At Eastern Bank, we've long understood the role of middle market companies¹ in ensuring a thriving economy, and supporting them to stay ahead of the curve is where we look to help. These organizations drive innovation, create meaningful employment and contribute to the fabric of our communities. To better understand their business priorities and offer insights on building for their future, we recently surveyed an anonymous group of more than 125 middle market leaders across New England.

The results paint a clear picture. Three interconnected challenges define competitive advantage in 2026 and beyond: succession planning, evolving trade policies and AI investment. We believe companies that proactively address these challenges will be better positioned to maintain strong margins, mitigate operational risks and capture growth opportunities. Those that delay may face pressure on profitability, vulnerability to disruption and missed market growth.

A summary of key insights follows below.

Succession Planning

The good news is these New England middle market companies take succession planning seriously. We found 85% of survey respondents have formal plans in place, reflecting a critical and forward-thinking leadership approach. But beneath this lies a more nuanced picture. When asked about specific strategies, companies report a varied toolkit: phased leadership handovers are the most popular, used by 58% of respondents, while 47% engage external advisory boards, 41% pursue strategic partner sales, and 39% establish ESOPs (Employee Stock Ownership Plans). This range reflects the reality that there is no one-size-fits-all approach.

However, having a plan is different from being prepared to execute it. Concerns cited by leaders reveal important vulnerabilities: they worry about cultural continuity and employee stability. This signals that while succession planning frameworks are in place, leaders recognize the need for deeper guidance on navigating the operational and human dimensions of transitions.

Greg Buscone, Executive Vice President, Chief Commercial Banking Officer of Eastern Bank, suggests this consideration: “Engage your commercial banker, attorney, CPA and other valued advisors early in the succession planning process. The goal should extend beyond transferring ownership to preserving what makes your business valuable: the people and employees who drive it, the relationships that sustain it, the operational standards that define it, and the communities connected to it.”

Trade Policy & Supply Chain Resilience

The research revealed an interesting tension. Ninety-eight percent of respondents reported confidence in their ability to navigate global trade policies. Yet for many, operational performance and customer satisfaction have been impacted by supply agreement uncertainty, material shortages and price volatility. This disconnect reveals an important truth: confidence and resilience are not the same. But we believe New England companies are making deliberate efforts to build resilience by adjusting strategies: two-thirds of respondents (66%) have shifted toward diversified sourcing, 52% have invested in trade finance solutions and 52% are expanding relationships with domestic suppliers.

These are sound strategies for risk mitigation, but even diversified companies are exposed to disruption. Today, trade policy uncertainty is not a temporary challenge – and it is likely to intensify in 2026 and beyond. This means companies should continuously monitor supply chains, maintain collaborative relationships with a range of suppliers, and remain agile enough to pivot when disruptions occur.

The AI Paradox

AI adoption rates are high for the New England middle market companies surveyed, and they are seeing the benefits. Leaders report that implementing AI systems improves accuracy, reduces human error and increases cost savings. Automation also expands workforce capacity to focus on more strategic initiatives. Employees can delegate routine tasks and are enabled to make faster, more data-driven decisions. At the same time, companies cite multiple barriers to further investment: unclear ROI (37%), integration with existing systems (48%), and – most commonly – cost (58%). This presents a paradox: upfront costs are preventing many from tapping into potential cost savings.

AI is becoming table stakes for operational efficiency and competitive advantage. Companies that fail to optimize AI capabilities may fall behind on productivity metrics and ultimately face margin pressure. Companies that strategically adapt are expected to see measurable gains. The challenge many companies face is bridging the initial capital gap. Strategic financing solutions can be the key to navigating this paradox. Buscone recommends, “Speak with your advisors about how to maximize ROI with a financing structure that helps overcome upfront constraints while building internal capabilities.”

Final Takeaways

New England's middle market companies are adapting to these three critical challenges, but there remains opportunity for deeper optimization and strategic execution. Companies that both recognize these imperatives and take deliberate action best position themselves as competitive leaders.

At Eastern Bank, we are committed to helping you keep your business ahead of the curve and we provide a range of commercial financing offerings to help companies build for the future. Commercial lending solutions include working capital/lines of credit, equipment/term loans, real estate loans, acquisition financing, asset-based lending and employee stock ownership plan-related financing. To learn more, contact a banker.

¹Middle market companies are defined as those with $25 million to $500 million in annual revenue.

The opinions expressed herein are those of the authors and do not necessarily reflect those of Eastern Bankshares, Inc., Eastern Bank, or any affiliated entities. Views and opinions expressed are current as of the date appearing on this material; all views and opinions herein are subject to change without notice. These views and opinions should not be construed as any specific recommendation. This material is for your private information and we are not soliciting any action based on it. The information in this content has been obtained from sources believed to be reliable but its accuracy is not guaranteed. There is neither representation nor warranty as to the accuracy of, nor liability for any decisions made based on such information.

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