This study examines how visionary leadership influences the organisational performance of SMEs in the United Arab Emirates, with particular attention to the mediating roles of organisational alignment and organisational innovation. A quantitative research design was employed, and data were obtained from 313 manufacturing SMEs. The relationships among the study variables, including both direct and indirect effects, were assessed using PLS-SEM. The findings reveal that visionary leadership exerts a significant direct influence on organisational performance and also contributes indirectly through organisational alignment. Although visionary leadership and strategic vision demonstrate positive associations with organisational performance, the linkage is fully mediated by organisational innovation. The evidence further suggests that while transformational leaders are effective in fostering internal coherence and strategic direction, superior organisational outcomes are achieved primarily through innovation rather than leadership vision alone. The study underscores the importance of developing innovation-driven capabilities within SMEs to fully realise the performance benefits associated with visionary leadership. It also advances leadership–performance frameworks by explaining how leadership vision operates through internal organisational mechanisms within developing-country contexts. In practical terms, the findings offer valuable guidance for entrepreneurs and policymakers seeking to strengthen the competitiveness, resilience, and long-term sustainability of SMEs in the rapidly evolving business environment of the UAE.