[Research Contribution] Digital Leadership – An Overview from the Digital Age

25 February, 2025

Keywords: Digital leadership; Digital age; Digital transformation; Digital skills; Digital capabilities.

As information technology develops, businesses undergo digital transformation. This practice has created a new generation of leaders, namely digital leaders. Digital leaders possess the ability to connect people, to promote competitive advantages and innovation in businesses through technology application to maximize operational efficiency. Although the topic of leadership and factors affecting leadership have been widely studied, there is being a research gap on digital leadership. The study by the researcher from the University of Economics Ho Chi Minh City (UEH) was conducted using a systematic review method to capture a comprehensive picture of research related to digital leadership, providing insights into the qualities that a digital leader needs to have.

With the development of information technology, new tools have emerged, leading to the adjustment of business transactions on digital platforms. Many businesses create interactions with customers through websites and increase transactions through the use of technology and intelligent systems (e.g. AI, IoT, Big data, etc.). To apply disruptive technology, a company may need to build and apply a sustainable digital learning culture. Digital leaders are those who prioritize the development of a digital learning culture throughout the company. There are many reasons why digital transformation projects fail. One reason is the lack of digital leaders who have to change their work and interactions with the business (Correani, 2020). Thanks to their digital knowledge and experience, the capabilities of digital leaders can help reduce the probabilities of failure in digital transformation projects. The continuous development of technology in the workplace, making more businesses undergoing digital transformation and posing certain problems in the management and operation of such businesses (Haddud, 2018).

In fact, in previous studies, leadership has been a key factor in driving the success or failure of a business. When it should be applied to the current volatile business environment, where technology and business environment are constantly changing, leadership and digital leadership will be the guiding principle to promote innovation activities towards sustainable development for businesses in the current volatile environment. Therefore, this study focuses on reviewing studies on digital leadership, digital transformation, and innovation that have been carried out in the past 10 years; discussing the concept of digital leadership and exploring the important role of digital leadership in the digital transformation process and their decisions that affect the digital transformation activities of businesses.

Theoretical Frameworks for Digital Leadership

Digital leadership is a study field that draws on various theoretical frameworks to explain how leaders can effectively guide their organizations in the digital age. For example:

(1) Transformational leadership theory, developed by Burns (1978) and expanded upon by Bass (1985), is a foundation for digital leadership. This theory posits that leaders can inspire and motivate their followers to exceed their usual performance by creating a better vision and fostering a culture of innovation;

(2) Adaptive leadership theory, developed by Heifetz and Linsky (2002), emphasizes the importance of leaders being able to navigate complex and rapidly changing environments;

(3) The Digital Leadership framework, described by Westerman et al. (2014), provides a more specific approach suited to the digital age.

These theoretical frameworks provide a foundation for understanding the competencies, behaviors, and strategies required for successful leadership in an environment characterized by rapid technological change and increasing complexity.

Overview of previous studies from 2012 to 2024

Figure 1 shows the trend in the number of publications on the topic of digital leadership from 2012 to present, it can be recognized that, from 2012 to 2023, the number of published articles has increased significantly, the volume of articles in the early years of the previous decade was only fewer than 20 articles per year. However, from 2020 onwards, the number of published articles has increased by more than 200% compared to that of 2018. Even in the past 5 years (2018-2023) the fact that the annual growth rate has exceeded 100% affirms scholars’ interest in the topics of digital leadership. In other words, under the strong shift of digitalization, companies gradually realize the importance of digital leadership, looking at that practice researchers need to consider, to evaluate and to make suggestions for businesses to develop digital leadership.

Figure 1: Statistical graph of the number of research publications on digital leadership by year

In Figure 2, it can be identified that research on digital leadership provides perspectives on innovation in businesses, digital transformation, sustainable development and changes in business operations. Figure 2 also presents that most of the keywords correspond to the search criteria used in the article (Soriano et al., 2018). The most frequent keywords include digital transformation, digital technology, leadership change, organizational change, innovation, resource innovation.

Figure 2: Diagram of the linkages between studies on digital leadership

From the results of the study, it can be stated that from 2020 onwards, researchers are shifting to analyzing the impacts of digital transformation in organizations (Peter et al., 2020). According to Kane et al. (2019b), although the core competencies of leaders remain the same, the unique characteristics of digital leaders like dynamic capabilities, making decisions based on digital data, or the ability to change flexibly are those factors to evaluate digital leaders. Along with the development of digital technology, the requirements for leadership capabilities have also changed (Pulley et al., 2001). Digital leaders need to understand the digital context that will affect the way organizations and businesses operate. Therefore, digital leaders must build strategies and be ready to transform their businesses digitally at any time (Kane et al., 2019b).

Aspects of digital leadership often analyzed include:

*Business

Digital leaders play an important role in guiding businesses towards success in the modern business context. One of the examples of successful digital leadership is Amazon, a pioneer in E-commerce and cloud computing.

*Education

Digital leadership in education plays a vital role in transforming the teaching, learning, and operations of educational institutions. By leveraging digital technology, education leaders can enhance the engagement of faculty and students, improve learning outcomes, and streamline organizational operations. Some of the digital initiatives promoted by digital leaders include new teaching methods and learning experiences like blended learning, personalized learning, and online learning systems (LMS). Digital leaders today are advocating the integration of online and blended learning models to leverage digital resources. This approach allows for flexible learning environments and access to a wider range of educational materials (Garrison & Vaughan, 2013).

* Healthcare

Digital leadership plays a pivotal role in driving innovation in healthcare, where technology can significantly enhance patient care, streamline operations, and improve overall health outcomes. The role of digital leaders in healthcare includes strategic vision, technology adoption, and fostering a culture of innovation. Digital leaders need to have a clear vision for integrating digital technology into healthcare practices. This includes identifying innovation opportunities and setting goals that align with the organization’s mission and patient care goals (Schafer et al., 2019).

Opportunities and Challenges for Digital Leaders

*Opportunities for Digital Leaders

Digital leaders need to leverage new technologies like AI and big data analytics to make decisions relevant to their organizations and businesses. By using predictive analytics, leaders can predict market trends, customer behavior, and potential risks, making more informed and proactive decisions.

With technological advantages and market insights, digital leaders can better capture market opportunities. For example, digital leaders can implement an omnichannel strategy to provide a seamless customer experience across multiple touchpoints. By integrating online and offline channels, leaders ensure a consistent and engaging experience for customers, regardless of how they interact with the brand (Lemon & Verhoef, 2016). This integration enhances customer satisfaction and loyalty.

*Challenges faced by digital leaders

– The digital transformation process: The digital transformation of a business is a complex process that digital leaders have to deal with. The first thing to mention is the organization’s culture which can be a major obstacle to the application of digitalization in the organization. Therefore, businesses need to invest in comprehensive training programs to equip employees with necessary skills and confidence (Ertmer & Ottenbreit-Leftwich, 2010).

– Cybersecurity risk management: As organizations become increasingly dependent on digital technology, managing cybersecurity risks becomes a key challenge for digital leaders. Digital leaders must keep up with the latest technologies. Businesses must continuously monitor and update security measures (Bertino & Sandhu, 2005; Voigt & Von dem Bussche, 2017). To meet this challenge, businesses need to invest resources in activities to improve security capabilities.

Policy Implications for Leaders in the Digital Age

Research on digital leadership is growing rapidly, especially as organizations increasingly embrace digital transformation. The UEH research found that digital leadership plays an important role in promoting digital transformation in businesses to improve competitiveness. Digital leaders need digital skills like making decisions based on digital data analysis, online communication skills, digital vision, inspirational skills, etc. The theories that have been widely researched and used in the past 10 years on digital leadership were transformational leadership theory and digital transformation theory. These theories provide a comprehensive perspective on digital leadership. Through the above theories, skills like vision, adaptability, and digital competence of leaders are presented. From the theories, previous studies also provide a comprehensive perspective on the transition from traditional leadership to digital leadership. This transition includes adjusting leadership style, flexibility, making data-based decisions, and developing digital skills and platforms. The study also found that digital transformation has changed traditional leadership models, requiring them to improve their technological skills and develop customer-centric strategies.

The results of this study help organizations develop strategies to promote the development of digital leaders for their own organizations. First, the fact that organizations need to invest resources in training means prioritizing learning and development for leaders in the organization, nurturing future leaders. This learning and training process focuses on new technologies, digital skills and digital processes, helping leaders not only have strategic vision but also gain technological skills. Based on that, businesses will develop a team of digital leaders who keep up with trends, have the ability to adapt to changes and fluctuations from technology and the market. Afterwards, businesses need to implement policies to encourage and to promote a culture of innovation in the organization to foster a culture where people are willing to try new things, continuously improve and develop new processes, and to encourage leaders to apply new technology, to change old and outdated processes that are no longer adaptable and costly. Enterprises need to have a specific strategy to build and to develop a digital leadership team. This strategy must be consistent with the enterprise’s digital transformation goals.

Authors: Associate Professor Bui Quang Hung, Dr. Do Thi Hai Ninh, Dr. Phan Thi Bao Quyen, Dao Thi Minh Huyen – University of Economics Ho Chi Minh City

This article is part of the series spreading research and applied knowledge from UEH with the message “Research Contribution For All”. UEH cordially invites readers to read the next UEH Research Insights newsletter.

News, photos: The authors, UEH Department of Communications and Partnerships

Audio: Thanh Kieu