the balance of social incentives that foster positive relationships and interdepartmental collaboration, which are crucial for overall efficiency.

Reflective leadership exercises, recommended by the CLIC model, were administered to department leaders to assess whether they would address identified weaknesses. The exercises considered time, focus areas, key actions, activities and outcomes derived from the CLIC model, based on SET and LMX theory, as shown in Table 1. The executives did not implement both sets of actions at once. They took the first set in the first year, divided into two sessions for four months. In each session, they chose three actions to reflect on, facilitating the CLIC model implementation. Changes in leadership were assessed at the end of each session through face-to-face interviews, off-site workshops, back-to-basics leadership meetings, cross-functional meetings and feedback from subordinates. This process was repeated in the second year to assess any shift from siloed leadership to an innovative executive leadership team, with feedback linked to CLIC digital results.

The main objective of the study was to validate the CLIC model using the CEO and his six departmental executive leaders in one ASMEs in the UK. The findings indicate that applying the CLIC model makes it possible for executive leaders to reflectively shift from a siloed or individualised leadership culture to leadership exercised innovatively not only through cooperating, supporting and collaborating but also by cultivating a high-quality relationship with subordinate staff to enhance their performance and subsequent corporate competitiveness. The findings validate the CLIC model, showing that combining SET and LMX theories through innovative leadership can dismantle siloed leadership. This is key in the automotive industry, where siloed leadership often prevents heads from meeting targets by hindering collaboration to work as executive leadership teams. This is evidenced in Tables 2 and 3 showing positive, negative and steady changes.

The findings show that implementing the CLIC model encouraged executive leaders to organise interdepartmental meetings, share ideas, information and resources and collaborate to achieve their departmental targets and company objectives more efficiently and competitively. Sharing results openly was stimulated. Innovating a common leadership social-tech relationship model, executives were monitored and encouraged to adjust actions in real-time to meet business targets using informed mechanisms. The findings confirm the usefulness of the model and align with the innovative leadership perspective as explained by McCauley-Smith et al. (2013), Mogaji and Dimingu (2024) and Zhu et al. (2024).

In addition, the findings revealed that the application of the CLIC “rewarding and recognition” performance attribute enabled both leaders and subordinates to become more aware of appreciation socio-technics that enabled both parties to fully cultivate a positive relationship to achieve respective departmental targets and subsequent company objectives in a more efficient and competitive manner. Tables 2 and 3 show that most leaders and CEOs improved for the rewarding indicator, except for one who declined and another who made steady progress, though all still had room for improvement. These findings suggest that all leaders recognised their contribution to the innovative leadership team and sought improvement through the essential CLIC model activities in Table 1 and continuous development in Figure 3, which supported the purpose of the CLIC model explained from the lens of the SET as explained by Xuecheng et al. (2022), Andersen et al. (2020) and Wang et al. (2020).

Furthermore, CLIC improvements for the majority of the leaders involved colleague tolerance, willpower of thinking, operational-risk tolerance and innovative-attitude towards ideas. KPIs made it possible for the executive leaders to shift from task-based instruction of their peers to collaborative-respect and fairness in terms of task distribution, minimising dysfunctional social-technics as imposing or intolerance, instead facilitating improved work balance between the effort the subordinates invested in their jobs and the rewards they received in terms of respect and fair treatment, thereby confirming the CLIC model from the lens of the SET as Do et al. (2024) and Chen and Sriphon (2022) describe it. The use of this model also enabled the executives to change from making decisions leaning towards transactional ways to a manner that involved exchanging and sharing work-related ideas with subordinates and staff, listening to grievances and teaming up more often by helping one another complete assigned tasks.

Negative changes also occurred, with reduced innovative inspiration and ideal personal traits. This was due to how they felt about handling things differently, changing their routines to establish common ground, tolerating both peers and subordinates whilst regulating emotions to genuinely contribute to the innovative leadership team and underpinning the ideas of Knights et al. (2023). Additionally, emphasising the need to embrace ideas beyond one department, allowing leaders to adjust actions that negatively impact departmental targets using the CLIC model’s positive attributes. Adopting the CLIC model enabled continuous improvements by providing an official guide to both new and experienced executives at ASMEs through onboarding, tenure and maturity, as shown in Figure 3. Thus, increasing high problem-solving of recurrent issues and departmental targets.

Besides the KPI-driven narrative, subordinates’ reports were obtained to supplement how they felt in their relationship with leaders, with results indicating a feeling of being better treated, more respected and appreciated when exceeding expectations, thus minimising dysfunctional socio-technics within leaders’ exchange relationships that made subordinates feel their ideas were valued, with workable suggestions turned into innovations that improved productivity, and those who suggested them were rewarded. Subordinates revealed this change in leadership by explaining that,

Recounting this is what is said,

More proceedings quotations from an assessment interview with heads (H) at the ASME, where the validation was conducted, illustrate how the CLIC model neutralised the transactional nature of individualised leadership culture, as observed by Lee et al. (2024) and Pizzolitto et al. (2023), transforming it into participatory innovative leadership, as explained by Alarifi and Adam (2023). Other leaders highlighted how their peers shifted from focusing solely on task completion to encouraging innovation, stating that

As reflected in the earlier interview data, departmental heads noted changes after the CLIC model was implemented; this encouraged leaders to shift from directive, individualised leadership to an innovative approach that empowered subordinates to contribute to ideas that improved task performance. Involving peers in idea generation alludes to encouraging their participation in decision-making. This suggests that the CLIC model encourages leaders to consider their subordinate staff as what Zare and Stauffer (2024) and Buengeler et al. (2021) referred to as members of the in-group based on the LMX theory.

The findings further revealed that automotive heads struggle to resolve recurrent issues and meet targets due to a lack of trust in their subordinates. During CLIC, however, through encouraged listening and acting on both subordinate and peer minor and major concerns allowed increased sharing of ideas on how to optimise recurrent errors. One leader noted that, following CLIC integration, departmental costs rose from £45,000 to £150,000 due to a reduction in recurring issues, previously a shared challenge, demonstrating that increased interaction enabled collective problem-solving through the model. Other leaders also benefited from mutual trust with their subordinates, which improved employee loyalty. They further began giving subordinates the necessary supervisory support at work as one narrated:

Therefore, findings validate the CLIC model by suggesting that after its implementation, department heads began making reflective efforts to cultivate a high-quality relationship between them and their subordinate staff as a basis for performance improvement and an indicator of innovative leadership, as Mogaji and Dimingu (2024), Supriatna and Zulganef (2023) and Huang et al. (2022) observed.

Theoretically, findings confirm that testing the CLIC model in a UK ASMEs over two years shifted the executive leadership from an individualistic culture to a cooperative and collaborative approach, guided by SET and LMX theories (Mogaji and Dimingu, 2024; Diebig et al., 2024). By applying these theories to practice, the model addressed recurring social challenges that often hinder automotive executives from meeting targets when working individually in a siloed manner. Consequently, automative department heads engaged in more frequent interdepartmental collaboration, fostering supportive exchange relationships through structured meetings. These meetings, switched with the digital CLIC KPI-driven system, established a unified practice within the high-tech environment, ensuring alignment with organisational goals. The CLIC model advocates evidence-based leadership innovation, demonstrating how theory-driven strategies enhance task communication, integrate employee feedback and improve collective executive departmental performance. By embedding socio-technical leadership principles, the CLIC model strengthens collaboration and productivity, directly contributing to target achievement. Future research should validate its applicability in other cultural contexts other than the UK and assess its relevance in micro-organisations. Additionally, exploring the role of emotional intelligence in fostering innovation among diverse team members warrants further investigation. Moreover, dysfunctional socio-technical attributes and leadership readiness to adopt CLIC can be explored in depth.

We gratefully thank the SME where the project was conducted to validate the new CLIC model and the reviewers for their insightful guidance.