The post-pandemic age has heightened the importance of digitalizing organizational practices and fostering innovation for SMEs to ensure resilient business operations in a volatile work environment. This research paper examines the impact of digital transformation leadership on the digitalization of business practices and the development of innovative business models while considering the roles of organizational agility and knowledge transfer. A survey of 270 employees from SMEs in Lebanon was conducted using the convenience sampling technique. Data analysis was performed quantitatively through Partial Least Squares—Structural Equation Modeling (PLS-SEM). The results reveal that adopting digital transformation leadership fosters organizational agility, enabling effective digital transformation and business model innovation with a robust knowledge transfer system. This study contributes to the fields of digital transformation and innovation, and offers practical insights for SME managers navigating uncertainties and market volatility in the post-pandemic period.
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