Hidden Champions, Visible Talent Problem

Hidden Champions, Visible Talent Problem

Some time ago I had coffee with the CEO of one of Austria's most successful hidden champions. Global market leader in a highly specialized niche, exporting to over 80 countries. Genuinely impressive company.

He said something that stayed with me.

"Our customer know exactly who we are. Every competitor in the industry knows who we are. We win tenders against large multinationals. But when I'm trying to recruit an international CFO, I’m losing against companies half our size – just because they have a name people recognize."

"When I'm trying to recruit an international CFO, I’m losing against companies half our size – just because they have a name people recognize."

That sentence captures something I see regularly - in some aspects, hidden champions are, well, hidden.

Austria is full of hidden champions. Mid-sized industrial companies that hold leading positions in global niche markets while remaining almost completely invisible to anyone outside their industry (or region). Precision engineering, specialty chemicals, industrial automation, sophisticated components. These companies form the backbone of Austrian and Central European industry.

Their success is built on deep technical expertise, obsessive customer focus, often long investment cycles, and a culture that tends to value substance over visibility.

All of which are genuinely good things.

These same qualities create real challenges when competing for senior executive talent.

But these same qualities create real challenges when competing for senior executive talent. And the executives who run these companies often underestimate just how hard this has become.

The Employer Brand Problem

The truth is: in executive talent markets, brand often matters more than most hidden champion leaders want to believe.

In executive talent markets, brand matters.

When a strong candidate weighs two opportunities - one at a well-known corporation, one at a company no one in their network has heard of - the invisible company has to work significantly harder to even get the conversation started. This is not about prestige. It's about risk perception. Executives think about what this move signals to the market. What does this look like on a CV in five years? What happens if it doesn't work out?

Hidden champions often respond to this by emphasizing their market position - "we're number one globally in XY." And that's relevant. But it doesn’t always land the way they expect, because it requires the candidate to already understand the niche. And depending upon the role you are trying to fill, many from other market segments don't.

The companies that handle this well have learned to tell a different story. Not about market share - but about what it actually means to work there. The scope. The speed of decisions. The culture. The real influence a senior executive has. That's a compelling story when told well. Many hidden champions simply haven't learned to tell it yet.

The Location Question

Many hidden champions are based in smaller towns and regional industrial clusters. Often for very good historical reasons - close to production, close to the founding family's roots.

For executives who have built their careers in Vienna, Munich, or Zurich, or even London or Paris, this is a significant decision. And I've learned that it's rarely just about the individual. Partners have careers and networks. Children have schools and friends. A relocation to a town with 15,000 people means disruption across an entire family system.

The worst thing a company can do is minimize this. Searches may stall or fail not because the executive isn't interested in the role, but because the conversation about relocation happens too late, or too superficially, or with an implicit message of "that's not really a problem, is it."

It often is a problem – even in times of hybrid work setups. Addressing it honestly and early, including what support the company can offer, makes a much bigger difference than some hiring managers expect.

Compensation That Doesn't Benchmark Well

Hidden champions are generally not poor companies. But their compensation structures were often built for a different talent market, and haven't kept pace with what listed corporations or private equity-backed businesses now offer at senior levels.

Hidden champions' compensation structures were often built for a different talent market.

This creates situations where a strong candidate receives a competitive offer from a company half the size but with a more aggressive structure. And the hidden champion loses - not because they couldn't afford to compete, but because no one had thought seriously about how to construct a package that works in an international senior executive talent market.

Beyond base salary, there are real constraints. Many hidden champions don't have equity programs, because the company is family-owned and that conversation never happened. There are no long-term incentive plans calibrated to what the market now expects. And the whole topic is sometimes handled with a slightly old-fashioned directness - "this is what we pay, take it or leave it" - that may work internally but often not in competitive recruitment situations.

The Family Dynamics Layer

A significant share of Austrian hidden champions are family-owned or family-influenced. Which adds a layer of complexity that textbook recruitment doesn't prepare you for.

Executives joining these companies don't just join an organization. They enter a system with relationships, loyalties, and unspoken expectations that often predate their arrival by decades. Sometimes there are family members in the management team. Sometimes the founder is still around, formally or informally. Sometimes the supervisory board is a family board, not a professional governance board.

None of this is necessarily a problem. Some of the most effective executive environments are family companies with clear values and a real long-term orientation. But it requires a different kind of onboarding, a different kind of relationship management - and above all, a very clear conversation upfront about how decisions actually get made. If that conversation doesn't happen early, it tends to happen at the worst possible moment.

Family companies often have a deeply ingrained culture of being physically present together.

There's one more thing worth naming here. Family companies often have a deeply ingrained culture of being physically present together - decisions made around a table, relationships built over lunch, the assumption that if you're not in the building you're somehow less committed. That instinct comes from a good place. But it increasingly collides with the expectations of senior executives who have built their working lives around flexibility and hybrid arrangements.

This increasingly collides with the expectations of senior executives who have built their working lives around flexibility and hybrid arrangements.

This isn't about being soft on attendance - it's simply a fact of the talent market today. Companies that can't find a workable answer to this question will keep losing good candidates to companies that have.

Developing Talent When There's No System

So far so good – the company has won the search and has hired a strong executive. What might still happen is – they might lose them two or three years later, not to a competitor, but to a more structured environment.

Hidden champions sometimes tend to underinvest in leadership development.

Hidden champions sometimes tend to underinvest in leadership development. Not because they don't care about their people, but because the operational focus is so strong that structured development often never quite becomes a priority. There often are no formal programs, no clear career paths, limited exposure to boards or external strategic contexts.

Strong executives grow. If there's no room to grow, they leave.

The companies that retain well have usually thought about this. They create development opportunities that their size actually enables - international assignments, direct board exposure, strategic projects with real scope. Things that large corporations can rarely offer because everything goes through too many layers. Smaller scale, bigger real influence. That's the genuine competitive advantage. But it has to be made explicit.

What I See Working

I want to be careful not to make this sound like a checklist. Every company is different, and there's no formula.

But from what I observe, the hidden champions that seem to attract and keep strong executives tend to share a certain honesty. They know what they are and what they aren't. They don't try to oversell the job or manage around the difficult questions - location, ownership dynamics, compensation constraints. They address these things early and directly, and somehow that itself builds confidence in candidates.

The hidden champions that seem to attract and keep strong executives tend to share a certain honesty. They know what they are and what they aren't.

They also tend to be clear about what makes working there genuinely different - the real scope, the speed of decisions, the direct access to ownership and boards that simply doesn't exist in large corporate structures. That's not a small thing. For the right executive, it's exactly what they're looking for. The key is knowing how to talk about it in a way that lands.

And perhaps most importantly - they think about the role of the supervisory board not just as governance, but as an asset in recruitment and retention. Experienced, engaged Aufsichtsräte or Beiräte offer something that listed companies often can't: real mentorship, strategic dialogue, and genuine interest in the executive's development.

Not every hidden champion has this yet. But those that do know it matters.

The companies that figure this out won't just fill their next senior role. They'll build an organization that attracts the kind of leadership that carries hidden champions into the next generation.

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ABOUT THE AUTHOR

• Marion Heil is the founder and managing director of Board+CEO Advisors, a Vienna-based boutique specializing in executive search and board advisory for C-Suite and supervisory board mandates. She is based in Vienna.

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