New research from the National Center for the Middle Market (NCMM), in collaboration with CBIZ, finds that while middle-market companies consistently prioritize growth, most leaders ultimately choose profitability when forced to make difficult tradeoffs — highlighting the balancing act firms face in today’s “trade-off economy.”
The study, based on a survey of 400 U.S. middle-market executives, reveals that performance differences across companies are driven not only by economic conditions or industry dynamics, but by how leaders make strategic decisions under pressure. Researchers identified four distinct decision-making mindsets shaping how organizations approach growth, cost management, innovation and risk.
“Middle-market companies are operating in an environment defined by competing priorities,” said NCMM Executive Director Doug Farren. “This research shows that outcomes are increasingly shaped by how leaders balance those priorities — not just by the opportunities available to them.”
Key findings from the research include:
- Innovation-driven firms outperform peers. Companies with innovation-oriented leadership approaches report stronger performance across key indicators. Among these firms, 51% achieved revenue growth of 10% or more in the past year, and nearly seven in 10 expanded their workforce.
- Automation and process investment are strongly tied to growth. High-growth companies are more than twice as likely as slower-growing peers to report significant efficiency gains from automation or process improvement (45% versus 17%), underscoring the role of technology investment in scaling operations.
- Growth drives strategy — but profitability often wins in practice. While growth opportunities are the most influential factor in strategic decision-making, more companies overall say they would prioritize profitability when forced to choose between the two.
- Customer experience is protected, while innovation investment is more vulnerable. When facing cost pressure, 49% of leaders say they would protect customer experience, while 53% say they would reduce investment in research, development, or innovation — signaling a tilt toward near-term stability over long-term capability building.
- Efficiency investments are now table stakes. Nearly nine in 10 middle market companies report achieving efficiency gains through automation or process improvements, though the magnitude of those gains varies widely across firms.
“Understanding how midsized company leaders make tradeoffs is critical to understanding performance,” said Jay Anand, professor of strategy at The Ohio State University Max M. Fisher College of Business. “Companies that align their decisions to long-term value creation appear better positioned to navigate uncertainty and sustain growth.”
Access the full report: The Trade-Off Economy: How Middle Market Leaders Navigate Competing Priorities.
The research was conducted in December 2025 through a survey of executives from companies with annual revenues between $10 million and $1 billion across construction, real estate, and consumer and industrial products sectors. In collaboration with CBIZ, a full-service professional services advisor in 22 major markets, the study was designed with input from faculty at Fisher College of Business and subject matter experts from industry and advisory organizations.
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