Digital transformation in SMEs has become a necessity in the Industrial Revolution 4.0 era. ASEAN Economic Community will
be more established if SMEs are able to take the benefit of information technology advancement in its business process. This research
aims to test the role of agile leadership and strategic flexibility to improve digital transformation in SMEs among ASEAN
countries. The data from this research were from 539 SMEs in Indonesia and Malaysia as representatives of ASEAN community
and tested using Smart PLS 3. A total of 519 usable surveys were collected. Data testing results showed that agile leadership becomes
the key to success in implementing digital transformation. Moreover the strategic flexibility, which comes from workforce
transformation and dynamic capability, is also the determining factor in the creation of digital transformation in SMEs. The fast
response of the leader followed by strategy flexibility, play a significant role to the success of digital transformation implementation.

keyword: Agile leadership, Strategic flexibility, Digital transformation, Workforce transformation, SMEs