Aerospace and Defense Sector: Open at the Top, Closed Underneath?

All signs point to this spending as a permanent structural change, rather than mere cyclical adjustments, as the policy scaffolding hardens around the spending. For example, the European Defence Industrial Strategy has set a policy through 2035, intended to strengthen member states’ defense preparation, while instruments such as the Act in Support of Ammunition Production are intended to increase the continent’s physical defense capacity.

Incumbents and disruptors are racing to meet demand

The European A&D sector absorbing this increase, however, is not necessarily structurally ready for it. The market is small and fragmented, led by a handful of large primes followed by a long tail of mid- and small-cap companies.

Two distinct populations are racing to fill in the void. On one hand are the sector’s incumbents, with order books at record levels and hiring on the rise. Alongside them is a population that barely existed five years ago: venture- and private-capital-backed defense-technology disruptors. Already quite visible in the United States — where challengers such as Anduril, Shield AI and Saronic have raised billions at soaring valuations and SpaceX recently completed the largest IPO in history — Europe-based disruptors are beginning their rise as well, as companies like Helsing, ICEYE, TEKEVER, Quantum Systems, STARK, ARX Robotics and Isar Aerospace are raising hundreds of millions of euros and holding their own against the primes in procurement conversations. While these disruptors are relatively small compared to the primes, they are no longer a hypothetical threat.

A&D boards are looking externally for their CEO… but not for the level below

The upshot: An aerospace and defense (A&D) sector built for stability is meeting a decade built for growth. But what does this mean for leadership? How can organizations across the A&D spectrum find the right people to lead them to success in this dynamic environment?

To answer these questions, we recently analyzed leadership at 50 top A&D companies, covering 180 leaders (50 CEOs and 130 P&L leaders one level below). The data points to some interesting trends.

On one hand, despite a reputation for “growing their own leaders,” A&D companies in general are more willing than other sectors to look outside their companies for CEOs. Almost half (46%) of the CEOs we looked at were hired externally.

Of those external CEOs, about half came from outside of A&D, from sectors such as energy, telecom, automotive and big tech. The common denominator? A background of commercial best practices coupled with agility and experience at a fast pace, useful for a defense sector that prizes continuity. The trend applies across the supplier and services tier (where external operators have been brought in to reset underperforming or strategically drifting businesses), and even in non-urgent, non-crisis situations where there’s less of a rush to find the next leader.

A&D CEO origin and background

A layer below the CEO, however, is a different story. Of the non-CEO P&L leaders we looked at, 80% were promoted internally into their current role. Most of them are long tenured, first joining their companies two decades or more prior; 75% have spent the bulk of their careers inside A&D.

The pairing of an externally hired CEO with an internally sourced bench is a common setup at American primes, and there are sound reasons why this could be the case. For example, experienced insiders can help a newly hired external CEO navigate complex, security cleared and program-driven organizations.

On the relatively rare occasions when an external hire enters at the CEO-minus-1 level, it is almost exclusively from adjacent industrial sectors — automotive, appliances and engineering. In the U.S. in particular, a push for more U.S.-based industrial capabilities has led some top companies to seek talent from other leading manufacturing organizations.

This sector’s disruptors offer an interesting perspective on how outside talent can bring much-needed technology experience to fill their leadership ranks. Among disruptors, about half of P&L leaders have an A&D background, about one-third are software-industry natives (more than four times the share of incumbents) and most of the remainder come from government and diplomacy backgrounds, not surprising as companies seek to open doors with sovereign customers.

Is the discrepancy deliberate… or a lag?

There are two ways to view the discrepancy between the CEO level and the one below.

In the generous reading, it’s an emerging talent architecture, not an oversight. Companies have many reasons to maintain strong internal operating benches. Continuity is particularly important for program delivery, and features like security clearances, customer intimacy and engineering memory take a decade to build. At the same time, they inject external capabilities selectively at the top, particularly where strategic reinvention is needed. In this scenario, an externally recruited CEO steering a bench of long-time company insiders isn’t an anomaly, but rather the model.

The more skeptical reading is that companies’ internal pipelines simply aren’t able to meet the moment. One possible reason is simple numbers: More leaders are needed to meet today’s rapid growth than are available. Internal leadership development is a years-long process, even in best-case scenarios, and even pipelines that are 80% internally developed feel thin; what makes for a strong bench also makes one hard to expand at speed. Long-time insiders may also lack the exposure to areas such software, autonomy and cross-sector commercial models that will prove crucial in the coming years.

Thus, the sector faces some blunt leadership questions. Where will it find its next generation of top leaders? And how do they do it fast enough and in the numbers they currently need?

Learning from the American experience

The answer may come from the United States, which is a decade ahead of Europe into this transformation. Its experience shows where the market can lead, with not only SpaceX and Palantir, now public and at scale, but a fast-following cohort of venture-backed defense-technology companies like Anduril, Shield AI and Saronic. Although the U.S. defense sector is at a much greater scale than Europe, its trajectory offers three leadership observations for Europe.

Talent is flowing from primes to disruptors — not the reverse

SpaceX's operating model was built by an aerospace-establishment president working alongside a founder; meanwhile, a Boeing veteran is running Blue Origin's New Glenn program. The U.S. primes served, in effect, as talent academies for future competitors. In Europe, the disruptors are hiring their first senior operators today — and primes' benches are the natural source.

Incumbents can’t simply replicate the founder model

An incumbent cannot replicate disruptors’ typical leadership model — a founder paired with a professional operator — simply by finding a new CEO. That is a structural choice made at founding. But incumbents can still innovate at speed by bringing fresh capabilities at the CEO-minus-1 level, where they can be absorbed without destabilizing the whole.

The side door may work better than the front door

The most durable external entries into prime P&L leadership in our sample did not arrive directly into the seat. Rather, they entered the company years earlier from other relevant backgrounds and rose internally. Hiring people with adjacent experience earlier in their career paths is a pattern that survives contact with a strong operating culture.

• • •

Conclusion

Europe is rebuilding its defense-industrial base on a scale not seen since the 1950s. The leadership system running it has been remarkably stable across the same decades. Whether that stability is an asset or a constraint is, we suspect, the conversation the sector should be having — at Farnborough and beyond.

Methodology

Spencer Stuart analyzed the leadership at 50 top aerospace and defense companies across Europe and North America. The companies were selected for size and market relevance. The group includes incumbent primes, established suppliers, government-technology services and venture-backed disruptors. The analysis included each CEO and up to four P&L leaders one level below (including divisional/regional presidents, but excluding functional leaders). The final list of leaders was classified by route into role and their sector of origin (A&D-experienced; adjacent industrial; adjacent technology/software; adjacent government/military; adjacent services). The data is based on company disclosures, regulatory filings and press releases as of June 2026.