Digital transformation has emerged as a fundamental strategic imperative reshaping organizational structures, processes, and competitive dynamics. This study develops a strategic framework that explains how leadership-driven digital transformation influences organizational capability development and performance enhancement. Drawing on a synthesis of strategic leadership theory, dynamic capabilities, and digital transformation literature, the paper conceptualizes leadership as the central orchestrator of digital change, enabling capability building and performance outcomes through strategic alignment, technological integration, and organizational agility. The study adopts a conceptual research methodology based on systematic literature synthesis and theoretical integration of 39 peer-reviewed and industry sources. Findings suggest that digital leadership significantly enhances organizational adaptability by fostering innovation capability, data-driven decision-making, and ecosystem collaboration. However, leadership effectiveness is contingent on digital competencies, organizational culture, and strategic alignment mechanisms. The study further highlights the mediating role of dynamic capabilities in translating leadership actions into performance gains. The paper contributes to theory by integrating leadership and digital transformation into a unified framework and offers practical insights for executives navigating complex digital ecosystems. Limitations and future research directions are also discussed.