Leadership

Leadership is the most important element influencing the DT of incumbents. Leadership plays crucial roles as an antecedent and a mechanism along the digital journey of firms; as many scholars argued. In the context of DT, leadership that possesses experience and digital know-how is the key success factor to differentiate the firm's  performance. Therefore, leadership plays as an anchor for digital journey of incumbent firms.

Leadership theory's origin

Burns (1978) introduced the transformational leadership theory and defined it as a process where leaders and followers engage in a mutual process of raising one another to higher levels of morality and motivation. To extend this theory, Bass (1985) defined transformational leadership (TFL) as leader behaviors that transform and inspire followers to perform beyond expectations while transcending self-interest for the good of the organization. Bass & Avolio (1990) extended the TFL theory by introducing transactional leadership (TAL) which is defined as the leader’s behaviors to get things done by making, and fulfilling, promises of recognition, pay increases, and advancement for employees who perform well. TAL comprises of three characters: “contingent rewards, active management-by-exception, and passive management-by-exception”. Eventually, Bass (1996) initially proposed the full range leadership theory by adding laissez-faire leadership. This style of leadership avoids the intervention or acceptance to the responsibility of follower’s action - to prior studies of Bass (1985) and  Bass (1990) and Bass & Avolio (1990). As consequence, it became the foundation of leadership research in the following decades by many scholars.

In another stream, charismatic leadership theory was introduced by Conger (1985). Another scholar Greenleaf (1977)  introduced  servant leadership : servant leaders seek to transform their followers to grow healthier, wiser, freer, more autonomous, and more likely themselves to become servants. 

The development of Leadership styles: 

Based on the prior foundation of leadership research, numerous leadership styles have been proposed by scholars, especially in the turbulent environment of technological changes, i.e., digitalization, and digital transformation. Avolio et al. (2009) examined an integrative view of leadership theories which are derived after the TFL and TAL theories. They reviewed several leadership stlyes:

Similarly, other sholars reviewed the new leadership theories which propose to capture the missing parts of TFL and TAL framework. They examined: 

The authors affirm that there are several overlaps between newly proposed leadership styles and TFL, TAL. It is aligned with previous studies. Bass (1997) stated that some TFL’s characteristics couple with some TAL’s characteristics to become a new leadership styles (e.g., the boundaries between contingent reward and individualized consideration may be blur although these two characters is to focus on the fulfilment of the follower’s needs; Individualized consideration focuses on individual growth and recognition, whereas Contingent reward focuses more on material rewards).

In another study, scholars proposed “fuller” full range leadership or Instrumental Leadership by adding six characteristics: Environmental monitoring, Strategy formulation, Path-goal facilitation, Outcome monitoring, Consideration, and Initiating structure to Bass (1996) full range leadership theory. Additionally, Van Knippenberg & Sitkin (2013) proposed the conceptual charismatic-transformational leadership to fill in the gaps of TFL (Bass, 1985) and charismatic leadership (Conger & Kanungo, 1987).

In the context of rapid change of technologies (e.g., digitalization), Luciano et al. (2020) proposed a new leadership theory called Strategic leadership systems. It is a novel characteristic of the connection between the Top Management Team (TMT) and the Board that the TMT and Board work together as a strategic-oriented multiteam system with the shared objective of achieving superior company performance. Their workflow should be orchestrated to emphasize the need of both working independently and interdependently. The authors propose that the strategic leadership system's unique group tasks, including board-specific tasks (e.g., monitoring, advising) and TMT-specific tasks (e.g., strategy formulation, managing daily operations), as well as shared tasks, must be fulfilled in trying to attain the overarching aim of improved performance of firms (e.g., strategic visioning, aligning goals, processing information).

Leadership in DT context

To be successful transformation, firms need to ensure top management championship, and participation to establish digital competences and mindsets, to guide and to steer the process of organizational transformation. Leadership enables the engagement of relevant stakeholders for formulating and executing digital strategy  and to ensure strategic fits and availability between internal resources and capabilities and external environment. Leadership of top management also influence on the changes of organizational structure and culture to create the organizational culture of collaboration and innovation 

It was reported that the lack of digital experience and know-how of leadership teams are significant barrier to business transformation because they are not able to realize the capabilities of technological changes for their organization. It leads the incumbents to underinvest in digital transformation for long term payoff rather than preferring to invest in short-term initiatives due to executive’s incentives, stock market pressure, individual and organizational learning biases. 

Leadership plays a crucial role as an antecedent and a mechanism along the digital journey of firms and it is argued by many scholars. Leadership who possesses experience and know-how of digital technologies is the key success factor to differentiate the firm performance.