Introduction: Founders of innovation-oriented firms often serve as cultural anchors whose passion can energize organizational performance. Yet little is known about how founder innovation passion—defined as a strong and sustained emotional engagement with technological or product innovation—travels across organizational levels to influence employee innovative behavior.


Purpose: This study explores how founder passion becomes visible, credible, and actionable inside organizations. We ask: (a) how founders express passion through observable signals, (b) how these signals are interpreted and transmitted across organizational levels, and (c) under what conditions they activate employee innovation.


Method: We conducted a qualitative case study (2018-2025) of a high-growth technology firm in China. Data included 20 in-depth interviews with the founder, senior managers, and product engineers, complemented by field notes, internal documents, and public materials. Using Gioia procedures, we inductively developed a grounded process model.


Results: We identified three types of passion signals: identity signals (e.g., self-narratives, founding stories), action signals (e.g., visible effort, personal involvement), and vision signals (e.g., aspirational goals, cultural framing). Their interpretation varied across organizational levels and was often mediated by middle managers. We further found that employee innovation depended not only on proactive motivation ("can do," "reason to," "energized to") but also on perceived permission to innovate. While recent work introduces proactive permission as an individual judgment, our findings extend this construct by showing how permission is socially constructed through founder signals, managerial translation, and contextual norms.


Conclusions: Innovation passion does not diffuse automatically but requires deliberate signaling and organizational embedding. By integrating signaling theory with emerging research on proactivity, this study advances understanding of how founder passion is transmitted across levels and contributes to developing the proactive permission construct. It offers a multilevel account of how founder passion activates innovation in founder-led enterprises.