Abstract

Practitioners and researchers are increasingly engaged and interested in digital transformation leadership. However, the existing literature is fragmented and we lack knowledge of the competencies required by business leaders to facilitate digital transformation. In response, we rely on a literature study and draw inspiration from the Competing Values Framework to identify digital transformation leadership competencies. We theorize four archetypical competency portfolios, which are labeled according to the types of leaders who personify the constituent competencies: the challenger, the bricoleur, the organizer, and the competitor. We draw inspiration from the Competing Values Framework in advancing a contingency perspective on archetypical these portfolios. By theorizing competency portfolios, we contribute new insights into the role of leadership in digital transformation, which requires different competencies depending on the transformation drivers and goals. Our proposed competency portfolio framework serves as a valuable tool for identifying the required competencies and making decisions on whether to upskill existing leaders or hire new ones to drive transformation efforts.

Introduction

The rising interest in digital transformation spans both academia and organizations (Markus & Rowe, 2023). The number of publications on this topic has tripled over the past decade (Hanelt et al., 2021), and organizations are constantly faced with new digital technologies that have the potential to transform business models and organizational identities (Wessel et al., 2021). The growing importance of these technologies has placed digital transformation at the top of business agendas (Imran et al., 2020, Zulu and Khosrowshahi, 2021) and produced an increased awareness of the need for new competencies among business leaders who are strategizing and spearheading digital transformation (Bennis, 2013, Imran et al., 2020, Klein, 2020, McCarthy et al., 2021, Schiuma et al., 2021). Business leaders are increasingly playing a pivotal role in driving the digital transformation agenda (Preston et al., 2008, Wolff et al., 2019, Adie et al., 2022) not only by strategizing and influencing the behavior of employees (Bunjak et al., 2022, Nguyen and Hooi, 2020) but also by leading by example in the pursuit of change (Imran et al., 2020, Zulu and Khosrowshahi, 2021). In short, digital transformation requires skilled leaders (Skare et al., 2023). By focusing on the role of business leaders, we adopt a view of “leadership as a social influence process” (Banks et al., 2022, p. 1) that emphasizes “the activities of an organized group in its efforts toward goal setting and goal achievement” (Stogdill, 1950, p. 4).

Previous studies of digital transformation leadership emphasize that business leaders must be able to recognize when digital transformation is needed (Bharadwaj et al., 2013, Cortellazzo et al., 2019), foster an environment that supports this transformation (Singh and Hess, 2017, Imran et al., 2020, van Toorn et al., 2019), understand the influence of organizational culture on a company’s ability to participate in digital transformation (Müller et al., 2019), take into account how digital transformation impacts organizational structures and leadership (Engesmo & Panteli, 2021), and empower employees to turn strategic initiatives into new work practices (Andriole, 2018, Sousa and Rocha, 2019, Nielsen et al., 2023). McCarthy et al. (2021) identify eight characteristics of digital transformation leadership and provide an initial mapping between these characteristics and C-suite roles. Klein (2020) expands the number of digital leadership characteristics to 23, and Schiuma et al. (2021) present a model, the transformative leadership compass, outlining six competencies “distinguishing a digital transformative leader capable of driving continuous company innovation and specifically digital transformation entrepreneurship” (p. 1273).

Concluding remarks

In this article, we describe the competencies that business leaders need to facilitate digital transformation. We argue that relevant leadership competencies depend on the drivers and goals of the organization’s digital transformation efforts. Based on a review of the literature, we theorize four distinct sets of competencies that leaders need under varying circumstances, something we refer to as archetypical leadership competency portfolios. These portfolios are gathered into a competency portfolio framework (Fig. 1). We label the portfolios according to the types of leaders who personify the constituent competencies: the challenger, the bricoleur, the organizer, and the competitor. These portfolios relate to the drivers and goals of (a) exploring market innovation, (b) supporting operational efficiency, (c) ensuring active stakeholder involvement, and (d) improving competitive positioning. Although there are other categorizations of digital transformation leadership competencies, for example, Zulu & Khosrowshahi’s (2021) taxonomy of different leadership types that range from forward-thinking to visionless leaders, our theorizing constitutes the first attempt at fencing in the digital transformation leadership competencies from a contingency perspective.