Managing digitization of industrial incumbents through innovation-oriented leadership

Industrial incumbents aim to foster their digitization by applying digital technologies in their innovation activities, either through process optimizations or via business model innovations. While firms agree on the importance of these digital innovation activities, they often struggle with implementing effective means to tackle it. We show the important role of innovation-oriented leadership in driving internal and external collaborations, which in turn prove essential to increase the digitization contribution to innovation activities. We surveyed top managers of established industrial companies to provide empirical evidence that innovation-oriented leadership does not have a direct influence on the digitization contribution to innovation activities, but is fully mediated by the impact of internal and external collaborations. Based on supplemental objective data, we show additionally that a high digitization contribution in business model innovation has a beneficial effect on firms' sales performance.