From IT-enabled organisational transformation to digital transformation: leadership strategies for value creation in manufacturing

Abstract

Digital Transformation (DT), which encompasses Industry 4.0 and Industry 5.0, has been conceptualised and often paralleled with IT-Enabled Organizational Transformation (ITOT) by academia and practitioners. Despite their shared foundation in organisational transformation, the goals pursued are not the same, demanding different leadership profiles to either reinforce an organisation's existing value proposition and identity in ITOT or redefine its value proposition and establish a new organisational identity in DT. This paper aims to identify leadership strategies supporting value creation within organisations through the ITOT and DT journeys, including leadership competencies and practices related to the organisation's purpose with digital initiatives. This research employed a Fuzzy Delphi method based on a survey of 46 leaders involved in ITOT or DT in manufacturing companies in Brazil. Our findings reveal that leaders consider themselves mostly unprepared to navigate these organisational transformations in the manufacturing sector. The study highlights the need for leaders to create value beyond technological aspects and embrace a human-centric approach to change management that enables strategic organisational transformation. Our main contribution is a framework guiding the alignment between leadership strategies and competencies development to support ITOT and DT according to the organisation's purpose to become more sensing, smart, sustainable or social.