Muhammad Zaenuddin, Tibrani
This study examines policy innovation performance in relation to transformational leadership and flexible collaborative governance in Batam, Indonesia, a context marked by multi-authority governance, investment-oriented development and institutional complexity. Responding to recent debates on open innovation dynamics, the study argues that public-sector innovation in such settings cannot be attributed exclusively to formal authority; rather, it is shaped by the capacity to mobilize external knowledge, empower local entities and reconfigure cross-agency collaboration under accountability constraints. A quantitative approach was used, involving 294 respondents selected from the legislature, Batam Government, BP Batam, business stakeholders, traditional leaders and community organizations across six districts. Data were gathered using structured Likert-scale surveys and analyzed using partial least squares structural equation modelling (PLS-SEM). The results indicate that local entity empowerment is positively associated with transformational leadership, which is in turn positively associated with collaborative governance flexibility and policy innovation performance. Collaborative governance flexibility is also positively associated with policy innovation performance. By contrast, authority is not significantly associated with transformational leadership, and only the indirect effects related to local entity empowerment are significant. Rather than proposing a wholly new theory or construct, the study refines existing governance and innovation perspectives by clarifying how empowerment, leadership and collaborative flexibility interact to shape policy innovation performance in a complex multi-authority setting. The findings highlight the need to move from authority-centered governance toward adaptive collaborative capacity as a basis for public-sector innovation and public value creation.