Developments in Defence Industries: Adaptability & Innovation

Ola Alfredsson was recently Counselor for Defense Industry Cooperation at the Swedish Embassy in Washington DC. Before that he held a position as CEO at the submarine and naval ship manufacturer Kockums AB - a multinational company developing and delivering world leading submarines and surface ships. The company is today owned by SAAB (a global defence and security company with 18,000 employees, headquartered in Sweden). Prior to this he held senior executive positions within the Swedish and international defence and security industry for many years. He is a systems engineer and has an earlier background as a naval officer in the Royal Swedish Navy. He is today a shareholder and leader in a multitalented military technology scale-up MilDef listed on the Swedish stock exchange.

Q: Emerging technologies and innovation has long been the hallmark of the private tech sector. Now we see traditional security and defence contractors experiment with M&A, partnerships, new ventures, and business models. What challenges does that impose on leadership in larger defence organizations today, and what routes for handling these are currently available?

A: The defence industry needs to adapt to the new world we live in. We are no longer “companies delivering military technology”, but national security interests, strategic partners, critical supply chains, and much more. The defence industry is becoming tightly integrated into the modern and complex defence of our societies, and therefore organizations must upgrade their way of working. This certainly impacts the way managements need to operate, what they need to offer their customers as well as their employees. I see that many defence organizations struggle with this as their structures often do not leave enough room for the openness, speed, and agility this requires. The necessary capabilities required are difficult to develop organically and more often need to come from outside, through acquisitions, partnerships with private sector and/or academia/innovation hubs. Many traditional defence industry organizations do not have the adequate routes, experience, culture, or capabilities to take full advantage of this today.

Q: Looking at leading software organizations specifically, what challenges lie ahead for the defence sector when it comes to attracting and retaining software and security talent? 

A: The defence sector needs to enable organizational structures more similar to the private tech sector. It also needs to implement agility to better attract and retain critical talent and to foster necessary innovation. Despite the rigid processes and standards often connected to the development of defence technology there must be a culture where there is room for failures and where a test and learn approach is allowed. New talent should be empowered to be the engines of innovation that they are, in order to drive the digital transformation necessary for tomorrow’s defence. Global innovation networks should be established where defence and civil innovation can connect more easily. In the US Defence Innovation Units are established close to civil innovation hubs, to facilitate this link. A factor growing in importance for modern talent is also corporate values - there must be a reason and a “why” you are working for a certain company. This is gradually becoming a strength for the defence industry which is now broadly seen as a critically important and sustainable sector. Following the change in global security it is obvious what importance the defence sector has - nothing can be considered more sustainable than defending global democratic values and this is attracting talent.

Q: Cybersecurity is a key domain for society at large; a more open world may also at some point be more vulnerable. What can private sector leadership learn from the security and defence operations in handling this balance?

A: Most countries are facing cyber threats, with attacks penetrating the military establishment and the private sector alike. The need to protect military systems is well recognized and protection is usually strong. Protecting the private sector has typically drawn less attention, and sometimes even some resistance. However, protecting the private sector is increasingly critical as all nations draw heavily on the private sector for ensuring national security, including securing its critical infrastructure. Many nations today are thinking more broadly on their defence and in terms of total defence of their nations - this means also protecting vital parts of the civil society. As no chain is stronger than its weakest link, this gradually raises the demands also on the civil sector. However, if there is no strong market demand for basic cybersecurity, then there is little incentive for companies to make security the default and necessary investments are often de-prioritized. The government should leverage its acquisition power to create a higher cybersecurity standard for products and services, like it is already being done in the US for companies that want to be a part of the US defence supply chain. 

Jamey Cummings is a Partner at JM Search and a member of the Firm’s Cybersecurity and IT Executives Practice with more than 15 years of executive recruiting experience. Cummings is a recognized leader in advising organizations on the recruitment, assessment, development, and retention of technology and security and risk management talent. His clients have varied from large global corporations to high growth, entrepreneurial, and private equity owned companies.

Bo Ekelund is a Partner in Amrop Sweden and a member of Amrop’s Global Digital Practice, who focuses on high-profile searches for transformative CEOs, board seats and a range of C-suite positions. Through extensive experience in transformational leadership, Bo helps client companies build sustainable results in a digitalized world. Amrop’s Global Digital Practice Team has deep technology and digital knowledge, combining functional and sector experience. We leverage our own digital tools and systems. We have established a robust sector focus approach, where the Practice Team members form powerful sub-groups based on their in-depth expertise in various digital sub-sectors.

 To find out more please contact Bo Ekelund, Jamey Cummings, or the Amrop Digital Practice members in your country.