Strategic Leadership and Digital Transformation in Driving SME Performance in Indonesia

Abstract

This study aims to explore the role of strategic leadership in driving digital transformation and its implications for the performance of small and medium-sized enterprises (SMEs) in Central Jakarta. The phenomenon under examination stems from the persistent gap between the adoption of digital technology and the optimization of SME performance within the context of the digital economy. This study employs a qualitative approach using a case study design, which allows for an in-depth understanding of organizational experiences and internal dynamics. Data were collected through semi-structured interviews, participatory observation, and documentation from 8–12 informants selected using purposive and snowball sampling techniques. The results of the thematic analysis indicate that digital transformation is influenced by leaders' ability to formulate a digital vision, foster organizational learning, and manage the challenges of change, particularly regarding digital literacy and human resource resistance. Furthermore, digital transformation has been shown to contribute to improved SME performance through operational efficiency, market expansion, and increased competitiveness, in line with the findings of recent qualitative studies that emphasize the importance of leadership and adaptive capabilities in the SME digitalization process (Sutardi et al., 2026). This research provides theoretical contributions by enriching the digital transformation literature based on a qualitative approach, as well as practical implications for developing SME leadership capacity. Future research is recommended to expand the geographic context and methodological approach to gain a more comprehensive understanding.