The middle is where it breaks
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Audio overview generated with Google NotebookLM. Article written by Rick Cheever.
Mid-market private businesses are over-titled and under-led, and the current environment is making it worse fast.
Most of the businesses I work with aren’t startups. They aren’t Fortune 500 either. They sit in the middle — past the founder-hustle stage, before the corporate-machinery stage. The founders’ tools (hustle, gut, personal credibility) stopped scaling around employee 50. The corporate playbook doesn’t apply yet, because there isn’t the bench depth to run it. And the operating realities have all shifted at once.
Three pressures showing up in nearly every diagnostic I run right now.
1. Talent is non-negotiable, and the comp math doesn’t work
The senior operator a mid-market business really needs can probably command a salary that doesn’t easily fit into the current P&L. Five years ago, owners could grow into that hire. Now they have to make the math work today — because if they delay, the role they needed to fill last year is the role costing them the most this year.
One owner I worked with had three senior operations roles open for over a year. He couldn’t justify paying what the market demanded. By the time he made one hire, the cost of NOT having that person in the seat had already doubled what the salary would have been. He was paying market price either way — once visible, once invisible.
What’s working in the businesses navigating this well: hire fewer, better, more senior people. Give them genuine ownership of outcomes — sometimes equity. Mid-market businesses are over-titled and under-led. The fix isn’t a bigger headcount. It’s a tighter, more accountable one.
Worth referencing: BLS wage data on senior operations roles by region — the divergence between regions is widening, and it matters for where companies hire from.
2. AI is rewriting unit economics — and most teams are arguing about the wrong question
The question isn’t “should we adopt AI.” Of course they should. The question is which two or three places in the business will the cost-to-serve shift the most in the next 18 months — and how does the company reorganize around that shift before competitors do.
In customer support, the answer can be a 55–60% reduction in human handle time within twelve months. In sales, it can be tripling the meaningful conversations a single rep can have. In finance, it can be closing the books in three days instead of fifteen. These aren’t future-state speculations. They’re happening right now in mid-market businesses making the call a year ahead of the laggards.
One company I’m working with mapped AI specifically to their customer support function and found a 55% handle-time reduction was achievable in eighteen months. Their competitors were still in committee about whether to “explore AI.” When customer expectations shifted six months later, the gap was already permanent.
Teams still debating whether to “explore AI” are behind. Companies with one pilot are starting. Businesses with a roadmap mapping AI to unit economics across each part of the company are in front of the curve.
Worth referencing: McKinsey’s most recent reporting on AI productivity gains by function — the variance by industry is the real story.
3. The owner role is breaking under the load
Twenty years ago, a private business owner could be deep in the work and still see the whole field. Today there are six fields, all moving at once: capital markets, talent, AI, regulatory, customer expectations, operational complexity. No single person can hold all of that and still operate inside the business.
I worked with an owner who spent roughly 80% of his time in operations — because that’s how he built the company over twenty years. We redesigned his week over a quarter. He now spends 60% on the future of the business (capital allocation, senior talent, market position, AI roadmap) and only 40% on the current quarter. His operations have improved, not declined, because the senior team finally has the clarity and authority to own the day-to-day.
The owners thriving in this environment have done one of two things: built a true second-in-command who runs operations day-to-day, or redesigned their week so the majority of their time is on the future of the business.
The ones struggling are still doing it the way they did it ten years ago. The work has changed. The pace has changed. The risks have changed. The role has to change too.
For owners in the middle and feeling the squeeze, the right move probably isn’t a more aggressive growth plan or another layer of management. It’s getting clear about which of these three pressures is most expensive for the specific business right now.
The answer to that question is usually obvious within the first hour of an honest diagnostic.
— Rick
