Digital Transformation of Industrial Organizations Toward An Integrated Framework

Journal of Change Management
Reframing Leadership and Organizational Practice
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Digital Transformation of Industrial Organizations:

Toward an Integrated Framework
Faisal Imran, Khuram Shahzad, Aurangzeab Butt & Jussi Kantola
To cite this article: Faisal Imran, Khuram Shahzad, Aurangzeab Butt & Jussi Kantola (2021)
Digital Transformation of Industrial Organizations: Toward an Integrated Framework, Journal of
Change Management, 21:4, 451-479, DOI: 10.1080/14697017.2021.1929406
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JOURNAL OF CHANGE MANAGEMENT:
REFRAMING LEADERSHIP AND ORGANIZATIONAL PRACTICE
2021, VOL. 21, NO. 4, 451–479
https://doi.org/10.1080/14697017.2021.1929406
Digital Transformation of Industrial Organizations: Toward an

Integrated Framework
a b
Faisal Imran , Khuram Shahzad , Aurangzeab Butta and Jussi Kantola c
a
School of Technology and Innovations, University of Vaasa, Vaasa, Finland; bSchool of Technology and
Innovations/Innovation and Entrepreneurship InnoLab, University of Vaasa, Vaasa, Finland; cDepartment of
mechanical and materials engineering, University of Turku, Turku, Finland
ABSTRACT KEYWORDS
Industrial organizations are responding to new risks and Digital transformation (DT);
opportunities originating from exponentially growing and industrial organizations;
disruptive digital technologies, by taking company-wide digital leadership; culture; structure;
sociotechnical system theory
transformation initiatives. However, the key enablers of such
(STS)
digital transformation initiatives that facilitate operational
performance outcomes in industrial organizations demand
further investigation. Therefore, drawing on the sociotechnical
system theory (STS), the objective of this study is to explore the
digital transformation enablers and their impact on performance
outcomes. Research data was collected from four leading
industrial organizations that engaged in digital transformation
programmes. Our results indicate that leadership, structures,
and culture are the key enablers of digital transformation that
help industrial organizations to achieve performance outcomes
(i.e. collaboration, customer-centricity, and agility). By providing
an empirically grounded integrated framework with future
research propositions, this study contributes to the existing
literature on digital transformation and sociotechnical system
theory.
MAD statement
This article aims to make a difference by exploring industrial
digital transformation in order to identify the key enablers and
performance outcomes. We highlight the need for alignment
and joint optimization of social and technical systems to
effectively capitalize on the digital transformation initiatives.
Moreover, we call for urgent attention to the development of
leaders, as well as the further identification of supportive digital
transformation leadership competencies. Competent leaders
assume a central role in correcting outdated and invalid
assumptions, conceptualizing new ideas, and reinforcing cultural
values. Furthermore, we elaborate the necessity of cultural
transformation in industrial organizations for impactful digital
transformation. Lastly, our findings confirm the significance of
organizational structure in digital transformation and
simultaneously warn that too little is happening.
CONTACT Faisal Imran fimran@uva.fi

© 2021 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group
This is an Open Access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives License
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452 F. IMRAN ET AL.
Introduction
Industrial organizations are experiencing the transformative impact of digital technol-
ogies (Chanias & Hess, 2016; Porter & Heppelmann, 2015); meanwhile, little conceptual
and empirical research has examined how industrial organizations are digitally trans-
formed (Ivančić et al., 2019; Warner & Wäger, 2019). Digital transformation employs a
combination of advanced digital technologies (technical systems) and organizational
practices (social system) to enable major business improvements – better products and
services, a competitive advantage, enhanced customer experiences, business model inno-
vation, and new business processes (Autio et al., 2018; Ivančić et al., 2019; Niemi et al.,
2021; Singh & Hess, 2017; Vial, 2019). In response to the potential of these positive
business outcomes (Ivančić et al., 2019), digital transformation has become a strategic
imperative on industrial organizations’ agenda (Vial, 2019).
Digital transformation has not only affected the product and service offerings of indus-
trial organizations but has also changed the way they operate (Vial, 2019) and, therefore,
requires a company-wide transformation programme – the digital transformation of
organizations. The relationship between technology implementation and organizational
transformation is not new in the literature (Mumford, 2006). Trist and Bamforth (1951)
studied how the interconnected nature of implementing new technologies affects organ-
izations, which led to the emergence of sociotechnical system theory (STS). The STS
theory considers both the technical and social factors affecting change within an organ-
ization (Cherns, 1976; Davis et al., 2014). Similarly, the concept of digital transformation
can be divided into two main categories: technical systems (advanced digital technol-
ogies such as cloud computing, internet of things, digital platforms, big data, and ana-
lytics) (Gilchrist, 2016) and social systems (people, culture, goals, procedures, and
structures) (Davis et al., 2014). Moreover, organizations are considered complex systems
that consist of interdependent components (Davis et al., 2014); hence, designing a
change for one system (implementation of digital technologies) without considering its
effects on other parts of an organization (the social system) will limit its effectiveness
(Hendrick, 1997). Therefore, we posit that the STS theory is a powerful lens for examining
the digital transformation of industrial organizations, at a time when the expanding
influence of digital technologies is disrupting business operations.
Most recent studies have focused on the technological aspects of digital transform-
ation (Henriette et al., 2015; Porter & Heppelmann, 2015; Sony & Naik, 2020), while
others have highlighted the need for organizational changes (Duerr et al., 2017; Gehrke
et al., 2015; Matt et al., 2015) to accomplish digital transformation. In addition, there
are calls to extend the application of STS theory to a wider range of complex problems
(e.g. Davis et al., 2014; Sony & Naik, 2020; Verhoef et al., 2019), such as the challenges
posed by digital transformation of industrial organizations. Additionally, Matt et al.
(2015) have also called for empirical research to test four dimensions (the use of technol-
ogies, changes in value creation, structural changes, and financial aspects) to discover
commonalities or differences in organizations’ digital transformation strategies. Prior lit-
erature remains insufficient for explaining the complex phenomenon of digital transform-
ation in industrial organizations (Ivančić et al., 2019), which highlights the utility of
applying the sociotechnical embedded paradigm (optimization of social and technical
systems).
JOURNAL OF CHANGE MANAGEMENT: REFRAMING LEADERSHIP AND ORGANIZATIONAL PRACTICE 453
Although the digital transformation concept has been adopted broadly and our knowl-
edge of digital practices has grown considerably over the past decade (Sony & Naik, 2020;
Vial, 2019; Warner & Wäger, 2019), prior literature fails to provide a comprehensive under-
standing of organizational change (in terms of digital transformation) by offering an inte-
grative perspective. Therefore, a holistic understanding of such a transition towards
digital transformation is required to produce clear guidelines for both research and prac-
tice in organizational change management. Our literature review revealed the existing
fragmented research on digital transformation; we learned that the seminal literature is
missing a multiple case study (Sony & Naik, 2020) that explores the key enablers of
digital transformation progression in a contemporary setting. Therefore, our study aims
to identify and explore digital transformation enablers and performance outcomes by
providing an integrative research framework for digital transformation in industrial
organizations.
Digital Transformations
Digital transformation has emerged as an important phenomenon for researchers (Bhar-
adwaj et al., 2013) and practitioners (Fitzgerald et al., 2013). This is revolutionizing the way
industrial organizations operate through the use of digital technologies (Parida et al.,
2019), which is leading organizations toward a new era of industrialization, known as
Industry 4.0. Thus, organizations have been forced to alter the value creation paths on
which they have relied in the past to remain competitive by introducing a variety of
digital technologies (Vial, 2019). These digital technologies include but not limited to
the industrial internet of things (IIoT), cloud computing, advanced algorithms, artificial
intelligence, hyper-connectivity, self-learning systems, automation, big data and analytics
(Gilchrist, 2016). Organizations are now finding new ways to operate with the help of
these technologies by devising strategies that embrace the implications of digital trans-
formation and drive better operational performance (Hesse, 2018). These digital technol-
ogies are just a small part of the digital transformation of organizations (Vial, 2019), while
it requires more effort by organizations to actually digitally transform themselves.
Researchers and practitioners use both terminologies, i.e. digital transformation and
digitalization, when referring to the same phenomenon; however, some researchers
have tried to differentiate the meaning of both terms (Bockshecker et al., 2018). Both
terms are derived from digitization, which is the technological transformation of analogue
information into a digital format (Da Silva Freitas Junior et al., 2016). Parida et al. (2019,
p. 12) defined digitalization as the ‘use of digital technologies to innovate a business
model and provide new revenue streams and value-producing opportunities in industrial
ecosystems.’ Hinings et al. (2018, p. 53) defined digital transformation as follows: ‘By
digital transformation we mean the combined effects of several digital innovations bring-
ing about novel actors (and actor constellations), structures, practices, values, and beliefs
that change, threaten, replace or complement existing rules of the game within organis-
ations, ecosystems, industries or fields.’ Moreover, (Vial, 2019) defined digital transform-
ation as ‘a process that aims to improve an entity by triggering significant changes to
its properties through combinations of information, computing, communication, and
connectivity technologies.’ These definitions show that the term ‘digitalization’ is used
for business models, along with product and service digital features, while ‘digital
454 F. IMRAN ET AL.
transformation’ is a more holistic concept that covers the changes needed in the organ-
ization itself to be compatible with digitalization. Since the focus of our research is
towards the organizational changes, we use the term ‘digital transformation’ in this article.
In recent years, scholars have explored the most important aspects of the digital trans-
formation of organizations on a generic or conceptual level. Matt et al. (2015) highlighted
the four most important dimensions of digital transformation strategy, i.e. the use of tech-
nologies, changes in value creation, structural changes and financial aspects. They argued
that the alignment of these four dimensions lead organizations toward a holistic frame-
work that can result in the formulation of a digital transformation strategy for organiz-
ations. Empirical study by Chanias and Hess (2016) suggests that organizations need to
develop separate digital transformation units to create governance and collaboration
mechanisms, which can help in developing successful digital transformation strategies.
However, the focus of their study remained narrow, i.e. how digital transformation strat-
egies have emerged in incumbent organizations. Gehrke et al. (2016) listed nine main
challenges that organizations face in their digital transformation. These challenges
include a lack of tools, methods and concepts for process digitization; unclear migration
scenarios; a lack of structure and direction for the management of transformation; organ-
izational structure; a lack of collaboration and cooperation; time and budget constraints;
low awareness; an unsupportive culture and a lack of competencies. They argued that
digital transformation involves overcoming these challenges. Moreover, the literature
has addressed the links between digital transformation and business model innovation
(Parida et al., 2019), digital innovation (Hinings et al., 2018), and building dynamic capa-
bilities for digital transformation (Warner & Wäger, 2019; Yeow et al., 2018). Most of these
studies are conceptual or remained to the literature reviews, which raises the need of
empirical study that what actually industrial organizations are going through in their
digital transformation journey.
Digital Transformation and Sociotechnical System Theory

Since digital transformation is powered by advanced digital and hyper-connected tech-
nologies, it requires a reconsideration of human-technology interaction within an organ-
ization (Mitki et al., 2019). Therefore, digital transformation is considered a sociotechnical
process that includes social and technical aspects that interact to achieve a common goal
(Sony & Naik, 2020). The literature has addressed the relationship between technology
and organizational transformation through several theories: sociomaterial theory (Leo-
nardi, 2013), actor-network theory (Callon, 1999), structuration theory (Giddens, 1979),
and technology affordances (Gibson, 1979). For example, sociomaterial theory refers tech-
nologies as group’s localized experiences (Leonardi, 2012) as it argues that the material
and social are inseparable; therefore, the distinction between technologies and humans
is not acceptable (Orlikowski & Scott, 2008). Structuration theory lacks a consistent struc-
turation account of technology (Jones & Karsten, 2008) and addresses very little about
technology-led change. Likewise, technology affordances approach is limited to action
potential of a technology, i.e. what people or organizations can do with a particular tech-
nology in order to achieve their goals (Majchrzak & Markus, 2012). However, digital trans-
formation requires a holistic approach that can address organization as a whole in order
to implement technology-driven change. Therefore, sociotechnical theory is considered
to be a comprehensive theoretical stance to studying digital transformation (Mitki et al.,

2019; Trist & Bamforth, 1951).
STS thinking emerged in 1951 when the UK Tavistock Institute discovered the inter-
related nature of technology and social aspects of work while studying the introduction
of coal-mining machinery (Trist & Bamforth, 1951). STS theory requires consideration of
both technical and social factors when promoting change within an organization
(Cherns, 1976); it considers an organization a complex system comprising many interde-
pendent components. Thus, designing change in one segment of this system requires
changes in other segments to enhance the effectiveness of this change (Hendrick,
1997). Moreover, STS theory provides a holistic overview of organizational transformation
triggered by technological changes, covering organizational structure (Mumford, 2000),
organizational culture (Pasmore et al., 2019), and skills and competencies requirements
(Sony & Naik, 2020).
The principles of STS theory have been applied successfully in several key domains,
especially concerning new technologies and the redesigning of work within organizations
(Davis et al., 2014). Some scholars have reported that most studies on digital transform-
ation focus on the technical aspects of this change (Palazzeschi et al., 2018; Sony & Naik,
2020), while others have called for research on the sociotechnical viewpoints of digital
transformation (Avis, 2018; Davies et al., 2017). Thus, we argue that the STS theory pro-
vides an ideal foundation for studying the phenomenon of digital transformation in
organizational change. This study applies the STS theory to studying digital transform-
ation in industrial organizations.
Method
In this study, we adopted a qualitative approach by conducting a multiple case study to
address the research objectives. A case study approach gives good justifications for ques-
tions of ‘what,’ ‘how’ or ‘why’ when a certain phenomenon occurs, and for obtaining a
first-hand and in-depth understanding (Yin, Clarke, Cotner & Lee, 2006). Moreover, case
study investigations are considered appropriate when the research is in the early
stages and variables of the research topic need to be defined by employing a holistic
vision (Matthews & Ross, 2010). It allows researchers to study practices and situations
that are understudied and not yet completely described and comprehended, such as
the topic of digital transformation (Ivančić et al., 2019). Therefore, a case study approach
was chosen to gain first-hand insights and explore digital transformation processes in
incumbent industrial organizations in a holistic manner.
Case Selection
This research is conducted in four global industrial organizations with their headquar-
ters in the Nordic countries. The selection criteria of all case companies were based on
methodological expediency. Methodological expediency allows the selection of cases
that are unique, easily accessible for researchers and provides the opportunity to
study the phenomenon in question (Huberman et al., 2012). All case organizations
are hard-core engineering companies and were established during the second indus-
trial revolution or earlier (Imran & Kantola, 2018). They have experienced the necessary
456 F. IMRAN ET AL.
changes from the old way of doing business to the modern requirements of the digital
age. Case selection, therefore, focused on companies that have started their digital
transformation programmes in the past 5 years and are advocates of digital transform-
ation in their respective business communities. Due to a non-disclosure agreement
(NDA), aliases are used for all the case companies. Table 1 summarizes the key
details of case organizations.
Data Collection
We relied on in-depth interviews and publicly available documents of case companies
(web blogs, interviews, videos, reports, information on websites) to gain insights into
the digital transformation programmes for this study. In total, we conducted twelve
in-depth interviews with the experienced personnel who directly participated in the
digital transformation programmes of their respective organizations. Six out of twelve
interviewees were from the top-level management of their organizations. Marshall
and Rossman (2011) call such participants ‘interviewing elite.’ These individuals are con-
sidered influential, prominent, and well informed, having acquired the status of ‘elite’
through achieving senior positions in their organizations (Delaney, 2007). Such partici-
pants can provide valuable information, broader views of organization strategy regard-
ing the phenomenon in question, and future plans of the company (Marshall &
Rossman, 2011). On the other hand, the remaining six interviewees were from mid-
level management, implementing or coordinating digital transformation strategies in
their organizations. Therefore, this study emerges from the knowledge of elites who
are devising digital transformation strategies and mid-level managers who are practi-
cally implementing these strategies, and both enhance the quality of the data. More-
over, there were six face-to-face and six online interviews. Table 2 provides the
designation of each participant, along with the codes used for quotations. We followed
a snowball-sampling strategy (Marshall & Rossman, 2014), in which the first informant
suggested additional informants and facilitated access within the organization. The
interview transcripts comprise more than 197 pages and 950 min of transcribed
material. For the transcription of interviews, we used an online platform for converting
speech into text. ‘First author’ proofread the transcriptions by listening to each
recorded interview.
Table 1. Details of case organizations.

Case Description
Case A Renowned player in smart technologies and complete lifecycle solutions for the marine and energy sectors
A separate dedicated digital organization was developed by hiring CDO to lead DT in the organization
5,1 Billion Sales in 2019
Case B Market leader in its field and is a pioneer of variable frequency drives, cooling & heating solutions and energy
management
Digital transformation responsibilities were dedicated to business segment’s heads
Case C Very big player in forest, wood, and papers industry. Also expanding their business in energy market
Digital transformation responsibilities are dedicated to unit heads.
Case D Global leader in engineering and service solutions
Created new digital innovation unit for digital transformation of itself.
Table 2. Interviewees’ designation and codes.

Profile of Interviewees Code
Vice President (Digital Portfolio Mgt.) VP
GM Digital Deployment and Support GM
Director Digital Culture DDC
Senior Manager Digital Transformation SMDT
Senior Project Manager Digitalization SPM
Manager Digital Transformation MDT
Manager Digital and IT systems MD
Project Manager PM
Senior Manager Digitalization SMD
Global Head of a business unit GH
Global Business Program Manager GBM
Vice President, IT Strategy and Governance VPIT
Data Analysis
We systematically coded and analysed the transcribed data (Gioia et al., 2013). We fol-
lowed the data analysis technique of Gioia et al. (2013), in which raw data is organized
into concepts and thereafter develops themes that facilitate the identification of digital
transformation patterns in industrial organizations. We used Nvivo 12 software that
facilitated the coding approach and enabled us to keep a record of the emergence of
concepts and relationships. Initially, we used an open coding approach where raw
data was analysed and categorized (Huberman et al., 2012). In the second round,
we grouped all coding into four main themes, i.e. leadership, structures, culture and
performance outcomes.
Findings
Digital Transformation
Before we provide details of the enablers and performance outcomes of digital transform-
ation that the analysis identified, it is important to ask and answer: ‘What does digital
transformation actually mean for the case companies?’ Our analysis identified seven
different understandings of digital transformation. Approximately 66% of the intervie-
wees mentioned that it is about customer centricity. For example, SMDT stated, ‘It’s basi-
cally everything and anything we’re looking into digitalizing, or making the customer
experience more digital’. SPM added, ‘digitalization is actually the realization of transfer-
ring all this into real customer perspective.’ GM put it, ‘It connects us with customers more
closely. I think this is the biggest difference.’ MDIT mentioned, ‘how I see the digitalization
is that you start selling something that your customers don’t even know that they need.’
Similarly, an equal proportion (i.e. 66%) of participants thought that as a business enabler,
digital transformation is a big opportunity for industrial organizations, in terms of value-
generation capacity, value addition, creating new business, enhancing current offerings
into digital, better chances of success, and providing more services than products. More-
over, 50% of participants perceive digital transformation as something that facilitates
operational efficiency. For example, PM stated, ‘It helps in reducing resource waste.’
MDT mentioned, ‘with digitalization, you can do more with less.’ VPIT added, ‘It is
giving us a different playground. It goes more like agility-based trials, experimentation,
458 F. IMRAN ET AL.
new ways of doing things, new ways of solving problems, and bringing operational
efficiency.’
We found that 25% of the participants viewed digital transformation as cultural change.
MDT stated, ‘It’s more than tools and processes, it’s really about the mindset change.’ GM
also stated similar views: ‘It’s a mindset change and cultural change that is happening
right now.’ MDIT added, ‘It’s change of culture. We need to be faster and we need to
have more services than products.’ Two participants mentioned that digital transform-
ation brings experimentation capabilities to the incumbent originations. For example,
PM stated, ‘It allows experimentation; for example, you can develop a digital twin of a
product for this purpose, to ensure that product value is deliverable.’ An equal number
of participants viewed it as something that integrates the whole value chain. SPM
explained, ‘It means integration. It’s about integrated solutions and a way of thinking
in the life-cycle coverage. It’s not about just focusing on individual products but taking
care of the whole life cycle.’ Moreover, the same number of participants said that it
brings transparency. DDC elaborated, ‘It brings visibility for the managers to see real
time what’s happening in the organization, what are the bottlenecks, and where are
the problems.’ GH explained, ‘this is a huge opportunity to bring transparency to the
whole value chain.’ Lastly, one participant also viewed it as flexibility. PM said, ‘digitaliza-
tion means flexibility; it does not mean standardization.’ Figure 1 summarizes these
findings regarding what digital transformation means for industrial organizations and
how they view it.
Figure 1. Conceptualization of digital transformation in cases (interview based).

Leadership
Leadership is one of the most important enabler for the successful digital transformation
of industrial organizations among our cases. Every company develops its strategy accord-
ing to its own needs and stage of the digital transformation process, but leadership
remains a key enabler. Our data analysis strengthens this notion; incumbent organizations
are paying special attention to leadership development for impactful digital transform-
ation. Our data shows two different strategies that the case organizations adopted for
this purpose. First, one of the case organizations developed a separate organization
that provides digital support to the main businesses. Second, the remaining case organ-
izations have allocated digital transformation tasks to the business/segment heads.
However, the commonality between both strategies is that they have allocated digital
transformation tasks to the top leadership of their organizations, whether they are
working in a separate support organization or as a head of any business segment or func-
tion. Moreover, we found that the leadership responsible for digital transformation
emerges from both external recruitment and internal allocation of additional responsibil-
ity, or even through shuffling from among their main positions to the digital transform-
ation-related positions. For example, VP mentioned, ‘to accelerate this digital
transformation, our organization has recruited a highly qualified digital leadership team
and established a new digital organization with more than 400 existing employees.’ On
the other hand, SMD explained their strategy by saying, ‘we have delegated digital trans-
formation to the function heads. They are responsible for managing required resources to
execute digital transformation strategy.’
We identified two main leadership areas on which incumbent organizations are primar-
ily focusing for impactful digital transformation. First, implementing digital transform-
ation requires several work roles of leadership. These include spreading awareness of
digital transformation topics, promoting collaboration, driving digital change, driving cul-
tural aspects of digital transformation, leading by example, promoting mentoring/coach-
ing-style leadership, being smart followers, bringing transparency to their actions as well
as throughout the organizational value chain, and being value-driven. In order to success-
fully play these roles, industrial-organizational leadership must work on certain compe-
tencies, the second identified leadership area in our study. These competencies include
adaptability, the right attitude, communication skills, data-driven decision-making,
empowerment, failing fast, experimentation, open-mindedness, risk-taking, trust,
surface-level technical knowledge, and vision.
Leadership and Performance Outcomes

Agility: Our results show that leadership has a key role in attaining organizational agility.
We found that 50% of the participants gave their views on how leadership can play its role
in attaining agility. A few of them related it to the leadership competency of adaptability
and flexibility. For example, SMDT stated, ‘there is one thing that is key, which is adapta-
bility. You can also call it being agile or being flexible, but adaptability is basically strong
change-leadership skills.’ SMDT further added, ‘It means that there is no more strategic
planning or yearly plans, there is no more project linear execution. It’s always about
being able to adopt the change, based on the new information, changing markets, and
460 F. IMRAN ET AL.
changing situations.’ SMDT also stressed that leadership should come out of the KPI
mindset and think for the betterment of the overall organization as a whole. He added,
‘It’s not anymore about my team or my domain, but it could be that you as a leader
are operating agile teams and willing to share the resources for innovation projects or
specific projects that are not necessarily connected to your tight KPIs.’ VP stated that
‘Job of leadership is to challenge the existing processes of the organization by bringing
new and agile ways of working’. GM said that ‘they are using agile ways of working
now to manage the services’. MDIT shares similar views: ‘We have the technology avail-
able and we can transform or change our processes, make them smart, fast, or agile,
but then the biggest role of leadership required here is how they transform the people
in order to adopt these changes.’ So, leaders must play new work roles and develop
those competencies that this study identifies, in order to make their organization agile
for digital transformation.
Customer Centricity: Similarly, our data analysis shows that without the complete com-
mitment of leadership, it is impossible to achieve customer centricity in the organization.
We found that 75% of the participants mentioned the role of leadership in attaining cus-
tomer centricity for impactful digital transformation. The responses of the participants can
be categorized into two main streams. The first suggests that leaders should work to
provide solutions to their customers and drive value for them. For example, MDT
stated, ‘different kinds of things are affecting our customers and their businesses. So,
as leaders, we need to be ready to solve those future problems and give them solutions.’
Chief digital officer (CDO) mentioned (in an online interview), ‘my specific responsibilities
include cyber security, all of IT, all of the innovation, processes, and capabilities, including
working with start-ups and all digital product development. All of that translates into
“how do we drive value for customers through digital?”’ He further added, ‘It starts
with the leader’s knowledge of products and customers, what they want, and where
they’re changing.’ MDIT viewed it as ‘you start selling something that your customers
don’t even know that they need.’
The second stream of responses on customer centricity spoke about the leader’s role in
co-creation with customers. For example, SMDT stated, ‘leaders should be piloting
together with the customers.’ VP added, ‘in innovation, we are trying to be customer-
centric. Leaders need to think about how we can involve much more the voice of custo-
mers, instead of thinking how to move from an idea all the way to the product.’ PM added,
‘a big challenge for leadership today is to stay technically updated about all new devel-
opments happening in the industry. It is also an opportunity to be on the frontline and
shaping the future, together with the customers.’ SMDT said, ‘leaders have to involve cus-
tomers in piloting. It requires leaders to balance the speed of execution with the level of
quality needed.’
Collaboration: Furthermore, it is very important for leadership to promote a collabora-
tive environment in the organization for impactful digital transformation. Our data analy-
sis shows that 50% of the interviewees spoke about the role of leadership in promoting
collaboration for digital transformation. MDT stated, ‘we are promoting collaboration
quite a bit here. We have a lot of hidden knowledge among the people who have
been working for us for 20–25 years … therefore, it is important to make collaborations
(between experienced and novel employees) within different kinds of tasks.’ SMDT
added, ‘you should know how to coordinate, how to network, and how to pull the
Figure 2. Leadership roles and competencies to achieve performance outcomes.
strings of knowledgeable people and connect them with others.’ He further associated
this with the visionary competency that ‘leaders who have this long-term sense of
giving direction while, at the same time, having the teams co-develop, create, and inno-
vate within that main vision. And it’s the vision, which doesn’t just look inward to the
company but looks to more of an ecosystem view of opportunities.’ SPM mentioned
that ‘when it comes to the management, it’s all about connecting people.’ MDIT added,
‘so, basically, the data is available that we can start using, and then we need to put
people together, so they are not competing in the wrong way.’ GBPM and SPM had
similar views on leaders needing to find the right balance between digital and business
people and mixing them well to generate the required results.
Figure 2 summarizes our findings on roles and competencies that leadership requires
to achieve performance outcomes.
Structure
Organizational structure emerged as the second enabler of digital transformation of our
case companies. A general perception of industrial organizations is that they possess very
rigid structures, mainly due to their long, successful history, traditional deep-rooted lea-
dership, and product-oriented approach. We have found this to be true through our data
analysis; however, we have also observed new structures popping up in these organiz-
ations to implement a digital-transformation agenda. As the previous section discusses,
one of the case organizations developed a whole new structure (digital organization) in
order to support digital transformation for its business organizations, while the rest of
the organizations delegated digital transformation tasks to business/functional heads,
who developed new teams to support digital transformation within their businesses or
functions. We also learned of some steps taken, when one of the case organizations devel-
oped a new organization-level team that stays in contact with all the businesses and
462 F. IMRAN ET AL.
keeps track of their digital-transformation initiatives, providing digital support as well.

Thus, incumbent industrial organizations have formed new structures to support digital
transformation. However, the extent to which it has impacted the existing structures of
the organization is debatable. Our data showed that it has very little impact on the exist-
ing formal structures of case organizations, although informal structures arise.
The hierarchy of industrial organizations still consists of long chains. For example, as
SPM explained,
If we take the example here of services, we have four team vice presidents (VP), every VP has
six-to-eight directors under him with their own management teams, and every director has
his own general manager under him, who also has his own management team. So, as an
engineer, you can imagine that if you have an idea to run a project, it takes a while to get
somewhere.
Similarly, SMDT stated that digital transformation has not yet impacted organizational
structure, but it is shaking the informal structures of these organizations. For example,
the VP stated, ‘I have a team of 35 people; I have instructed all of them to report to
one person, and that one person reports to me.’ Similarly, GM added, ‘we are working
on becoming less and less hierarchical all the time, especially for digital transformation.
But it goes hand-in-hand with company culture as well.’
As industrial organizations still possess a rigid hierarchy, and formalization is also high
in the case organizations. The interviewees understand that they are still very process-
oriented organizations. For example, SMD said, ‘‘(we are) very much kind of a process-
oriented company.’ PM explained, ‘when we do some project, we have some gate-
models, we have decision-making points on how we have to make decisions. When we
have to make a decision, it should be based on those points and what the decision
should be.’ MDIT added, ‘within business organizations, it is much more bureaucratic.’
While addressing the formalization and hierarchy, SPM said, ‘the corporate structure actu-
ally defines that you cannot do things without approval. And approval can have several
layers. Still, I would say that we, as a company, have quite a good focus on empowering
people.’ GBPM also shared his views that ‘we have globally defined processes and ways of
working, but it is more like a framework that managing directors can mold according to
their needs.’ He further added that ‘personally, I like freedom with responsibility … you
take care of this part and I’ll take care of that part. How you do it is up to you.’ So, our
data shows that leaders who are dealing with digital and related topics are more open
toward less formalization and promoting a more goal-oriented approach.
Structure and Performance Outcomes

Agility: We found that organizational structures play a key role in attaining organizational
agility. Approximately 66% of the interviewees linked the role of organizational structure
to attaining organizational agility. In our analysis, we found three main categories of ways
that structural changes can bring agility to incumbent organizations. First, a few partici-
pants identified the process-oriented approach (formalization) as one of the hurdles in
attaining organizational agility. They stressed the need to change that, in order to
become agile. For example, MDT stated, ‘we are a waterfall company and the way of
doing things is very slow. It doesn’t respond to the changes as fast as needed for this
transformation.’ SMDT stated that ‘we are looking into how we move from a waterfall
model to maybe a hybrid model, if not necessarily agile.’ SMDT further explained the
waterfall model as ‘basically very long, rigid. It’s not agile at all … we must move away
from this approach toward agile and iterative ways of doing things.’ Second, VPIT indi-
cated that they are becoming flexible in goal-setting now, to attain organizational
agility, which, again, is linked with formalization. He stated, ‘earlier we had yearly goals,
but now we have adopted a more agile way than that. So, we can change goals during
the year by analyzing the changing environment.’ He further added, ‘earlier, it was a
taboo that you could not change yearly goals, but now we are becoming more
flexible.’ Third, interviewees linked flexibility in resource sharing and resource allocation
as something that can promote organizational agility. DDC explained, ‘we should adopt
an agile working environment where we can utilize cross-functional resources. Currently,
people are allocated to certain positions by function or organization, and cross-utilization
of competencies is not very high.’ MDIT stated that ‘there should be no boundary lines
between teams. You should be able to combine people and knowledge from anywhere
in the organization into one team. … The structure should be able to allow that; only
then you can be agile.’ She further added, ‘You need to empower such teams (less forma-
lization) and that’s the key.’
Customer Centricity: If we analyse the topic of structures in relation to customer centri-
city, it ultimately falls under external collaboration or integration topics. In relation to col-
laboration, the topic of structures addresses both internal and external collaboration.
Therefore, we are discussing results related to external collaboration (only customers/
no other stakeholders, e.g. suppliers) in this section. We found that 75% of the intervie-
wees shared views on how their organizations are integrating their customers with
their systems and structures, in order to attain customer centricity for digital transform-
ation. One of the case organizations made major structural changes for this purpose.
SMDT explained, ‘from January next year, we are reorganizing ourselves in order to be
more customer centric … we understand that customer centricity is one of the principles
that digital transformation is bringing.’ VP expressed the same views:
One of the things pushing us to merge now from three divisions to two is around this whole
transformation. Because if we want to be customer centric, there is no point in keeping the
services and business organizations separate. It is required if you really want to be customer
centric and serve the customer throughout the life cycle, as one company.
SPM raised the need to break the silo-oriented approach toward customers and stressed
the need for life-cycle thinking when delivering value to the customers. He stated, ‘but the
challenge is that we are still silo oriented. People have to focus on the whole package that
we have to deliver to the customer.’ This view is also aligned with previous views of VP
and SMDT, on organizational restructuring to attain customer centricity. Similarly, the
concept of co-creation with customers also requires close collaboration between the
organization and its customers. It also raises the need for changes in organizational struc-
tures, to integrate customers with the organization. GM explained, ‘we need to open up
our landscape toward customers … it means that we will co-create with customers much
more.’ GM further added that ‘if somebody wants to test a new type of doing business or
provide new services with the customers, we allocate a separate team for this purpose …
it’s like an initial internal start-up setup.’ CDO shared his views on that, ‘even though we
464 F. IMRAN ET AL.
are focusing on digitalization within the company, the benefits will be reaped by the cus-
tomers. Co-creation and co-innovation will be a standard process, and the new ways of
working will show in everything we do, from sales to manufacturing.’
Collaboration: The topic of collaboration is very much interlinked with the third con-
struct of structures, i.e. integration. All of the respondents shared their views on how
structural changes can lead to enhanced collaboration in their respective organizations.
The topic of collaboration in relation to structures can be divided into two main cat-
egories, i.e. internal collaboration and external collaboration.
Regarding internal collaboration, we have identified three types of collaboration
affecting structures. First, case organizations are promoting collaboration between experi-
enced and inexperienced personnel, by bringing them closer to each other on different
topics. The purpose of such collaboration is to enhance the knowledge-sharing
between them, on which MDT remarked. Second, the new setup of the digital organiz-
ation works hand-in-hand with business organizations. It is a completely new structure
for such industrial organizations, where a newly formed support organization is
working closely with the business side, to provide digital competencies, although it has
some challenges, such as trust between the business and the digital people, different lea-
dership styles, and lack of understanding between them. GH, GBPM, VP, MDIT, VPIT, and
SMDT stated these challenges; however, all of them agree on recruiting external digital
experts and mixing them with business experts, to enhance digital transformation.
None of them think that only recruiting external digital experts or only training internally
for digital competencies is a good idea for digital transformation. VPIT put it, ‘our target
has been that we always will be together with the business (rather than starting our own
business initiatives).’ He further stated, ‘we work strongly together with the businesses …
because basically the business sets the demand (for digital competencies).’ Third, one of
the case organizations created a new position, ‘senior manager of digitalization,’ in order
to align different digital initiatives taken by different business segments. The purpose of
this new role was to eliminate the silos among the business segments and enhance their
collaboration on similar topics of digitalization, mentioned by SMD. He stated, ‘so I had
the task of taking up this cross-functional role to bring people together and break the
silos.’ VP also stressed the notion of eliminating the silos by stating that ‘we have
created acceleration centers where we are pulling people from different parts of the
organization to work together … because everyone tends to work in their silos because
of their profit-and-loss responsibilities.’ Similarly, GH stated, ‘what I see is a more colla-
borative model, a more cross-functional model, that takes relevant people from
different functions together and drives it is as an initiative.’
External collaboration consists of collaborating with external stakeholders, such as cus-
tomers, suppliers, and even the integration of newly acquired companies (digital-native
companies that brought new digital competencies to the case organizations). We have
already discussed collaboration with customers in the last section on ‘customer centricity.’
Therefore, in this section, we discuss it with respect to other external stakeholders. We
have identified three main streams of external collaboration in relation to structures.
First is ecosystem integration. CDO stated that ‘ecosystem thinking is looking at the
end-to-end value chain and asking ‘Where do we play a primary role?’’ Second is inte-
gration with suppliers. CDO explained, ‘our success depends on the partnership and col-
laboration of our customers and suppliers.’ Third, case organizations focused on
Figure 3. Structural elements to achieve performance outcomes.
acquisitions of ‘digital native companies, e.g. start-ups’ and emerged/collaborated with

them to build their digital competencies. SMD explained, ‘we’re looking into partnerships
because we don’t think that we can do all of it (digital transformation) ourselves. It’s also
an area where we are struggling a bit; we are not that fast at finding partners, but it’s
something we need to do more as a partnership and with acquisitions.’ VP stated that
‘we also work with external partners to actually sort of accelerate some of the stuff in
the beginning (of digital transformation).’
Figure 3 summarizes identified structural elements to achieve performance outcomes
for impactful digital transformation.
Culture
Culture is perceived as third enabler for the digital transformation of industrial organiz-
ations. This remains the most-mentioned word by the interviewees and shows the impor-
tance of cultural change for digital transformation. The incumbent organization’s digital
transformation programmes pay special attention to cultural change. For example, PM
stated that ‘it is disrupting our organizational culture.’ Similarly, SDT said, ‘digital trans-
formation has a huge impact on the company’s culture.’ GM stated, ‘the biggest
change happening now is cultural change and mindset change.’ Similarly, SPM explained,
‘the main thing is that the culture needs to be changed. It is not the development
resources, not the development projects that could be done differently, OK, there are
improvements in those as well, but it is the culture that needs to adapt as well.’
We have identified three main constructs of culture about which incumbent organiz-
ations are taking steps. First, case organizations are focusing on the development of new
values in their systems. These values include bringing agility to actions, openness toward
digital transformation, an experimentation culture, failing fast, co-creation and validations
with customers, sharing culture, feedback culture, coaching culture, taking ownership,
466 F. IMRAN ET AL.
empowerment, collaborative mindset, support for everyone, promoting innovation, and

ecosystem system thinking. Second, the development of new artefacts includes the devel-
opment of new formal and informal structures, digital learning platforms, digital inno-
vation platforms, utilization of robotic process automation, usage of artificial
intelligence, intranets for digital collaboration, learning management systems, internet
of things, big data and analytics, digital language, and celebrating failures. Third, we
identified some assumptions that case organizations intend to remove for impactful
digital transformation. These include that people are afraid of unknown possibilities of
digital transformation, digital transformation is a threat to personnel positions or jobs,
fear of asking customers, fear of making mistakes, and relying on past success.
Culture and Performance Outcomes

Agility: Initiating agility is one of the key tasks for cultural-change initiatives in incumbent
organizations. We found that 83% of participants gave their views on how cultural change
can create agility for the case organizations. We identified three different categories that
showcase organizations focusing on cultural change to increase agility. First, agility is one
of the most important topics of cultural change for digital transformation, as SMDT men-
tioned. The main reason behind it is that the case organizations had been operating on
waterfall-model bases, where things move very slowly. Now because of digital transform-
ation, they are moving toward agility, which requires massive change in their culture,
especially the ways of working. For example, MDT stated, ‘we need to have speed in
our actions in order to answer the expectations of a younger workforce.’ He further
said, ‘agility is one basic change in our way of working, as we have been a waterfall
company.’ SMDT explained, ‘I would say that’s the concept of how you work in an agile
way. I’m not talking about adopting any specific methodology of agility, but what
really are the principles of the agile way of working and being able to adopt them at a
certain level that makes sense for your organization is a must.’ We also found other par-
ticipants like VP, CDO (secondary data), GM, and GBPM, who stressed the need for change
in ways of working, to attain agility. Second, SPM raised the need for change in manage-
ment design to attain agility. He said, ‘It (challenge) seems to be the design of manage-
ment. They talk about rapid and agile delivery. The sad thing is that the culture needs to
be changed.’ Third, GM recommended adopting failing fast and customer-centric thinking
as the key to achieving agility. He said, ‘so, “fail fast” is one of the slogans … so try some-
thing and if it works, go for it. Otherwise, stop and involve the customer in that.’ We also
heard similar views from VPIT, who said,
Digital transformation is giving us a different playground that goes more like agile-based
trials, which means that you start to try something that would be valuable, and you have
to have a new way of doing to get over the business but, then, also be able to cancel and/
or reject the initiative if it seems that it is not going to be feasible to implement.
Customer Centricity: Similarly, bringing customer-centric thinking is another key task for
cultural change, required for digital transformation. Our data analysis showed that 92% of
the participants mentioned how cultural change can help in bringing customer centricity.
First, one of the main problems with industrial organizations is that they assume that they
already know what the customer’s problem is and what the solution should be. It is one of
the biggest assumptions that industrial organizations must correct. They must adopt the
customer’s validation culture, to be a genuinely customer-centric organization, as MDT
said. CDO shared similar views in an online interview: ‘This is a digital mindset, the
service-design approach, and it’s asking, “what are the end needs? Who is the customer
and what are their needs?”’ SMD stated that in an ideal culture for customer centricity, ‘we
would be working more from the outside in. We would be working with the customers on
creating solutions … we would have made proofs of concepts and gone out and tested
these things with customers.’ He further explained, ‘customer-centricity would be our
way of doing.’ Second, VP mentioned that they are trying to promote such a culture,
where people do not start any development without involving the customers upfront.
He said,
We are trying to promote such sort of mindset that whatever you do, you must involve cus-
tomer co-creation. Only then we can move from being a product-oriented company to being
a service-oriented company … this is a fundamental shift that we are looking to do with
digital transformation.
CDO also shares similar views that ‘co-creation and co-innovation will be a standard
process, and the new ways of working will show in everything we do, from sales to
manufacturing.’
Collaboration: Furthermore, enhancing collaboration among the internal stake-
holders, as well as with external stakeholders, is another key objective for cultural-
change initiatives in incumbent organizations. We found that all of the participants
stressed promoting collaborative culture for digital transformation. We identified
five different categories of such collaboration. The first is related to collaboration
with customers, already discussed in the last section, in the form of customer vali-
dation, customer co-creation, and customer-centric thinking. However, here is one
additional point on the usage of digital platforms to bring customers closer to the
case organizations. Case organizations are integrating customers’ systems with their
digital systems, as well as using different digital platforms to enhance this collabor-
ation. Second, case organizations are using different artefacts, such as intranets, inno-
vation applications, and digital-learning applications, to promote collaboration among
the internal stakeholders of the organizations. For example, SMDT said, ‘most learning
happens by doing and sharing and learning from others. So, in that sense, we are pro-
moting it from a learning-culture angle, I think that the collaboration platforms that I
mentioned earlier are helping in that way.’ Third, the last statement by SMDT also
shows that they are promoting a sharing culture in order to bring internal stake-
holders closer to each other. Fourth, one of the case organizations has recently devel-
oped a physical artefact, i.e. a new campus to which they are bringing all the
stakeholders (factory, lab, customers, suppliers, and academia) to co-locate and col-
laborate on R&D. Fifth, we identified one cultural problem in collaboration between
digital people and business people, namely, the usage of technical language. For
example, SMDT mentioned,
It is about using language that people understand and relate to, for example we talk about
‘agile,’ ‘RPA,’ etc. in digital transformation, and now the questions from people are, ‘Hey, what
language is this? What does it mean?’ There is risk as well in speaking a language that people
don’t connect with.
468 F. IMRAN ET AL.
Figure 4. Cultural elements to achieve performance outcomes.
Therefore, it is very important to use a language that is understandable for all. It also
requires a leadership role to make such language understandable for all by coaching
and mentoring them.
Figure 4 summarizes the key-focus elements of cultural change happening in the
incumbent organizations, to achieve performance outcomes.
Discussion
We identified leadership, structure, and culture as the main digital transformation
enablers in industrial organizations. According to our analysis, industrial organizations
require transformation involving these three enablers to ensure organization-wide
impact of digital transformation. The transformation of these three enablers leads indus-
trial organizations toward agility, customer centricity, and collaboration, the main per-
formance outcomes behind a digital transformation of these organizations. We discuss
each of these enablers and performance outcomes in following.
We reported that digital transformation often starts with the emerging new work roles
of leadership as they devise and implement a digital strategy in incumbent organizations
(Haffke et al., 2016; Horlacher et al., 2016). It is a leadership task to ensure that digital tech-
nologies are properly leveraged and aligned with the objectives of the organization (Hor-
lacher et al., 2016; Singh & Hess, 2017). Moreover, leaders have to ensure that the right
organizational structure and culture (Reck & Fliaster, 2019) exist in their organization to
align technical (digital technologies) and social systems (structure and culture)
(Mumford, 2000). Furthermore, leadership roles that lead to digital transformation must
be filled by leaders with the right set of competencies (Imran et al., 2018), who can
align technical and social systems by implementing the required changes (Higgins & Mcal-
laster, 2004; Mumford, 2000; Reck & Fliaster, 2019). Our study identified adaptability, the
right attitude, communication skills, data-driven decision-making, empowerment, failing
fast, experimentation, open-mindedness, risk-taking, trust, surface-level technical knowl-

edge, and vision as the most important leadership competencies. However, our results
show a mix of opinions on whether or not these competencies exist in incumbent organ-
izations’ leaders. As our participants are the ones who lead the digital initiatives, they
strongly believe that traditional leadership in industrial organizations is lacking most of
these competencies. Furthermore, we have identified links that how these emerging
work roles and set competencies can help industrial organizations in achieving the per-
formance outcomes. Based on this discussion, we propose the following.
Proposition 1: Developing identified leadership competencies facilitates the digital transform-
ation of industrial organisations and enables them to be more agile, customer-centric, and
collaborative.
Our research framework (Figure 5) reveals that organizational structure is another very
important enabler that aids and hinders the successful digital transformation of industrial
organizations (Gehrke et al., 2016). Since industrial organizations, such as incumbent
firms, have a long and successful history in the field of engineering and product develop-
ment, they have routines and processes that have been well-developed over the decades
(centralized structures) (Brown & Magill, 1994; Mumford, 2000) and are very hard to trans-
form. In this preview, organizational structure is one of the most rigid artefacts (Schein,
1985) in industrial organizations, which is very hard to transform. Our analysis shows
similar results as most of the interviewees mentioned that the digital transformation pro-
jects have not yet affected the traditional organizational structures. However, they under-
stand the importance of structures and the need for change.
Organizational structure has a major impact on the targeted performance outcomes
(found in our study) of digital transformation. If we analyse the concepts of agility, custo-
mer centricity and collaboration (Earley, 2014; Luokkanen-Rabetino et al., 2017; Smet
Figure 5. Research framework.

470 F. IMRAN ET AL.
et al., 2018; Vial, 2019), it requires structure with de-layered or flatter hierarchy, decentra-
lized power of command, less formulization and more cross-functional integration (Bern-
stein et al., 2016; Burton & Obel, 2018; Livijn, 2019; Mumford, 2000; Schwarzmüller et al.,
2018). Moreover, digital technologies can lead organizations toward both centralization
(by reinforcing classical power structures) and decentralization (as information
becomes more distributed) (Schwarzmüller et al., 2018). On one hand, this enables a
shift of power from legitimate profiles to those with expertise by identifying those with
the most knowledge in the field (Leonardi, 2007). On the other hand, digital technologies
allow increased managerial control and a strengthening of existing hierarchies by offering
computer-aided monitoring tools (Dewett & Jones, 2001; Schwarzmüller et al., 2018).
Therefore, structural changes must be planned very carefully for digital transformation
(Vial, 2019). In our analysis, we also found similar views from interviewees that the struc-
ture of incumbent firms must find a right balance between centralization and decentra-
lization. Based on this discussion, we propose the following.
Proposition 2: Flexible organisational structures (decentralisation, less formalisation, internal
and external integration) drive the digital transformation of industrial organisations and
enable them to achieve performance outcomes (agility, customer-centricity and
collaboration).
Last, our results identified organizational culture as an enabler that incumbent organ-
izations focus on the most for digital transformation. In the literature, culture is discussed
as an enabler of transformation (Scheibe & Gupta, 2017) and an obstacle regarding the
adoption of new digital technologies (Duerr et al., 2018; Hallikainen et al., 2017;
Shahzad, 2020). Impactful digital transformation is not possible without changing the
basis of the organization, which lies in its culture (Armenakis et al., 2011; Nambisan
et al., 2017; Westerman et al., 2014). Additionally, industrial organizations develop their
own culture over a long period of time, which is often very slow to change (Vincenti,
1993). Therefore, our results identified a special focus on cultural change in the incumbent
industrial organizations. Organizational culture provides unwritten and unspoken rules
for how to cope in the organization (Duerr et al., 2018). Schein (1985) divided culture
into three sub-parts: artefacts, beliefs and values, and assumptions. The artefact is the
most visible aspect of the culture, e.g. new digital tools and technologies or organiz-
ational structures (Schein, 1985). In our analysis, we identified that digital technologies
and tools (artificial intelligence, robotic process innovation, intranet, in-house innovation
applications, collaborative tools, e.g. Skype) are being implemented, which shows that the
artefacts are visibly changed in the incumbent organizations. On the other hand, struc-
tures are still not changed formally. Beliefs and values are one of the most important
parts of transformation, because even the best-designed digital strategy may fail if the
organization’s values do not embrace the transformation (Duerr et al., 2018). Therefore,
we see the main focus on value change in the digital transformation projects of incum-
bent firms, e.g. developing a failing fast mind-set to promote experimental culture, cus-
tomer co-creation to enhance customer centricity and sharing culture to enhance
internal collaboration and agility. Based on this discussion, we propose the following.
Proposition 3: Cultural aspects of values, assumptions, and artefacts underpin digital trans-
formation to achieve performance outcomes (agility, customer centricity and collaboration)
in industrial organisations.
Unlike the extant research that concentrates on technology adoption in digital trans-
formations (Li, 2020), our analysis shows that the combination of leadership with the right
set of competencies, changes in traditional organizational structures and refreshed organ-
izational culture can lead industrial organizations to an impactful digital transformation
by achieving performance outcomes i.e. agility, customer centricity and collaboration.
Digital transformation enables close collaboration between the organization and its sta-
keholders (internal and external) by using advanced digital technologies, e.g. digital plat-
forms (Klötzer & Pflaum, 2017). In addition, it helps organizations to involve customers in
product development and concept development phases (also known as co-creation or co-
innovation) (Lucas et al., 2013), which enhances customer centricity. Moreover, agility is
another important performance outcome that industrial organizations target to
compete in this fast-changing digital world (Vial, 2019).
This study examined the ongoing digital transformation of incumbent firms, which are
hard-core engineering organizations with a history of over 70 years, and which we refer to
as industrial organizations. To explain this digital context, we have drawn on sociotechni-
cal system theory (STS). STS theory advocates that organizations need to consider techni-
cal and social factors to promote any transformation (whether it concerns the
introduction of new technology or a business change programme) (Cherns, 1976).
Davis et al. (2014) consider organizations to be complex systems, which comprise many
interdependent factors that enable or disable digital transformation. Therefore, bringing
a change to one part of such a system triggers the need for change in other interrelated
parts. We have found such evidences in our results as well, where making the changes in
one part of any construct lead towards changes in other parts too. Because digital trans-
formation starts with the implementation of new digital technologies (Gilchrist, 2016),
consequently, this requires changes in the social part of industrial organizations that
we have strongly observed in incumbent organizations.
In STS, the social and technical elements must work together to accomplish organiz-
ational goals, and the key issue here is to design change in such a way that both parts
yield positive outcomes, called ‘joint optimization’ (Appelbaum, 1997; Di Maio, 2014).
Our results demonstrate that the identified dimensions of enablers, i.e. leadership, struc-
tures, and culture, are jointly optimizing in order to achieve the performance outcomes
for impactful digital transformation. The joint optimization within the social elements is
happening due to the introduction of new digital technologies in the organization.
Figure 5 presents this whole phenomenon, where the implementation of new digital
technologies (technical systems) is integrating with social systems (leadership, structure,
and culture). The social system is jointly optimizing within itself as well, and this whole
interaction is leading toward common goals, i.e. performance outcomes (agility, customer
centricity, and collaboration). We found that most of the identified constructs (in social
systems) are interlinked with each other, which creates such scenarios that making
changes/updates in one construct, lead toward changes in others as well, hence,
leading our framework (Figure 5) towards joint optimization. For example, if leadership
is developing its competency of empowerment, it inevitably leads toward less hierarchical
approaches, a more goal-oriented approach, and a more open culture. Similarly, if leader-
ship is playing the role of promoting collaboration in the organization, it requires making
changes in the hierarchy to break silos, as well as promote openness so that people can
collaborate on common topics. Therefore, based on our results, all three constructs of
472 F. IMRAN ET AL.
leadership, structure, and culture overlap with each other during organizational-change
processes in many aspects, resulting in joint optimization of digital-transformation
enablers. Figure 5 summarizes the research framework for this study.
Implications
Theoretical Implication
The findings of this study extend the extant research into digital transformation and
sociotechnical system theory in a number of ways. First, the study introduces a sociotech-
nical systems perspective on the understanding of digital transformation, which aligns
with a call for the application of STS theory in new domains (Davis et al., 2014). Such a
perspective provides the digital transformation literature with a holistic viewpoint on
the most important social elements (enablers) that need attention in order to achieve per-
formance outcomes. Second, past literature on STS theory has highlighted that the critical
system failures occur for ‘non-technical’ reasons (Di Maio, 2014). Therefore, our research
sheds light on the most critical social elements (non-technical), namely leadership, struc-
tures and culture, the kind of changes/updates required in these elements and how such
changes can lead industrial organizations toward impactful digital transformation. Third,
we have further explained how social elements are jointly optimized within themselves,
leading digital transformation journeys of industrial organizations toward common goals,
expressively contributing to the STS literature from a joint-optimization point of view
(Appelbaum, 1997; Di Maio, 2014). Fourth, our study also contributes to the body of litera-
ture on leadership (Vial, 2019), structures (Matt et al., 2015), and culture (Imgrund et al.,
2018), by explaining what kinds of changes these elements require in relation to the
digital transformation of industrial organizations. Fifth, we explained in detail that how
each enabler (leadership, structures and culture) is interlinked and impacting identified
performance outcomes, (agility, customer centricity, and collaboration). Lastly, we have
significantly contributed to the digital transformation (Sony & Naik, 2020; Vial, 2019;
Warner & Wäger, 2019) and organizational change-management literature, by providing
a holistic research framework and future research propositions.
Managerial Implications
This study has several important managerial implications. First, it guides practitioners to
the realization that the digital transformation should not be managed as an isolated tech-
nical project. As a variety of technical and social activities enable the contributions of the
advanced digital technologies, it is critical to align and jointly optimize their social and
technical systems to effectively capitalize on the digital-transformation initiatives.
Second, we have learned from the literature that engineers or technical leaders, trained
and rewarded for technical excellence, are frequently frustrated with ‘social design con-
straints’ (Di Maio, 2014) and, hence, can ignore the social part while implementing new
digital technologies. Such tunnel vision can lead digital transformation to failure (Di
Maio, 2014). Therefore, this study warns practitioners against ignoring the social elements
and encourages them to utilize sociotechnical thinking while planning and implementing
digital-transformation strategies. Third, this study specifies the most important social
elements (leadership, structure, and culture) that need special attention from digital trans-
formation practitioners while planning this change. Moreover, this study explains in detail
how these social elements can contribute to attaining performance outcomes (agility,
customer centricity, and collaboration) for impactful digital transformation.
Fourth, findings also emphasize the important role of organizational leadership in this
change. Therefore, we call urgent attention to the development of leaders, as well as the
further identification of digital transformation-supporting leadership competencies. Com-
petent leaders assume a central role in correcting outdated and invalid assumptions, con-
ceptualizing new ideas, and reinforcing cultural values. Lastly, the findings also illuminate
the reality check regarding abundantly applied inflexible approaches to structuring indus-
trial organizations. Our findings confirm the significance of organizational structure in
digital transformation and simultaneously warn that too little is happening in this dimen-
sion of digital transformation. To reap the benefits of digital-technology-enabled trans-
formation, practitioners must transform organizational structures accordingly.
Limitations and Further Research

It is important to also note the study’s limitations. First, the study only captured scenarios
from large, multinational, hard-core engineering organizations, which must be considered
when seeking to transfer the findings to other types of organizations. Moreover, these
findings should not be considered exhaustive, and the inclusion of other organizations
may reveal further contributions. Second, the choice of method also has inherent limit-
ations. Although the study mostly relied on high-profile interviewees to provide a rich
perspective, more interviews could have further expanded the findings. Third, while
the data was analysed, significant time was spent in consolidating the interpretations
of the data; other researchers might have drawn additional conclusions. Fourth, STS
theory is often labelled as a simplistic and prescriptive approach to studying organiz-
ational change. Therefore, we encourage future researchers to use empirically grounded
studies and descriptive results based on an in-depth case study, multiple cases, and/or
survey design (Scacchi, 2004). Furthermore, we call for further studies that investigate
questions regarding leadership, structure, culture, performance outcomes, and the
relationships between these constructs in the context of digital transformation, by
employing more case companies and a larger sample of participants. Sixth, our study pro-
vides an important opportunity for future research by stating propositions based on the
findings of this study. Lastly, future research should also focus on cross-case analysis to
find the differences between unlike digital journeys of organizations.
Conclusion
This study presents a multiple-case study of four industrial organizations, exploring how
industrial organizations are organizing and managing their digital-transformation jour-
neys. The findings shed light on the most important social elements (leadership, structure,
and culture) that play a key role in the digital transformation of incumbent organizations.
The findings provide more insights into how each identified social element plays its role in
achieving performance outcomes (agility, customer centricity, and collaboration) for
impactful digital transformation. Moreover, this study stresses the need for sociotechnical
474 F. IMRAN ET AL.
system thinking while implementing digital transformation strategies. It highlights how

the joint optimization of each identified social element can help incumbent organizations
achieve common goals. Last but not least, this study provides a holistic framework that
will guide researchers, practitioners, and industrial organizations on how to embark on
their digital transformation journeys.
Disclosure Statement
No potential conflict of interest was reported by the author(s).
Funding
This research is part of BizPub project supported by Liikesivistysrahasto under grant number
200264.
Notes on Contributors
Faisal Imran is doctoral student at School of Technology and Innovation, University of Vaasa,
Finland. He obtained his MSc in Industrial Management from University of Vaasa. His research
interests are broadly within the field of management, and he is particularly interested in the
areas of organizational transformation, change management, technology impact on organiz-
ations, digitalization, digital transformation, industrial organizations, organizational leadership,
personnel competencies, organizational structures, organizational culture and qualitative research
methodology.
Khuram Shahzad D.Sc. (Econ. & Bus. Adm.), is currently working as Assistant Professor (Tenure-
track) at the School of Technology and Innovations, Production associated with Innovation and
Entrepreneurship InnoLab research platform at University of Vaasa. Dr Shahzad holds a PhD
degree in Industrial Management with a proven record of conducting and publishing multidisci-
plinary research. His current research focuses on areas such as digital innovation management,
change management in digital age and open innovation, blockchain technology, entrepreneurial
ecosystem, digital servitization and triple/quadraple-helix based on both qualitative and quanti-
tative approaches. He’s been involved in leading and participating in several research projects
around these topics. His research has been published in several journals and books of inter-
national repute. In addition to that, Dr Shahzad is also very active member participating in
regional ecosystem activities including stakeholder engagement, learning/world café, hackathons,
seminars etc.
Aurangzeab F. Butt is post-doctoral researcher at the School of Technology and Innovations, Uni-
versity of Vaasa. Aurangzeab holds BSc. Mechanical Engineering from UET Lahore Pakistan, and
Master’s and PhD in Industrial Management from University of Vaasa Finland. Industrial organiz-
ations, systems theory, strategic configurations, learning organization, and project management
are the main areas of his research interest.
Jussi Kantola is professor, mechanical engineering, at University of Turku, Finland, and visiting pro-
fessor at Poznan University of technology, Poland. He has MSc in production engineering at
Tampere University of Technology (1996), and PhD in industrial engineering at University of Louis-
ville, US (1998) as well as PhD in industrial management and engineering at Tampere university of
technology, Finland (2006). Earlier he was professor, industrial management, at University of Vaasa,
Finland (2012–2020) and associate professor, Knowledge service engineering at KAIST, Korea (2009–
2012). He has almost 200 publications. His research interests include resource modelling and human
systems integration.
ORCID
Faisal Imran http://orcid.org/0000-0001-7414-6625
Khuram Shahzad http://orcid.org/0000-0002-6452-0879
Jussi Kantola http://orcid.org/0000-0001-8660-9068
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Journal of Change Management

Reframing Leadership and Organizational Practice

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Digital Transformation of Industrial Organizations:

Faisal Imran, Khuram Shahzad, Aurangzeab Butt & Jussi Kantola

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Published online: 20 May 2021.

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Digital Transformation of Industrial Organizations: Toward an

CONTACT Faisal Imran ﬁmran@uva.ﬁ

Digital Transformation and Sociotechnical System Theory

to be a comprehensive theoretical stance to studying digital transformation (Mitki et al.,

Table 1. Details of case organizations.

Table 2. Interviewees’ designation and codes.

Figure 1. Conceptualization of digital transformation in cases (interview based).

Leadership and Performance Outcomes

Figure 2. Leadership roles and competencies to achieve performance outcomes.

keeps track of their digital-transformation initiatives, providing digital support as well.

Structure and Performance Outcomes

Figure 3. Structural elements to achieve performance outcomes.

acquisitions of ‘digital native companies, e.g. start-ups’ and emerged/collaborated with

empowerment, collaborative mindset, support for everyone, promoting innovation, and

Culture and Performance Outcomes

Figure 4. Cultural elements to achieve performance outcomes.

fast, experimentation, open-mindedness, risk-taking, trust, surface-level technical knowl-

Figure 5. Research framework.

Limitations and Further Research

system thinking while implementing digital transformation strategies. It highlights how

Mumford, E. (2000). A socio-technical approach to systems design. Requirements Engineering, 5(2),

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