Companies rushing into cloud computing, AI and other digital tools often assume the biggest hurdle is picking the right technology. In his doctoral thesis Ayomide Peter Alao suggests the real challenge lies elsewhere: in the everyday judgement calls made by middle managers, caught between defending what already works and chasing what might work better.
Established companies rarely have the luxury of starting from scratch, unlike digital-native rivals. They must keep existing business models running while exploring new, digitally driven ones, and decide how to split money and attention between the two. Alao found that middle managers, not just top executives, play a decisive role in resolving these conflicts.
Their approach shifts depending on the stage of the process. When facing early uncertainty, they hold contradictory ideas in mind at once rather than forcing a premature choice. As plans firm up, they narrow the options down to a workable path forward. And when dealing with outside partners, they focus on justifying decisions in ways others will accept and trust.
A close look at pet-care company PetCo showed this in action as it expanded into neighbouring markets. Resources shared with partners - data, platforms, customer relationships - could either fuel growth for everyone or spark competition over the same pie. Handling this well meant spreading leadership across the organisation rather than issuing orders from the top. Only when rivalry turned openly competitive did senior leaders need to step in directly.
Two different playbooks for artificial intelligence
In his thesis Alao also examined how companies adopt AI, and found no single formula works. For predictable, well-understood applications, such as machine learning tools used to forecast outcomes, managers relied on established theory and proven methods, since performance expectations were clear and risks manageable.
For newer, less predictable applications, including generative AI, that approach fell short. Here, managers instead learned by building, testing and adjusting as they went, treating each step as an experiment rather than following a fixed plan.
Together, the findings paint digital transformation as less a technology problem than an organizational problem, one where the most consequential strategic thinking often happens.
Alao's dissertation was supervised by Saeed Khanagha (M&O department) and Hans Berends (KIN Center for Digital Innovation). More information on the thesis