Beyond Traditional Leaders: Current Industry Challenges Across DACH

Beyond Traditional Leaders: Current Industry Challenges Across DACH

Why transformation pressures are fundamentally changing what organizations need from their leaders

Understanding where executives are moving is one thing. We covered some thoughts on what we see happening in the DACH market currently in one of our recent articles (The DACH Executive Talent Market: What's Happening).

Understanding why they're moving - and why certain roles remain unfilled for months - reveals much more about the actual state of our markets.

Across the whole region, industry-specific transformation pressures are completely redefining what successful leadership looks like. From automotive's electric transition to energy's renewable transformation, traditional leadership approaches simply aren't working anymore. Each industry faces its own unique combination of challenges that require different leadership capabilities.

Industry-specific transformation pressures are completely redefining what successful leadership looks like.

Let me walk you through some perspectives on what I'm seeing across some key sectors and what it means for leadership requirements.

Digital Meets Traditional Culture

The Engineering Culture Challenge

German-speaking Europe's industrial strength - companies like BMW, Siemens, ABB - faces a fundamental integration problem. How do you bring digital-native leadership into traditionally hierarchical, engineering-focused cultures where decisions move up and down formal channels?

The search for Chief Digital Officers and CTOs has become incredibly intense. But here's the problem: pure-play tech executives often fail spectacularly due to cultural disconnect. They understand agile methodologies and rapid iteration, but struggle with the precision requirements and safety protocols that engineering cultures hold sacred. Meanwhile, promoting internal candidates usually means missing the digital depth needed for real transformation.

The executives who succeed bridge both worlds. They combine deep industry knowledge with proven digital transformation experience. This profile is rare - we're talking about people who can maintain operational discipline while driving innovation in sectors where a single mistake can cost lives or millions.

Sustainability as Strategy, Not Compliance

ESG requirements and the European Green Deal have created urgent demand for executives who understand sustainability as core business strategy, not just a compliance checkbox. Swiss pharma companies, German automotive manufacturers, Austrian industrial companies - everyone wants Chief Sustainability Officers and CEOs with authentic environmental credentials.

The challenge extends beyond technical knowledge. Successful sustainability leaders combine scientific or technical backgrounds with real P&L responsibility and strong stakeholder engagement skills. They need to navigate complex ecosystems involving regulators, NGOs, investors, and operational teams while actually transforming business models. Finding this combination is difficult.

Industry-Specific Realities

Manufacturing: The Industry 4.0 Gap

German and Austrian manufacturing excellence built on traditional engineering now needs integration with data science, AI, and advanced automation. The challenge isn't finding technical experts - it's identifying leaders who can drive cultural transformation while maintaining operational excellence.

Critical factors include proven ability to lead workforce transformation and reskilling initiatives, experience managing human-machine collaboration in production environments, strong stakeholder management skills to navigate works councils and union relationships, and track records of successful smart factory implementations.

These leaders must understand how AI, IoT, and advanced automation enhance rather than replace manufacturing excellence. They need to connect traditional engineering culture with data science capabilities. And they must manage complex change involving both technical system implementation and human capability development - often the harder part.

Automotive: Managing Two Businesses Simultaneously

The German automotive industry faces perhaps the most dramatic leadership challenge of any sector. Electric mobility, software-defined vehicles, new mobility services - all while maintaining manufacturing excellence and managing ecosystem partnerships. It's like running two completely different businesses under one roof.

The real gaps are stark. We need software and data leaders who actually understand automotive complexity - not just code, but safety requirements, regulatory frameworks, manufacturing constraints. Supply chain executives experienced with battery technology and rare earth materials, not just traditional components. Marketing leaders who can reposition hundred-year premium brands for electric futures without alienating current customers. Operations leaders capable of managing ICE wind-down and EV ramp-up simultaneously.

We often find successful candidates in aerospace, telecommunications, or industrial automation rather than traditional automotive backgrounds. These executives bring experience managing dual business models and complex technological transitions that translate well.

Success here requires understanding complex interactions between manufacturing, software development, and service platforms. It means orchestrating supplier relationships, technology partnerships, and regulatory compliance across multiple stakeholder groups. And it demands driving organizational change while maintaining engineering excellence and safety standards that can't be compromised.

Consumer & Retail: Different Challenges, Common Themes

Consumer Products: Consumer goods companies from Beiersdorf and Henkel to Nestlé and Reckitt face their own transformation pressures. Direct-to-consumer strategies are disrupting traditional wholesale models. Personalization and data analytics are reshaping product development and marketing. And sustainability demands are forcing reformulation of established products and supply chain overhauls.

Leadership challenges here include brand portfolio management in an era where consumers demand both heritage and innovation. Digital marketing and e-commerce expertise that many traditional brand managers lack. Supply chain transformation for sustainability without disrupting availability. And the ability to drive innovation at speed while maintaining the quality and safety standards that built these brands over decades.

Retail: DACH retail markets face disruption from international e-commerce and changing consumer behaviors. Traditional retail leaders from Edeka, REWE, Metro must now compete with Amazon and other pure online-players while managing complex omnichannel transformations.

Key challenges include seamlessly blending online and offline customer experiences while optimizing real estate and supply chain efficiency. Leveraging customer data while navigating strict GDPR requirements. Building agile, sustainable supply networks capable of rapid adaptation. And driving authentic sustainability initiatives that go beyond marketing.

The most successful placements combine retail industry knowledge with technology platform experience, often from companies with strong digital transformation track records or consulting backgrounds with retail specialization.

Technology & Telecom: Innovation Under Regulatory Scrutiny

The DACH tech sector balances rapid innovation with Europe's complex regulatory environment. From SAP's continued transformation to Deutsche Telekom's 5G rollout to Switzerland's fintech ecosystem, leaders must navigate technical complexity alongside regulatory requirements.

Critical needs include understanding both technical possibilities and European regulatory constraints around data privacy, AI governance, and digital markets. Managing complex partner networks while maintaining competitive advantage. Expanding European innovations globally across different regulatory frameworks. And competing for scarce technical talent against global technology companies.

Successful profiles often include former consulting partners with deep technology expertise and regulatory knowledge, scale-up executives from highly regulated industries, or international technology leaders with European regulatory experience.

Transportation & Logistics: Converging Disruptions

German-speaking Europe's transportation sector faces multiple simultaneous disruptions: electrification, autonomous systems, digitalization, changing mobility preferences. Leaders at ÖBB, Austrian Post, logistics companies must manage traditional operations while building future mobility platforms.

What's needed? Understanding integrated mobility ecosystems beyond traditional transportation silos. Experience managing both physical infrastructure and digital platform development. Working effectively across multiple regulatory jurisdictions and safety frameworks. And practical experience in fleet electrification and carbon-neutral operations, not just theory.

Successful executives often come from infrastructure roles with digital platform experience, consulting with transportation specialization, international mobility with European market knowledge, or technology backgrounds with deep understanding of physical operations.

Energy & Utilities: The Energiewende Challenge

The energy sector faces dramatic transformation. Germany's Energiewende, Switzerland's nuclear phase-out, Austria's renewable expansion - all require leaders managing complex technical, regulatory, and social transformations simultaneously.

Essential competencies include understanding complex interactions between renewable generation, grid stability, and energy storage. Managing regulated utility operations while developing competitive energy services. Engaging diverse stakeholders from environmental groups to industrial customers to regulatory authorities. And evaluating emerging technologies while maintaining system reliability that society depends on.

The sourcing challenge is real. Traditional utility executives often lack experience with rapid change. Technology leaders may not understand regulated industry dynamics. International energy executives must adapt to specific European regulatory frameworks. Engineering leaders need development in stakeholder engagement and commercial strategy.

What often works: infrastructure leaders with renewable energy project experience, international utility executives with transformation track records, technology leaders from industrial automation backgrounds, and consulting partners with energy sector expertise.

Financial Services: When Regulation Meets Innovation

Financial institutions face dual pressure: increasing regulatory complexity and customer expectations shaped by fintech innovation. Finding Chief Risk Officers, Chief Compliance Officers, and CDOs who can satisfy all requirements is extremely difficult.

What works? Hybrid compliance-technology leaders who understand both RegTech solutions and traditional risk management. Customer experience executives with deep knowledge of European privacy regulations who can still drive competitive advantage. Operations leaders experienced with cloud migration within highly regulated environments where every change requires careful documentation and approval.

The balancing act is real: navigating complex regulatory requirements while driving competitive advantage, integrating traditional banking relationships with digital platform capabilities, and managing regulators, customers, shareholders, and technology partners who all have different priorities and timelines.

Public Sector: Digital Government Leadership

Public sector leadership across DACH combines democratic accountability with operational efficiency and digital transformation. From smart city initiatives to complex policy implementation, public sector leaders need distinct capabilities.

Digital government requirements include transforming services around citizen needs within bureaucratic constraints, implementing large-scale technology systems within procurement and security limitations, driving coordination across multiple government levels and agencies, and balancing efficiency with democratic transparency that can't be compromised.

The challenges are unique: compensation limitations compared to private sector alternatives, political appointment processes that may limit candidate pools, requirements for specific educational or professional backgrounds, and the need to work effectively within democratic oversight structures.

Successful candidates often include private sector leaders with public service motivation and regulatory experience or international public sector executives with transformation track records, but with the personality and experience to move in often challenging local political environments.

Cross-Industry Patterns

When Leadership Challenges Converge

Leadership challenges increasingly transcend traditional industry boundaries. Digital transformation, sustainability requirements, stakeholder complexity - these create common needs across sectors.

Universal themes include ecosystem orchestration, whether managing automotive supplier networks, retail partnerships, or public-private collaborations. Regulatory agility from GDPR to ESG to safety regulations across all sectors. Stakeholder capitalism requiring balance between shareholder returns and broader value creation. And resilience leadership managing supply chain disruptions, cyber threats, and geopolitical instability.

Where Executives Cross Over

We are sometimes seeing successful patterns of executive movement that would have been unusual five years ago. Technology leaders moving into traditional industries and bringing platform thinking to established sectors - particularly effective in consumer goods, transportation, and utilities. Strategy consultants transitioning to operational roles and bringing analytical rigor and transformation experience. International executives applying global practices to DACH markets - valuable in retail, technology, and public sector. And scale-up executives joining established organizations to drive innovation - especially successful in financial services and industrial sectors.

But in many cases executive hiring processes in DACH still remain conservative and very much industry/sector-driven, especially in comparison to international executive market movements.

What Matters Now

Beyond Functional Expertise

Successful executives today show capabilities that transcend traditional functional boundaries. Systemic thinking that understands complex interconnections between business decisions, societal impact, and long-term sustainability - balancing short-term pressures with long-term value creation. Digital fluency without requiring technical expertise - understanding strategic implications and being comfortable in digital-first environments.

Stakeholder orchestration has become critical - effectively engaging diverse groups including employees, customers, regulators, NGOs, and activist investors. This requires sophisticated communication and authentic leadership presence. Cultural agility for navigating multiple contexts while maintaining organizational cohesion. And resilience with adaptability for remaining effective under pressure while helping organizations adjust to rapid change.

The Integration Challenge

The greatest leadership challenge is integration. Integrating digital and physical operations. Integrating sustainability with profitability. Integrating global scale with local responsiveness. Integrating diverse stakeholder expectations with business objectives.

This capability can't be developed through traditional functional career paths. It requires diverse experiences, cross-functional leadership roles, and proven ability to synthesize complex, sometimes contradictory requirements into coherent strategies.

What This Means For You

For Organizations Building Leadership

Move beyond traditional search approaches. Industry experience alone is insufficient. Focus on demonstrated transformation capabilities, stakeholder management, and adaptive decision-making through actual examples, not just claims.

Plan for cultural integration. Success requires attention to cultural fit and integration support, particularly for executives from different industries or markets. Don't assume great leaders adapt automatically.

Develop succession ecosystems. You need comprehensive leadership pipeline development, not just individual placements. This requires partnership approaches to long-term talent strategy with search firms who understand both traditional dynamics and emerging requirements.

Value experience diversity. The most successful placements increasingly involve non-traditional backgrounds bringing fresh perspectives with transferable competencies - technology executives moving to traditional industries, international leaders with emerging market experience, sustainability experts from NGO backgrounds, transformation leaders from professional services.

For Executives Positioning Themselves

Build hybrid capabilities. Your expertise needs augmentation with transformation experience, digital understanding, and sustainability knowledge. Pure functional expertise is table stakes, not a differentiator.

Consider cross-industry moves seriously. Leadership challenges transcend traditional boundaries. Your capabilities often transfer well to new contexts, particularly transformation experience in European companies.

Position strategically. Understand your value in current market dynamics. Transformation experience in European contexts remains scarce and valuable. Use this positioning intelligently when considering opportunities.

The Road Ahead

New Leadership Models Emerging

Several leadership archetypes may become particularly valuable.

The bridge builder who excels at connecting different organizational functions, stakeholder groups, and business models - succeeding through integration rather than optimization.

The conscious capitalist who authentically combines profit orientation with purpose-driven decisions and can engage diverse stakeholders while delivering results.

The digital native traditionalist who understands digital-first approaches while respecting and leveraging traditional organizational strengths and cultural values.

And the resilient innovator who drives innovation and change while maintaining organizational stability and stakeholder confidence during uncertainty.

Final Thoughts

Industry-specific challenges across DACH create unprecedented complexity but also significant opportunity for organizations developing adaptive leadership capabilities. Understanding why executive movements occur - or why positions remain unfilled - provides insights necessary for competitive advantage.

A few key observations stand out from our work across these industries.

Industry boundaries are dissolving faster than organizational structures. The most successful leaders combine industry expertise with cross-functional capabilities, enabling mobility while bringing fresh perspectives to established challenges.

Industry boundaries are dissolving faster than organizational structures. 

Transformation capability is becoming universal. Whether automotive, energy, retail, or public sector, organizations need leaders managing complex change while maintaining operational excellence and stakeholder confidence.

Transformation capability is becoming universal.

Integration beats optimization. Future success requires synthesizing complex, sometimes contradictory requirements rather than optimizing individual functional areas. The best executives I place can hold multiple perspectives simultaneously.

Stakeholder complexity isn't going away. Across all industries, leaders must engage diverse groups with different priorities and timelines while maintaining strategic coherence. This isn't a trend - it's the new normal.

For DACH organizations, these challenges represent fundamental shifts in leadership requirements, not temporary adjustments. Success demands comprehensive strategies preparing executives for complexity, ambiguity, and continuous adaptation.

The executives driving the next phase of growth will integrate traditional knowledge with adaptive capabilities, cultural agility, and authentic stakeholder engagement. Understanding industry-specific requirements while developing cross-functional competencies represents the real advantage in an increasingly complex environment.

The market may be cautious, but the transformation pressures are real and accelerating. Organizations that understand this paradox - and develop leadership accordingly - will shape the next decade of growth.

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ABOUT THE AUTHOR

• Marion Heil is the founder and managing director of Board+CEO Advisors. She is based in Vienna.