Innovation is key to the long-term success and growth of businesses, including the stone industry, which can remain competitive by applying new technologies, creating innovative products and sustainable practices. Leadership plays a significant role in fostering innovation by creating a stimulating environment, fostering creativity and directing teams towards innovative goals. A transformational leadership style, which encourages the generation and implementation of new ideas, is key to the long-term sustainability and growth of organizations. Research conducted among employees in the stone industry in the Republic of Croatia in June 2024, on a sample of 43 respondents, showed that a transformational leadership style has a positive effect on the motivation, innovation and personal development of employees, while a transactional style could have a limited impact on long-term motivation and engagement. Emotional intelligence of superiors also shows a moderate positive relationship with organizational innovativeness, while team size shows a small but statistically significant relationship with innovation, while company size and leadership styles had no significant relationship. The hypothesis that the transformational leadership style has a strong connection with organizational innovation was accepted, as was the connection between superiors' emotional intelligence and innovation. However, the hypothesis that team and company size affects leadership styles and innovation was partially confirmed. Limitations of the study include the small sample size, the subjectivity of perceptions of leadership styles and emotional intelligence, and the lack of long-term follow-up, which may limit understanding of long-term effects. Also, the correlational nature of the research does not allow firm conclusions about cause-and-effect relationships.