From AI Leadership to Innovation Efficiency: The Sequential Roles of Digital Capability Development and Human Capital Transformation

Abstract

Artificial intelligence is increasingly transforming organizational decision-making, yet the mechanisms through which AI Leadership contributes to innovation outcomes remain insufficiently understood. Drawing on dynamic capabilities theory, this study examines the relationships among AI Leadership, Digital Capability Development, Human Capital Transformation, and Innovation Efficiency. Data were collected through a cross-sectional online survey administered via the Prolific academic research platform with an international sample of 3416 employees. Exploratory factor analysis, confirmatory factor analysis, and structural equation modeling were then employed using a split-sample validation approach. The results indicate that AI Leadership positively influences Digital Capability Development, while Digital Capability Development positively affects both Human Capital Transformation and Innovation Efficiency. Contrary to expectations, AI Leadership demonstrates a significant negative direct effect on Human Capital Transformation. Mediation analysis reveals that Human Capital Transformation partially mediates the relationship between Digital Capability Development and Innovation Efficiency, whereas Digital Capability Development and Human Capital Transformation jointly provide a significant sequential mediation pathway linking AI Leadership and Innovation Efficiency. The findings suggest that innovation efficiency does not emerge directly from AI Leadership but through a multistage transformation process involving capability development and workforce adaptation. The study contributes to digital transformation and innovation research by demonstrating that innovation efficiency emerges through a sequential organizational transformation process rather than directly from AI Leadership.