Purpose This study aims to examine how adaptive leadership (AL) influences frugal innovation (FI) through the mediating role of growth mindset (GM). It addresses the need to understand psychological mechanisms that connect leadership behaviors with innovation under resource constraints, particularly in the hospitality industry. Design/methodology/approach A cross-sectional survey was conducted among 224 frontline employees and supervisors in the hospitality sector. Established and validated scales were used to measure AL, GM and multidimensional FI. Data were analyzed using partial least squares structural equation modeling (PLS-SEM) to test direct and mediating relationships. Findings Results reveal that AL significantly enhances GM, which in turn promotes three dimensions of FI: functionality focus, ecosystem creation and cost reduction. GM fully mediates the relationship between AL and FI, underscoring the importance of cognitive mechanisms in leadership-driven innovation. Research limitations/implications The cross-sectional design limits causal inference. Future longitudinal and cross-industry studies are encouraged to validate these relationships across contexts. Practical implications The findings suggest that developing adaptive leaders and fostering GM cultures can enable hospitality organizations to achieve FI and sustain competitiveness under constraints. Originality/value This study integrates leadership, mindset and innovation theories, offering a novel psychological explanation for how organizations innovate efficiently in resource-scarce environments.
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