Real-time insights from senior leaders shaping the future of defence manufacturing.
Emerging dynamics in the defence industry: executive insights from the frontline of change
The defence sector is entering a phase of rapid transformation, driven by geopolitical urgency, heightened demand, and shifting expectations around speed,
scale, and adaptability. In recent months, Kienbaum has spoken extensively with senior executives across Europe’s defence landscape. Their collective insights reveal a sector under pressure, but also brimming with potential for reinvention.
1. Scaling at speed
Across the board, defence companies are doubling output expectations. This surge is fuelled by increased NATO spending, urgent procurement programs, and a strategic shift away from “just-in-time” to “just-in-case.” The tempo of industrial growth is unlike anything seen in decades.
2. Delivery timelines are being compressed
Projects that once unfolded over years are now expected in months. Leaders report a major cultural shift, as defence organizations adopt the speed mindset of sectors like automotive and aerospace. Tolerance for delay is evaporating. Lean, cross-functional ways of working are becoming the norm.
3. Capacity bottlenecks & internal competition
As demand spikes, internal resources are stretched thin. Programmes now compete for access to production lines, skilled engineers, and supply chain bandwidth. The internal competition for capacity has become a defining challenge for large, matrixed firms.
4. Networked delivery & extended ecosystems
To cope with scale and
speed, many firms are shifting to more distributed delivery models. Strategic partnerships with mid-tier suppliers, contract manufacturers, and niche tech players are being leveraged to add external
agility
and capacity. Network orchestration is becoming a critical executive capability.
5. Organisational inertia
Despite market urgency, internal structures often lag behind. Leaders cite rigid hierarchies, siloed functions, and outdated governance as key barriers to
transformation. While change programs are in motion, many remain sceptical that legacy systems can evolve fast enough to meet current demands.
6. Sustained growth outlook
NATO’s collective investment push signals a strong long-term outlook. However, executives note that actual programme-level funding may take 1–2 years to fully materialise. Strategic planning must therefore balance short-term delivery pressure with long-term positioning.
7. Standardisation as a strategic lever
Customisation has long dominated the defence sector. But scaling up under new timelines demands a different approach. Common platforms, modular architectures, and industrialised design are gaining traction as key enablers of scale, speed, and efficiency.
8. The talent challenge
The battle for talent is intensifying. The defence sector faces a dual constraint: niche technical skill requirements and strict security clearance hurdles. Engineering, programme delivery, and advanced manufacturing roles are particularly hard to fill. There is growing urgency around leadership development, succession planning, and talent attraction strategies.
Conclusion
The defence industry is at an inflection point. To seize the opportunity and meet escalating demands, companies must move beyond traditional operating models. The winners will be those who industrialise innovation, build agile delivery networks, and align leadership with the pace of change.
Connect with our Defence, Digital Security, and Dual-Use Technology Practice to explore how our leadership solutions can help your organisation scale, transform, and lead in this new era of defence.
Declan Murphy