Towards SMEs’ digital transformation: The role of agile leadership and strategic flexibility

Digital transformation in SMEs has become a necessity in the Industrial Revolution 4.0 era. The ASEAN Economic Community will be more established if SMEs are able to take the benefit of information technology advancement in its business process. This research aims to test the role of agile leadership and strategic flexibility to improve digital transformation in SMEs among ASEAN countries. The data from this research were from 539 SMEs in Indonesia and Malaysia as representatives of ASEAN community and tested using Smart PLS 3. A total of 519 usable surveys were collected. Data testing results showed that agile leadership becomes the key to success in implementing digital transformation. Moreover the strategic flexibility, which comes from workforce transformation and dynamic capability, is also the determining factor in the creation of digital transformation in SMEs. The fast response of the leader followed by strategy flexibility, play a significant role to the success of digital transformation implementation.