Building organizational resilience in SMEs: the key role of digital technologies, transformational leadership, and innovation

Abstract In today’s complex economic environment, resilience is a strategic factor that enables businesses to adapt to external changes, undertake in transformative activities and emerge stronger from challenging situations. Although it has therefore become vital for businesses, there is a lack of empirical studies analyzing the main variables that drive resilience-building and performance in the context of SMEs. This is particularly relevant, as these firms play a crucial role in the economy, but sometimes find it difficult to adapt quickly to sudden disruptions by updating their business operations. This article empirically examines the impact of digital technologies, transformational leadership and innovation capability as decisive determinants of organizational resilience development in SMEs. Adopting a dynamic capabilities’ approach, this quantitative study analyzes a sample of 206 SMEs operating in Spain and tests its hypotheses using Structural Equation Modelling. Results show that transformation leadership and the use of digital technologies play a key role in fostering organizational resilience, and have been identified as core drivers. Findings also emphasize the crucial relevance of SMEs’ innovation capability in this process. Resilience is emerging as a critical dynamic capability for anticipating change and managing disruptive events, as it has been proven to enhance business performance directly. The findings have important implications for scholars and managers alike, showing firms how to become more resilient by implementing digital technologies and effective leadership to foster innovation and create business value in the current uncertain landscape.