•Does digital leadership capability enable companies to innovate?•Digital leadership and platform digitization as two critical IT capabilities.•Mixed-methods approach: A multiple case study of 10 European companies.•A quantitative study on a sample of 117 European firms.•Digital leadership improves innovation by digitalizing the firm's platform. Following a mixed-methods approach, we theorized that digital leadership influences innovation performance by digitalizing the firm's platform. A multiple case study of ten companies was deployed to derive a theoretical model relating digital leadership and innovation performance. The resulting model was empirically tested on a sample of 117 European firms. We find that digital leadership improves a firm's innovation performance by digitalizing the firm's platform. We contribute to IS research by theoretically developing the concepts of digital leadership capability and platform digitization capability and empirically analyzing the relationship of these two critical IT capabilities and their impact on innovation performance.