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Readiness 2030: Leadership Strategies for Global Businesses in the Eurodome

Readiness 2030: Leadership Strategies for Global Businesses in the Eurodome

July 2025

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Europe’s response to growing security threats is opening new markets for international businesses

On a March afternoon in 2025, European Commission President Ursula von der Leyen stood before the European Parliament and announced something that would have been unthinkable just five years earlier. Europe, she declared, would mobilize up to €800 billion over four years to rebuild its military capabilities—the largest defense market expansion since the Cold War ended. 

The ReArm Europe Plan, later renamed “Readiness 2030,” wasn’t born from ambition. It emerged out of necessity. Russia’s invasion of Ukraine shattered assumptions about European security that had held for three decades. China’s military buildup raised questions about Taiwan. Supply chain disruptions revealed dangerous dependencies. Suddenly, the continent that had spent decades reducing military spending found itself racing to rebuild what it had allowed to atrophy. 

For business leaders watching from boardrooms in non-European cities, von der Leyen’s announcement meant something else entirely: the birth of a market that will reshape global commerce for the next generation. 

This isn’t a story about geopolitics—it’s the largest commercial opportunity to emerge since the internet created the digital economy. While no executive welcomes the tensions driving this change, the reality remains clear: European defense spending reached €326 billion in 2024, up 17% from the previous year. The money is real. The timelines are compressed. The opportunities extend far beyond traditional defense contractors. 

The Architecture of Opportunity

The Readiness 2030 initiative operates through three distinct funding mechanisms. Each creates different pathways for international companies to participate in this massive wealth transfer. 

The NATO Summit concluded in The Hague on June 25 with agreements that accelerate these funding mechanisms. NATO’s Defense Investment Plan structures the spending increase around 3.5% for military hardware and 1.5% for broader defense infrastructure including cyber capabilities and industrial capacity. The distinction matters because infrastructure spending often falls outside traditional procurement channels. This opens opportunities for companies in construction, telecommunications, and logistics that might otherwise struggle to access military contracts. 

The €150 billion Security Action for Europe (SAFE) loan program provides low-interest financing for defense projects that meet specific European content requirements. Think of SAFE as Europe’s DARPA, but with commercial lending behind it. Companies that crack the code on European partnerships find themselves with access to capital their competitors simply cannot match. 

The National Escape Clause allows EU countries to spend an extra 1.5% of GDP on defense without triggering budget deficit penalties that normally constrain government spending. This seemingly technical rule change unlocks hundreds of billions in national defense budgets that were previously capped by fiscal restraints. For companies positioned correctly, this means a sudden expansion of addressable market that won’t repeat in their lifetimes. 

Meanwhile, the European Investment Bank committed €3 billion annually for defense funding. This move turns Europe’s development bank into a military-industrial financier. This institutional change signals permanence—Europe isn’t planning a temporary military expansion, but a complete restructuring of its economic priorities. 

The spending patterns reveal deeper changes in European psychology. A continent that had grown comfortable with American security guarantees now recognizes it must secure itself. European officials have made clear they want to keep the money inside European borders, with new spending plans stating that most non-member countries would be shut out of procurement processes unless they signed Security and Defense Partnership agreements with the EU. 

The Geography of Access

The American Approach: Partnership Over Penetration

American defense companies learned this lesson first. Rather than fighting European protectionism, they’re embracing it. U.S. firms are becoming “fairly aggressive” in pursuing deals with their European peers, targeting companies like Leonardo, Rolls Royce, Airbus, Safran, and Thales for partnerships rather than competition. 

This approach succeeds because it acknowledges reality. Despite European governments’ stated preference to invest domestically, supply constraints in Europe’s defense industry will likely sustain reliance on U.S. firms for key weapons systems. Europeans need HIMARS missiles, AMRAAM air-to-air missiles, AiM-9X sidewinders, Patriot missile defense systems, and F-35 fighter jets. These systems require American technology, but they can be assembled, integrated, or enhanced through European partnerships. 

Entities from countries that do not have a Security and Defense Partnership with the EU may be eligible for partial participation: up to 35% of the cost of production of the project under certain conditions. This threshold creates specific opportunities for carefully structured joint ventures where American technology provides the foundation for European-led projects. 

The Canadian Advantage: Arctic Expertise Meets NATO Access

Canada committed to a new NATO defense spending target of 5% of GDP on June 25, 2025, building on natural advantages that other countries cannot replicate. As a founding member of NATO, Canada enjoys institutional access. But Canada’s real competitive edge lies in capabilities few competitors possess. 

Climate change is opening Arctic shipping routes and increasing northern military operations. Canada’s new Arctic Foreign Policy, released in December 2024, establishes the country’s northern priorities and calls for acquiring eight new icebreakers to enhance maritime domain awareness. The policy recognizes that by 2050, the Arctic Ocean could become the most efficient shipping route between Europe and East Asia. But it is the operational experience of Canadian companies that military planners increasingly prize. 

The Arctic angle offers Canadian companies positioning that transcends traditional defense categories. Energy companies understand extreme-weather operations. Mining firms possess cold-climate extraction techniques. Technology companies develop communications systems that function in harsh environments. These civilian capabilities translate directly into military advantages as European forces prepare for operations in contested northern territories. 

South American Rise: Critical Materials Meet Aerospace Excellence

South American companies prove that geographic distance need not prevent defense market access. But success requires understanding European procurement psychology. Brazil’s Embraer established its first defense subsidiary in Europe, with C-390 aircraft winning contracts in Hungary, Slovakia, and Sweden against established European competitors. 

Embraer’s victories offer lessons that extend beyond aerospace. The company succeeded by establishing a genuine European presence rather than pursuing export plans. Local manufacturing, European partnerships, and commitment to technology transfer convinced European buyers that Embraer brought capability enhancement rather than dependence on distant suppliers. 

This approach becomes more relevant as Europe confronts critical material dependencies. Chile and Argentina control large lithium reserves, increasingly important as defense systems require advanced energy storage. The EU-Mercosur Agreement facilitates market access, while EU Critical Raw Materials Act requirements for 40% European processing by 2030 create processing opportunities for companies willing to establish European facilities. 

The logic extends beyond individual transactions. South American companies that establish European processing capabilities for critical materials position themselves as infrastructure rather than suppliers. Once integrated into European supply chains, these companies become stakeholders in European security rather than external vendors—a status that provides long-term protection against protectionist policies. 

Asian Partnerships: Preferential Access Through Political Alignment

Japan and South Korea enjoy preferential access to European defense markets through carefully constructed political relationships that other regions cannot replicate. EU officials confirmed that partnerships for joint procurements may immediately include Japan and South Korea, which have signed Security and Defense Partnerships with the EU. 

This preferential access creates structural advantages for Japanese and South Korean companies over other non-European competitors. Rather than competing for subcontractor roles, companies from these countries can participate in full procurement processes, provided they meet European content and security requirements. The distinction matters enormously in practice—prime contractors control program direction and capture higher margins than subcontractors. 

Japanese companies like Mitsubishi Heavy Industries can compete for European contracts on equal footing with European firms. South Korean companies like Hanwha bring proven military technology from their domestic market’s constant readiness requirements. Both countries offer advanced manufacturing capabilities and technology innovation that European defense companies value for joint development programs. 

Post-Brexit Britain: Institutional Relationships Trump Regulatory Access

Brexit created new barriers for British defense companies, but many continue winning European contracts through institutional relationships that predate political tensions. The May 2025 UK-EU Security and Defence Partnership opens cooperation pathways, though UK companies cannot access SAFE loans directly yet. 

British companies succeed by exploiting existing industrial relationships rather than seeking regulatory advantages. BAE Systems maintains 37.5% ownership in MBDA alongside Airbus (37.5%) and Leonardo (25%). These ownership structures predate Brexit and continue functioning despite political barriers. The Global Combat Air Programme with Italy and Japan shows how UK companies maintain partnerships outside EU frameworks. 

Beyond Defense: The Ripple Effect Economy

Consumer Products and Services

European consumer behavior is changing in ways that create opportunities far beyond military contracts. The European Commission’s March 2025 guidance advising all EU households to maintain 72-hour emergency supplies affects 450 million people across the continent—more than the entire U.S. population. 

Milos Tucakovic, Global Sector Leader for Consumer Products and Services, observes a psychological change reminiscent of post-war mentalities: “We might want to consider whether we are returning to a mindset reminiscent of the Cold War era following the Second World War, during which people felt compelled to stockpile goods in preparation for potential conflict. This situation could likely lead to an increase in the production of private label products.” 

European Commissioner Hadja Lahbib’s emergency kit recommendations—food, water, flashlights, power banks, radios, medication—create demand spikes for mundane household items that consumer product companies can address without developing specialized defense capabilities. 

This consumer behavior goes deeper than emergency preparedness. European households are rethinking supply chain dependencies. They favor products with transparent sourcing and reliable availability. Companies that can prove supply chain resilience and European manufacturing presence capture market share from competitors who cannot provide the same assurances. 

Traditional food manufacturers discover that military contracts complement rather than compete with civilian operations. Nestlé’s military heritage dates to World War II when Nescafé became standard in combat rations. Today’s adaptations focus on packaging durability and extended shelf life—innovations that enhance civilian products while addressing military requirements. 

Rationtech Europe supplies over 300 MRE meals to EU countries since 2016, manufacturing products with 48-month shelf lives that require no refrigeration. These capabilities translate directly into civilian applications for disaster relief, outdoor recreation, and emergency preparedness markets that are expanding rapidly across Europe. 

French catering giant Sodexo operates with €28.1 billion in fiscal 2023 revenue, building on experience from an eight-year contract managing 51 US Marine Corps mess halls to win European defense contracts. Military dining requires security clearances, specialized nutritional requirements, and 24/7 operations. But these capabilities enhance civilian operations by improving logistics efficiency and operational discipline. 

Energy, Resources, and Mining

Europe’s awakening to resource vulnerability creates a gold rush in materials processing rather than extraction. The continent needs secure supplies of 17 materials that the EU has identified as critical—graphite, cobalt, titanium, gallium, and germanium among others. But Europe isn’t trying to mine its way to independence. It’s trying to process its way there. 

Ward Garven, Global Sector Leader for Energy, Resources, and Mining, explains why processing beats extraction: “The greatest opportunities lie in processing and upcycling rather than extraction. Companies focusing on distribution and coordination platforms will outperform those competing solely on production volume. The goal should be positioning as the platform that coordinates purchasing across multiple countries.” 

The Critical Raw Materials Act sets specific goals for 2030: extract 10% of what Europe uses annually, process 40%, and recycle 25% within European borders. Processing commands higher margins and faces fewer regulatory hurdles than mining operations. Upcycling creates recurring revenue streams from materials already in circulation. 

The EU selected 47 projects across 13 countries to secure supplies. These coordination platforms create entirely new market categories where success depends on relationship management and logistics expertise rather than resource ownership. 

But the real money lies in becoming the intermediary. Europe wants to reduce dependence on Chinese processing. Companies that establish European processing facilities for materials mined elsewhere can capture margins from both ends—buying raw materials globally and selling processed materials to European manufacturers who pay premiums for supply security. 

Industrial

The most dramatic business model changes occur in traditional manufacturing, where companies discover that existing production capabilities can serve defense markets without specialized equipment investments. Rheinmetall converted two automotive factories to make military goods, nearly doubling their weapons division profit to €339 million while their automotive business revenue declined. 

The conversion model works because manufacturing fundamentals remain the same. Continental and Rheinmetall signed an agreement in June 2024 to retrain automotive workers for defense production using existing manufacturing capabilities. The partnership shows how companies can enter defense markets by repurposing current assets rather than building new facilities. 

The scale becomes apparent when considering workforce requirements. Moving defense spending to 3% of GDP means Europe needs up to 760,000 new skilled workers. Traditional manufacturing companies possess the workforce training capabilities and industrial infrastructure to address these shortages more effectively than defense specialists can build new capacity. 

But success requires international partnerships because no single company possesses all the required capabilities. Leonardo and Rheinmetall created a 50:50 joint venture for European land defense systems with Italy performing 60% of the work. The Eurofighter Typhoon involves four countries: UK (33%), Germany (33%), Italy (21%), Spain (13%). 

KNDS acquired Alstom’s Görlitz rail car plant in February 2025 and will convert it to produce Leopard 2 and Puma vehicles. This acquisition shows how defense companies value existing manufacturing capabilities over specialized defense infrastructure. 

Infrastructure projects create additional opportunities that civilian companies can address. Thousands of European bridges require reinforcement to support modern NATO tanks. Engineering and construction companies that understand NATO standardization requirements can capture this work without developing military expertise. 

Jan Duniec, Global Sector Leader for Industrial, explains the conversion opportunity: “Companies must understand that existing manufacturing capacity plus defense contracts creates immediate cash flow opportunities. Converting civilian production lines rather than building new facilities offers the most efficient approach. Additionally, companies that position themselves for infrastructure work meeting NATO standards will find opportunities as military mobility requirements expand.” 

Life Sciences and Healthcare

European defense budgets are funding medical innovations that civilian healthcare budgets cannot afford. This creates competitive advantages for life sciences companies that pursue military contracts. While civilian hospitals debate cost-effectiveness, defense ministries pay whatever it takes to keep soldiers alive. 

The funding dynamics work differently in defense markets. Civilian healthcare buyers usually negotiate prices down and question every expense. Military medical buyers focus on saving lives and may receive large budgets regardless of cost negotiation outcomes. To put it simply: companies that win defense contracts get budgets to develop technologies their civilian-focused competitors may not be able to afford to build. 

Latvia’s VireTS Virtual Reality Trauma Simulator received €2.4 million in European Defense Fund support for VR trauma training. This level of funding for medical training technology would be difficult to justify in civilian healthcare budgets. The company now has AI-powered medical training capabilities that civilian competitors may not be able to afford to develop. 

Dietrich Hauffe, Global Sector Leader for Life Sciences and Healthcare, explains the funding advantage: “Military medical contracts let companies develop and launch technologies that civilian budgets may not be able to support. Companies providing a meaningful solution to save the lives of soldiers can use military funding to build capabilities that may also give them years of competitive advantage in civilian markets.” 

The scale of this funding opportunity is massive. Belgium spent €11.5 million on a single Role 2 Enhanced Field Hospital system with 54 tents of integrated medical equipment. France’s SCORPION program will buy 196 Griffon ambulances by 2030 with advanced life support technologies. 

Biodefense creates additional opportunities through network participation. The COUNTERACT project establishing an EU network for medical countermeasures against CBRN threats was selected under the European Defense Fund and invited to prepare a grant agreement for creating capabilities to develop and deploy medical countermeasures against chemical, biological, radiological, and nuclear threats. Companies that participate in this network can access collaborative defense research projects while building capabilities that enhance their civilian pharmaceutical and diagnostic work. 

The business opportunity works like this: companies that win military contracts develop medical technologies with defense funding, enabling them to also sell adapted versions to civilian markets. The military pays for R&D that creates civilian market advantages. Companies that focus exclusively on defense markets, or those that avoid defense markets entirely, miss this funding source and may fall behind competitors who used military budgets to advance their technology. 

The European Medical Command coordinates 18 EU nations through PESCO, standardizing requirements across countries. NATO medical standardization agreements require interoperability across member nations. Companies that meet military standards can sell across multiple markets while civilian-focused competitors remain locked out of the defense funding that could accelerate their development. 

Professional Services

Professional services firms entering defense markets face established competition from consulting companies that have served national armies and defense contractors for decades. These firms already maintain dedicated defense departments and compete for expanded teams to serve growing markets. Success requires understanding that defense procurement complexity favors firms with specialized expertise rather than general consulting capabilities. 

The complexity extends beyond standard business consulting into specialized areas like legal services for classified information, international partnerships, and security clearances. Law firms that understand defense procurement law find themselves advising not just on contracts, but on corporate structure, security compliance, and international partnership agreements. The learning curve is steep, but once firms develop these capabilities, clients cannot easily replace them. 

Dr. Oliver Ziehm, Global Sector Leader for Professional Services and Technology, explains the market dynamics: “National armies face the challenge of avoiding overpayment in markets dominated by monopolies or oligopolies while demand rises dramatically. They must optimize procurement processes and vendor selection, potentially using experience from sectors like automotive as blueprints. Professional services firms that understand these procurement frameworks, security clearances, and cross-border compliance requirements can help address these challenges while earning better rates because switching costs are high once relationships are established.” 

The established firms already compete for this expanding market. C&V Consulting won three European Defence Fund contracts through specialized expertise rather than general consulting skills. PwC’s NATO Standardization Office engagement shows how established firms connect commercial expertise with military requirements, but only after investing years to understand how defense procurement actually works. 

Ultimately, the business opportunity works because defense clients cannot afford mistakes. A procurement error can disqualify companies from billion-euro contracts. A security violation can end a company’s defense business permanently. Clients pay whatever it takes for professional services firms that understand these stakes and can handle them successfully. 

Technology

European defense forces need quantum-secure communications, battlefield 5G networks, and rapid equipment manufacturing capabilities that traditional technology companies cannot provide independently. Readiness 2030 creates opportunities for companies willing to meet military-grade requirements in emerging technology areas. But success depends on system integration rather than component innovation. 

Military communications require quantum encryption that current systems cannot compromise. PASQAL raised €100 million in Series B funding for quantum computers that generate unbreakable encryption keys, while Finland’s IQM received €70 million to build a 300-qubit military system. The European Quantum Communication Infrastructure includes the Eagle-1 satellite providing quantum-secure communications between European defense ministries. 

Military training requirements drive demand for simulation technologies that allow soldiers to practice dangerous scenarios without risking lives or expensive equipment. Rheinmetall teamed with Hologate to produce VR simulators for tank and helicopter pilots. This partnership shows how civilian gaming technology adapts to military training requirements. 

Dr. Oliver Ziehm explains why integration is the silver bullet of innovation: “Defense ministries don’t buy individual technologies—they buy working systems. A quantum computer alone doesn’t solve anything. But quantum encryption integrated with 5G battlefield networks, backed by independent satellite communications, creates a package worth hundreds of millions. The companies making real money understand that integration work pays better than simple component manufacturing.” 

European militaries also require basic IT systems that function reliably in hostile environments. Software companies win contracts for logistics tracking, personnel management, and equipment maintenance systems. Cybersecurity firms provide network monitoring and threat detection for military bases. Data analytics companies process intelligence from multiple sources to identify threats. 

These routine technology contracts show competing approaches in military procurement. Some defense buyers want custom solutions that meet exact specifications; they argue specialized systems perform better under military conditions and address specific operational requirements that commercial products cannot match. Other procurement officers prefer proven, off-the-shelf technology that costs less and comes with established support networks. Both approaches offer business opportunities, but they require different strategies. Custom development commands higher margins per contract but involves longer sales cycles and specialized expertise. Off-the-shelf systems generate revenue through volume deployment across thousands of installations, compensating for lower per-unit margins through scale. 

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Defense

European defense companies face a paradox that defines the current market: they have enormous order backlogs yet cannot fulfill existing contracts fast enough to meet demand. Rheinmetall’s order backlog reached €55 billion in 2024 and MBDA reported a record €37 billion backlog. The issue is not about developing better weapons. It is about building the industrial capacity to manufacture the weapons Europe already designs. 

This capacity crisis creates business opportunities that most executives overlook. Companies compete to solve production bottlenecks rather than win new contracts. The established defense contractors have more orders than they can handle. They need partners who can solve specific manufacturing problems, not competitors seeking to take their business. 

Consider the biggest constraint: explosive materials production. Europe has only one large TNT production facility—the Nitro-Chem plant in Poland producing approximately 10,000 tons annually—although another facility is being built in Finland. Europe also needs 2 million artillery shells annually

Adrian Czerny, Global Subsector Leader for Aerospace and Defense, explains how capacity constraints create opportunities: “The European defense industry is currently about industrial capacity. The established primes have contracts but lack production capacity.” 

The European Union has responded with unprecedented support for capacity expansion. The EU allocated €372 million specifically for explosives and powder manufacturing, with €248 million targeting powder production and €124 million for explosives. Companies that position themselves as solutions to these constraints benefit from both private contracts and public funding support. 

The counterintuitive reality is that companies providing materials, expanding manufacturing capacity, or solving workforce problems often capture more value than those developing new weapons systems. In a market where demand consistently exceeds supply, the constraint becomes the opportunity. 

Semiconductors

Europe holds 9% of global chip manufacturing, down from 44% in 1990. Every radar system and communications device in modern military equipment runs on semiconductors that Europe imports. The European semiconductor device market in aerospace and defense will grow from $4.58 billion in 2025 to $6.11 billion by 2030. But this growth depends entirely on chips made elsewhere. 

The EU Chips Act mobilizes €43 billion to build European production capacity. Nine countries formed the Semicon Coalition in March to coordinate development efforts. The timeline for new fabrication facilities extends years into the future. European defense expansion cannot wait. 

This creates immediate opportunities in processing and testing rather than manufacturing. European semiconductor companies source 80% of inputs from outside the EU. Companies that establish European facilities for assembly, testing, and packaging capture value from existing chip designs while meeting local content requirements. 

Military specifications favor specialized producers over volume manufacturers. Defense chips operate in temperature extremes and electromagnetic interference that consumer electronics never encounter. They need operational lifespans measured in decades rather than years. These requirements create market niches where capability matters more than cost.  

Leadership Requirements in the New Defense Economy

Chief Executive Officer: Risk Management Over Feature Competition

CEOs entering defense markets discover that procurement psychology differs completely from commercial sales environments. Defense buyers focus on risk mitigation rather than feature advancement. A purchasing officer choosing between two radar systems cares more about reliability under electronic jamming than processing speed specifications. 

This requires CEOs to reframe value propositions around security benefits rather than technical capabilities. Instead of promoting faster processors, successful defense companies explain how their technology prevents cyber-attacks or improves battlefield awareness. The messaging changes from “better performance” to “reduced vulnerability.” 

Defense procurement demands patience and long-term relationship building that many commercial executives find uncomfortable. Contract cycles extend for years. They require sustained engagement with procurement officers who evaluate suppliers as potential long-term partners rather than transactional vendors. 

Military customers evaluate companies differently than commercial buyers. They want to know: Can this company deliver when lives depend on it? Will this company exist in ten years? Can this company maintain security clearances? Will this company prioritize our requirements during crises? These questions matter more than features or pricing in procurement decisions. 

Chief Financial Officer: Contract Structures and Payment Patterns

Defense contracts operate under completely different financial rules than commercial agreements, creating both challenges and advantages that CFOs must understand to succeed. The most immediate difference lies in payment structures. While commercial contracts typically involve monthly invoicing, defense contracts often include progress payments tied to milestone completion rather than time periods. This means companies must finance longer periods between contract award and payment receipt, requiring different working capital management approaches than commercial operations typically need. 

The contract structures themselves present a choice between risk and predictability. Fixed-price contracts provide predictable revenues but require careful cost estimation upfront, since overruns come directly out of profit margins. Cost-plus contracts guarantee profitability but demand detailed expense tracking that many companies find burdensome. The most important insight for CFOs is that these different structures create distinct cash flow patterns and risk profiles that commercial finance teams rarely encounter. 

These financial complexities extend beyond contracts into operational requirements. Defense market entry requires major upfront capital investments—secure facilities, specialized equipment, and compliant IT systems that support contract execution while creating lasting barriers to entry. Security clearance costs add another layer: cleared employees command salary premiums, secure facilities require specialized construction, and background investigations cost thousands per employee. But these investments create barriers to entry that protect margins once established, making defense work more profitable for companies willing to make the upfront investments. 

The compliance reporting that initially seems burdensome actually becomes a competitive advantage. Companies filing quarterly progress reports learn which competitors handle documentation requirements effectively and which struggle with compliance burdens. This information helps CFOs identify partnership opportunities and competitive weaknesses in future bids, turning regulatory overhead into market intelligence. 

Chief Human Resources Officer: Security Clearances as Competitive Assets

Defense market entry creates a talent problem that determines which companies succeed. You need security clearances to win contracts. But you need contracts to sponsor security clearances. Clearances take months or years to process. Companies must build cleared workforces before securing the revenue to pay for them. This timing mismatch forces new entrants to partner with established defense contractors who can sponsor clearances during market entry. 

The answer is recruiting people who already have clearances or can get them quickly. Military veterans have existing clearances and understand defense procurement. They communicate well with military buyers and grasp requirements that civilian employees miss. Universities and technical schools also provide pipelines for candidates eligible for clearances.  

Once companies overcome the initial clearance hurdle, cleared talent becomes a lasting advantage. Professionals with clearances command salary premiums because cleared talent takes time to develop regardless of technical skills. Workers who invest years obtaining clearances become reluctant to leave for positions that don’t require them. This retention reduces turnover in an industry where relationships count more than skills alone. The result is stable workforces that command higher billing rates and build stronger customer relationships. 

The workforce realities create a different kind of business than most CHROs manage. Defense companies compete for a limited pool of cleared talent rather than hiring from the general workforce. This scarcity means CHROs must think like talent investors rather than recruiters. The companies that build the deepest cleared talent pools early will scale fastest as Europe’s defense market expands. Meanwhile, companies that wait will find themselves competing for increasingly expensive cleared talent while their competitors have already locked up the most skilled workers. 

Chief Operating Officer: Security as Product Differentiation

Most COOs view defense security requirements as compliance burdens that add cost and complexity. This perspective misses the business opportunity: security requirements create product differentiation that commands higher prices rather than imposing cost burdens. Companies with SCIFs (Sensitive Compartmented Information Facilities) can bid on classified programs that competitors simply cannot access, creating monopolistic advantages in specific market segments. 

The operational benefits extend far beyond contract access. Security constraints often improve operations across all business lines. Companies implementing defense-grade security find that their commercial operations become more efficient through better documentation, access controls, and process discipline. What initially appears as regulatory overhead becomes operational enhancement that improves the entire organization. 

These security investments appreciate over time as requirements expand across industries. Physical infrastructure like role-based access control and classified material storage represents permanent competitive advantages. The infrastructure built for defense contracts often exceeds what commercial customers require, creating differentiation that helps win civilian business where security and reliability matter. 

Quality control standards in defense work follow this same pattern. Defense quality requirements exceed most commercial standards, but companies that meet these standards find their products command higher prices in commercial markets. Customers associate defense contracts with superior reliability and performance, making defense certification a valuable marketing asset that opens doors across multiple industries. 

Executive Skills for the Defense Economy

The European defense industry experiences “labour and skills shortages” that are “expected to increase in the future,” according to the European Commission. But the shortage extends beyond technical workers into executive ranks where companies need leaders who understand both commercial success and government requirements. 

The Aerospace, Security and Defence Industries Association of Europe warns that “rapidly hiring a large number of specialised personnel is a significant challenge, especially in an already tense labour market.” Brussels Centre for Security expert Daniel Fiott notes that “Europeans have neglected the defence sector for so many decades so governments, armed forces and industry are playing catch-up.” This affects companies across industries that want to bid for defense contracts or benefit from European defense investment. 

Many of these companies will make a dangerous assumption. They will assume their best commercial executives will automatically succeed in defense markets. The financial stakes of getting executive selection wrong are enormous, however. A single failed defense bid can cost companies millions in wasted proposal development. More importantly, companies that misunderstand defense procurement often damage their reputations with government buyers, making future contracts even more difficult to win. Government customers have long memories and share information about which companies struggle with compliance or miss delivery commitments. 

The solution lies in proper executive assessment, but most companies approach this incorrectly. Traditional evaluation focuses on past commercial performance, revenue growth, and team management skills. Defense market success requires different competencies entirely. 

Companies need assessment frameworks that evaluate executives across three dimensions: their ability to work within regulatory environments, their aspiration to build long-term government relationships, and their agility to work across both commercial and defense markets. This type of evaluation often shows which executives already possess defense-relevant skills, even if they have never worked with military customers. 

Kevin McGonigle, Global Advisory Leader for Leadership Assessment and Succession Planning, explains the assessment challenge: “We see companies promote their best commercial performers into defense roles and then wonder why things go wrong. Commercial executives get rewarded for cutting through red tape and finding shortcuts. Defense customers want executives who take time to understand requirements, follow every procedure, and build relationships that last decades. The skills that make someone a star in commercial markets can actually hurt them in defense procurement. You need to assess for completely different capabilities.” 

Succession planning becomes equally important because the talent shortage forces companies to develop defense capabilities internally rather than hiring externally. The succession process often shows that some high-performing commercial executives struggle in defense environments where following procedures matters more than speed to market. Other executives discover they prefer the systematic approach and long-term relationships that defense work requires. Companies that understand these temperament differences can assign executives to markets where they will succeed rather than forcing everyone into defense roles. 

Professional assessment and succession planning services specializing in defense market requirements are becoming necessary for companies serious about European defense opportunities. These services help companies avoid executive mismatches while identifying hidden talent within their current leadership teams. The investment in proper assessment pays for itself by preventing failed bids and enabling faster market entry. 

The Executive Search Window Closes

The competition for defense-ready executives has become Europe’s most intense leadership recruitment battle in decades. While companies work on internal talent development, they simultaneously compete for a shrinking pool of executives who can lead immediate defense market entry. The companies that move first on external recruitment secure the leadership talent needed to capture market share. Those that wait find themselves competing for whatever executives remain available. 

Leonardo reports this as “one of the periods with the most intense search for new employees in Leonardo’s history,” and this competition extends far beyond traditional defense companies. The search covers executives from multiple industries who can transfer their skills to defense markets. But the most qualified candidates combine commercial success with government relationship experience—a combination that represents a finite resource. 

The talent shortage creates a recruitment arms race with specific patterns. Companies cannot simply offer higher salaries to attract defense-ready executives. These leaders evaluate opportunities based on growth potential, market timing, and the company’s commitment to defense market success. The executives who understand both commercial pressures and government procurement cycles can choose among multiple offers from companies desperate to enter European defense markets. 

This scarcity drives important recruitment decisions that compound over time. Companies that hire proven defense executives early can pursue larger contracts, build stronger government relationships, and establish market credibility that competitors struggle to match. Meanwhile, companies that delay executive recruitment often find that remaining candidates require longer development periods, reducing their ability to capture opportunities during the important early years of European defense expansion. 

The executive search window reflects broader timing pressures across Europe’s defense expansion. Companies have roughly two years to build leadership teams capable of winning major defense contracts before market positions solidify and early movers establish advantages that become difficult to overcome. The search decisions companies make now determine whether they help shape this change or get shaped by it. 

The Eurodome effect is beginning. The question isn’t whether it will reshape global commerce, but whether your company will help shape it or be shaped by it. 

About the Authors

This white paper is the result of a collaborative effort between Stanton Chase’s Global Sector Leaders, Global Functional Leaders, and Global Advisory Leader. It was led by Jan-Bart Smits, Global Subsector Leader for Semiconductors and Managing Partner at Stanton Chase Amsterdam, and Tom Christensen, Commercial Global Vice Chair and Managing Partner at Stanton Chase Oslo

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