A 5-Part Framework for Middle-Market Digital Transformation


The biggest takeaway is that companies must get comfortable investing big into talent and expertise. These investments prioritize people over tools and set companies up to initiate digital transformation strategies that work.

Everyone is talking about digital transformation thanks to global disruption from the pandemic. Companies are easing back into business as usual, but with a wary eye. Digital transformation efforts may have been slow or inconsistent before Covid-19, but now, they’re a necessity.

So how is everyone faring with transformation? What’s changed in the 18 months since massive shutdowns interrupted everything from the toilet paper supply chain to restaurant survival? And what’s the framework for implementing digital transformation in middle markets? Harvard Business Review has some answers.

Companies are coming back, but permanently changed

According to the National Center for the Middle Market, economic growth was at 8% between June 2020 to June 2021—that’s slightly higher than previous average growth rates pre-pandemic. However, this growth is far from evenly distributed.

45% of companies experienced even higher growth than that 8%, but another 35% skewed results by flatlining or declining during that period. To help recovery efforts, we’ll need to determine what separated those experiencing 10% growth rates or more from those who struggled.

We’ll give you a hint—it’s effective digital transformation.

Companies that shifted investment priorities into digital technologies for customer management and engagement, as well as internal communications and productivity, experienced higher than average growth rates once those changes went live.

See also: How No-Code Platforms Are Helping SMBs Go Fully Digital

Building a digital transformation roadmap could be the key to success

Investment in tools doesn’t hold a magic key to weathering disruption. Companies need a digital roadmap for adoption, implementation, and company-wide culture shifts. Middle-market companies with a clear and strategic digital vision grow much faster than their peer companies.

The NCMM’s framework is designed to help middle-market executives bridge the gap between having a clear digital vision and possessing skilled employees and managers to implement it. It consists of five distinct components:

  1. What We Sell – product and service offerings
  2. How We Produce It – supply chain, manufacturing, operations
  3. How We Sell It – customer experience, channels, marketing
  4. Our IT Backbone – infrastructure, security
  5. Our Workforce – talent, digital skills

Each component informs “Our Enterprise,” or the company’s business model, strategy, and value drivers.

While each component provides vital support to middle-market companies, two in particular address the massive changes wrought by Covid-19—customer engagement and employee engagement.

Addressing people first—Customers and employees

HBR identified these two components as the most pressing challenges for middle-market companies reentering the economy during “the great resignation.” For most, digital transformation efforts should address customer engagement and workforce engagement equally in order to succeed.

Finding—and keeping—workforce talent

Middle-market companies must meet the challenge of competing with large, mainly tech organizations to find digital talent. Underneath that umbrella, overall company strategies to boost employee morale and keep them changed dramatically during the shutdown.

No matter the pandemic, changes were on the way, but disruption dramatically accelerated company efforts to reassess investments in employee growth and nurturing. Based on NCMM’s framework and study, HBR believes that companies should:

  • Fully invest in digital expertise and remain willing to pay top dollar for those skills. Reallocating budgets to match talent investments from large companies like those at FAANG (Facebook, Amazon, Apple, Netflix, Google) brings serious ROI later on. No more hesitation.
  • Adopt digital processes and technologies that move the needle, not just for customer engagement but for employee growth, performance management, and goal setting. These technologies should put employees in the driver’s seat without implementing “big brother” approaches.
  • Fully invest in career training, in-house vertical and lateral movement, and career development. Employees won’t stay at a company with no professional growth opportunities, and this could soon be a critical differentiator for middle-market companies in cut-throat talent acquisition.
  • Look at workforce alignment strategically. What skills can companies develop in-house versus what can be outsourced efficiently? The balance lies in allowing employees to grow without burdening teams.

Supporting employees provides a foundation for ensuring customer success efforts don’t go awry.

Engaging customers in a crowded online space

Customer experience and lead generation remain top priorities. Middle-market companies also need efficient digital marketing tools that integrate the full scope of data insights. Best practices for integrating these components include:

  • Finding the right balance of offline and online marketing channels, including a multi-channel or omnichannel strategy.
  • Invest in functional, data-driven websites that connect potential and returning customers to the products and services they need. Websites should also direct customers to company resources—whether human or artificial—to answer questions and address complaints.
  • Increase online interaction with customers using a strategic plan of engagement.
  • Embrace the wealth of analytics tools available to companies of this size and craft digital experiences, not just an online presence.
  • Integrate CRM systems that support employee efforts to engage with customers and reduce the mundane workload
  • View the end goal as an end-to-end, omnichannel digital experience.

Fostering digital transformation success on all fronts

Digital transformation will bring middle-market companies out of disruption. It can offer solutions to obstacles present before the disruption and directly caused by it. Companies need a digital vision, and this framework could facilitate adoption and bridge the gap between companies experiencing growth and companies on the verge of extinction.

The biggest takeaway is that companies must get comfortable investing big into talent and expertise, whether in-house hires or third-party investments. These investments prioritize people over tools and set companies up to initiate digital transformation strategies that work. It’s a formula for success in the post-pandemic world.

Elizabeth Wallace

About Elizabeth Wallace

Elizabeth Wallace is a Nashville-based freelance writer with a soft spot for data science and AI and a background in linguistics. She spent 13 years teaching language in higher ed and now helps startups and other organizations explain - clearly - what it is they do.

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