Rapid changes in consumer behavior, technological development, and market competition are putting increasing pressure on SMEs to transform. Digital platforms, social media marketing, electronic payments, online marketplaces, and digital operational applications have created new opportunities for businesses. However, adopting these technologies does not automatically produce long-term competitive advantages.
According to Berli Lana's research, the key challenge lies in an organization's ability to use technology strategically. Digitalization should not be viewed simply as the adoption of technological tools, but as an organizational transformation process involving leadership, strategy, resources, innovation, and adaptability.
Strategic Leadership Becomes a Driver of Digital Agility
The study examines the relationship between strategic leadership, digital agility, and sustainable business model transformation among SMEs in Central Java.
A total of 250 SME owners and managers participated in the research. Respondents were selected based on several criteria, including having operated their businesses for at least three years, having adopted at least one digital technology, and being directly involved in strategic decision-making.
The respondents represented several business sectors. Food and beverage businesses accounted for 32.8 percent, followed by manufacturing at 24.4 percent, creative industries at 22.4 percent, and services and retail at 20.4 percent.
In terms of business age, 43.2 percent of the respondents had operated their businesses for 6–10 years, 29.6 percent for 3–5 years, and 27.2 percent for more than 10 years. Business owners represented the majority of respondents at 69.2 percent, while managers accounted for 30.8 percent.
Data were collected through a structured questionnaire using a seven-point rating scale. The data were then analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) with SmartPLS 4.
In simple terms, the analysis was used to determine whether strategic leadership is associated with SMEs' ability to respond to digital change and whether this digital responsiveness contributes to sustainable changes in their business models.
Strong Relationship Between Leadership and Digital Agility
The findings show a strong relationship between strategic leadership and digital agility.
The relationship between strategic leadership and digital agility produced a coefficient of 0.653 with a p-value below 0.001. This means that stronger leadership capabilities in setting strategic direction, encouraging innovation, allocating resources, and supporting organizational change are associated with higher levels of digital agility among SMEs.
The research model indicates that strategic leadership explains 42.6 percent of the variation in digital agility.
This finding demonstrates that SME digital transformation is not solely determined by the availability of technology. Leadership decisions regarding priorities, resource allocation, innovation, and organizational experimentation also play an important role.
This is particularly relevant for SMEs, where major strategic decisions are often concentrated in the hands of business owners or key managers.
Digital Agility Becomes the Bridge to Business Transformation
One of the strongest findings concerns the relationship between digital agility and sustainable business model transformation.
The research found a coefficient of 0.719 with a p-value below 0.001, indicating a positive and significant relationship between digital agility and sustainable business model transformation.
Digital agility goes beyond the ability to use digital applications or platforms. It refers to an organization's ability to quickly identify opportunities, use digital information for decision-making, and adjust products, services, operational processes, and customer interactions in response to market changes.
Digital agility explained 51.8 percent of the variation in sustainable business model transformation within the research model.
This suggests that SMEs capable of quickly recognizing digital opportunities and taking action are better positioned to redesign how they create, deliver, and capture business value.
Digital Agility Mediates the Impact of Leadership
The most important finding concerns the role of digital agility as a bridge between strategic leadership and sustainable business model transformation.
The mediation analysis produced an indirect-effect coefficient of 0.470 with a p-value below 0.001. The result indicates that strategic leadership contributes to business transformation through the development of digital agility.
This finding shows that having a strong digital vision is not enough. Leadership vision must be translated into an organizational ability to act quickly, adapt to changing conditions, and implement tangible changes.
Berli Lana's research therefore presents a clear pathway: strategic leadership provides direction, while digital agility translates that direction into sustainable business model transformation.
This means that sustainable digital transformation requires more than investment in technology.
Implications for SME Development
The findings provide several practical implications for SME owners, managers, and policymakers.
First, SME digitalization programs should not stop at providing access to technology. Training programs should also strengthen strategic leadership, data-driven decision-making, innovation, and organizational adaptability.
Second, SME owners and managers need to view technology as part of their broader business strategy. Social media, marketplaces, digital payment systems, and operational applications should contribute to tangible improvements in customer service, operational efficiency, product development, and new revenue opportunities.
Third, SME development programs should encourage organizational cultures that support experimentation and rapid responses to market changes.
The research also reinforces the idea that SMEs do not always need to compete with larger companies through greater resource capacity. Speed, flexibility, and adaptability can become strategic strengths for SMEs.
Through this research from Universitas Amikom Purwokerto, Berli Lana positions digital agility as an important mechanism connecting leadership capability with sustainable business model transformation. The approach expands the understanding of digital transformation as a process of organizational capability development rather than merely technology adoption.
About the Author
Berli Lana is an academic and researcher affiliated with Universitas Amikom Purwokerto, Indonesia. His research in this article focuses on strategic leadership, digital agility, digital transformation, sustainable business model transformation, and SME development and competitiveness.
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