Digital Leadership and Business Model Innovation: A Case Study of Digital Transformation of the Textile Industry

Abstract

In this digital era, firms are pioneering new technologies to transform their operations for digital transformation as this disruptive technological change is affecting every organization's processes. Therefore, this transformation is gaining scholarly attention across the globe. The emerging wave of digital transformation has begun the scholarship discussion on leadership. Leadership requires an interdisciplinary theoretical lens. The digital transformational process does not primarily involve technologies. Rather, it is about aligning technologies, leadership styles, business models, and culture with emerging market digital trends. However, scholarship on digital leadership and transformational processes is still emerging, and rigorous research is lacking to grasp this transformation. This research aims to explore digital leadership competencies and their role in innovating business models and the culture of organizations in the context of digital transformation. The conceptual foundations of this research are built on the 4I theoretical framework to extend the understanding of the topic. To achieve the aims of this research, a qualitative case study research approach was adopted. For data collection semi-structured interviews, using a semi-structured interview guide, with thirty respondents from the sixteen Pakistani textile companies were conducted. Data analysis was done using a thematic analysis approach. The findings of RQ1 suggest that digital transformation has initiated changes in textile firms' existing business models. These firms are adapting and transforming their existing business models by concentrating on disintermediation, value chain restructuring, and global value chains. More specifically, firms now focus on long-term direct relationships with their international partners and eliminate geographical barriers through digital tools and technologies. It was found that leaders bridge the gap between traditional and new business models through their innovative capabilities, thus making this digital transformation easy, flexible, and adaptive for their firm. The findings of RQ1a revealed that firms could execute business models effectively for value creation and success through streamlined business operations, smart, innovative products, value capture and propositions, and transformative leadership. The findings suggest that digital transformation and leadership have contributed to changing textile firms' existing business models. Digital supply chain, digital ecosystem partnership, digital human resource management, and strategic initiative’s role are highlighted as the critical factors that play their role in effectively executing innovation of business models to generate value and drive success in digital transformation initiatives. The findings of RQ2 demonstrate that digital leadership is a multifaceted phenomenon requiring a nuanced understanding of leadership styles, viz innovative, agile, digital, and collaborative. Through orchestrating these elements’ leaders can navigate the complexities of digital transformation and propel textile firms toward sustainable success. Digital transformation has transformed organizations' operations, demanding leaders adopt proactive approaches to remain competitive. Pioneering digital leadership provides a dynamic blend of various leadership characteristics such as innovative leadership, digital leadership, agility, and collaboration. The findings of RQ2a depicted digital leadership acts as a catalyst for human resource development in the digital era. Moreover, digital leaders create an environment and culture of learning that encourages employees to explore new ideas and innovative approaches. The findings of RQ2b revealed that digital leaders act as change agents. They influence culture through leadership skills and empower teams to opt for such changes through improved communication, the culture of innovation, empowerment of teams to drive innovation, and the leader-follower dyad. The extant research on digital transformational initiatives and leadership competencies required in this digital era is nascent and emerging. To address this void, this research has built conceptual foundations on the 4I framework to extend the understanding of the topic. First, based on its findings, this research has offered propositions and an overarching multilevel framework. The multilevel framework of this research depicts the competencies of digital leadership at each level and the digital leadership role in four phases - intuition, interpretation, integration, and institutionalization for successfully implementing digital transformation. Second, this research has reformed the digital leadership scholarship with a process approach at multiple levels through empirical research. This research offers several theoretical and practical implications and societal contributions. Regarding theory, this research explores the skills of digital leadership, thereby highlighting the digital leaders’ role in innovating the business models and culture of organizations. By offering empirical evidence on these variables, this research offers a pivotal contribution to the literature. This research findings’ have implications for practice and for managers. Firstly, the study findings have highlighted the key skills of digital leaders (ship) imperative to digital transformation success. Secondly, the findings have highlighted that the combination of certain leadership skills contributes to the innovation of business models and the culture of organizations, thus contributing to the overall success of firms' digital transformation initiatives.