Digital Transformation or Stagnation – How Mid-Market Boards Drive Innovation

Introduction

Mid-sized companies face mounting pressure to keep pace with digital transformation. Yet many remain stuck in limbo—adopting technology in pockets while struggling to drive enterprise-wide innovation. For boards, this is not just an operational issue—it’s a strategic imperative. A board that ignores digital maturity is gambling with relevance.

Why Mid-Market Companies Lag

Research shows that over half of digital transformation initiatives in mid-sized firms stall due to: 

- Lack of leadership alignment 

- Insufficient digital talent 

- Poor change management 

- Fragmented technology choices

Boards often defer to management on digital issues. But as tech becomes core to every function—from finance to customer experience—boardroom involvement must deepen.

Technology and particularly AI is defining the future of work, boards have to get alignment on this and take accountability, depending on a boards approach it can be a commodity efficiency driver or a source of competitive advantage.  Those who decide to grasp the topic and drive a business driven strategy around AI will have a huge opportunity, others I suspect may need to prepare for a crisis.

What Digital Transformation Looks Like

Digital transformation is not about buying tools. It’s about:

- Automating core workflows to boost efficiency

- Using data for real-time decision-making

- Reimagining products and services for digital delivery

- Embedding AI to scale capabilities without scaling headcount

Boards must shift from asking, "What tech are we buying?" to "How does digital create value?"

The Board’s Role in Breaking the Stalemate

1. Set a Clear North Star 

Digital transformation should be tied to a strategic goal—growth, margin, or resilience. Without this clarity, tech becomes cost, not value.  Boards must also recognize and pit in place measures to be able to focus on the value generation, not just the cost and they must invest for the long term.

2. Sponsor Cultural Change 

A digital mindset starts at the top. Boards must model curiosity, reward experimentation, and demand cross-functional thinking. They must also drive all layers of the organization to start to think differently about their business, and give them space to do so.

3. Ensure Accountability 

Digital KPIs/OKR’s should be tracked like financial ones. Boards should expect reporting on adoption, enablement, and ROI.  To do this boards must drive the creation of new frameworks to measure these things, and build them into bonus structures.  This is not an incremental shift, it needs to be done now.

4. Invest in Skills and Talent 

Transformation fails without the right people. Boards should probe whether internal teams have the tools and training they need—and if not, how gaps are being filled.  Further, they need to consider carefully whether they have an operating model that will enable the transformation, and boards should be aware this might lead to some difficult decisions in the executive layers.

5. Bring in the Right Expertise 

Consider adding tech-savvy NEDs or fractional advisors who can challenge assumptions and help management build digital roadmaps, these roles with oversight and challenge responsibility coupled with supportive capabilities should drive boards and executives to face up to the tough challenges required to make this work.

What Good Looks Like

High-performing mid-market companies:

- Treat digital as a board-level topic

- Align transformation with strategy

- Invest in people as much as platforms

- Manage transformation as a portfolio, not a project

- Build muscle memory through cycles of experimentation

About the Author

Chris Bannocks advises boards and private equity-backed businesses on digital and data transformation. He helps companies turn data and tech into lasting strategic advantage.

To explore how your board can steer successful digital transformation, book a conversation here