The New Era of Aerospace & Defense, Part One: The U.S.

Not since the fall of the Soviet Union has there been such a dramatic shift in European defense policy as there is now. The war in Ukraine is having far reaching consequences, most acutely for global aerospace and defense – upending everything from government budget priorities to the shape and size of industry players and how militaries interact with them. At the same time, the Middle East is going through a period of defense localization and the Pacific is seeing significant strategic investment.

Our global experts discuss these developments and explain what they mean for leadership acquisition within the industry.

Part one: The U.S.

For the U.S. the war in Ukraine, simply put, has accelerated trends already emerging in the market. Drones, unmanned aerial vehicles (UAVs), cyber security, and space warfare have become strategic priorities for the government. In particular, the battlefield advantage provided by drones and UAVs and the clear redundancy of tanks in Ukraine, has led to a shift in what government departments are now asking from the industry.

At a macro level, traditional players are pivoting to align themselves with these emerging requirements.

For many, established product lines are no longer fit-for-purpose. Many of the armaments or components they supplied in a steady stream over the past ten years, are no longer being demanded by armed forces. Smaller, more agile, technology-oriented companies have started to fill the gaps. It’s meant that defense departments – previously supplied only by established players – are now comfortable with buying from smaller and younger businesses.

As a result, the evolution of leadership requirements has been significant and swift. 

The industry heavy-weights are looking for strategically oriented leaders who know how to pivot quickly and effectively to meet new market demands.

Many are looking for a fresh perspective and want CEOs who can think in ‘non-traditional’ ways, really understand technology and data R&D, and who can also make the company attractive to younger generations of talent.

This last skill is becoming more and more important. The graduate intake is no longer the sole preserve of the big aerospace and defense companies. Over the past twenty years, these organizations had their ‘pick of the litter’ – the graduate career path in the industry being well-trodden and clearly defined. But now, the established players are competing for talent with smaller, tech-oriented start-ups who often have both an interesting USP and attractive financial benefits. A core requirement for leaders in traditional companies has therefore become the ability to clearly set out the organization’s purpose and its impact on society, so that it’s attractive for new talent.

A geographic shift is also underway. The withdrawal from Afghanistan and realignment towards the Pacific has resulted in significant investment in the navy and air force, particularly in naval systems and aircraft that can monitor specific regions. The U.S. is also supporting the Australian armed forces and its focus on submarine defense.Both major players and newer business are pivoting to meet the demands of this new arena. From a talent perspective, aerospace and defense companies are looking for leaders who understand this region and the defense departments responsible for supplying it.

Both the change in geographic focus and new battlefield demands have altered the leadership acquisition landscape. Leaders no longer need to be ‘born and bred’ within the aerospace and defense industry.

The smartest boards understand that fresh perspectives and new ideas are just as likely to come from leaders in fields like technology as they are from within the industry itself.

They also know the traditional skillset has evolved.

Agility, strategic thinking, and a strong focus on people are now equally as important as the experience of selling into defense agencies and departments. And with the advent of the aerospace and defense start-up sector, the number of leadership positions has grown exponentially.

The industry is undergoing both growth and disruption, and for the best and brightest leaders, it promises significant opportunities.

To discuss the requirements of leadership acquisition and your own organizational needs, please get in touch with the authors or your local Odgers Berndtson contact.

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