Role of leadership potential in ensuring effective project management in conditions of structural change

Abstract

The article investigates the role of leadership potential in ensuring effective project management under conditions of structural change, using the regions of Ukraine as an empirical case. The relevance of the study is determined by the growing importance of project-based management in an environment characterised by increased uncertainty, innovation-driven transformations, and deep structural disruptions that intensified after 2022. Under such conditions, managerial competencies, particularly leadership potential, become a critical factor influencing project implementation and organisational performance. Within the study, the leadership potential of innovation-oriented managers is conceptualised as an integral latent construct that combines emotional intelligence, leadership behaviour, and innovation orientation. The empirical basis of the research consists of survey data collected from managers across various industries and regions of Ukraine (N = 210), as well as official statistical data reflecting regional project and investment activity for the period 2018–2024. The methodological framework integrates psychometric analysis, the index method for constructing composite indicators, and fixed-effects panel regression to assess the relationship between leadership potential and project management performance. Project management performance is assessed using an integral index based on official statistical proxies, including capital investment volumes, expenditures on innovation activities, and regional gross value added. The empirical results reveal a statistically significant positive relationship between managers’ leadership potential and project management performance at the micro level. The integral leadership potential indicator demonstrates stronger explanatory power compared to its individual components, supporting the relevance of a comprehensive approach to evaluating managerial human capital. At the same time, the meso-level analysis indicates a substantial weakening of the relationship between leadership potential and project management performance after 2022. This finding suggests that, during periods of profound structural shock, exogenous factors such as security conditions, infrastructure constraints, and institutional changes dominate over managerial characteristics in shaping project outcomes. The scientific novelty of the study lies in combining psychometric measurement of leadership potential with quantitative regional analysis of project management performance while explicitly accounting for structural change. The practical implications of the findings include their potential use in designing management decisions aimed at fostering innovation-oriented leadership and enhancing project effectiveness under unstable and rapidly changing conditions.