The critical questions of our time: Defence and Deterrence
The critical questions of our time: Defence and Deterrence
With heightened focus on security and defence in light of recent geopolitical developments, Alumni Global’s founder and CEO Magnus Tegborg, recently sat down with Micael Johansson, CEO of SAAB. Few leaders are better positioned to understand the impact of the rapid pace of change in defence demands and have firsthand experience of the need for a new approach to leadership—one that is agile, embraces risk, and leverages new technologies like AI and automation.
Micael Johansson
President and CEO of Saab since 2019, with a long-standing career at Saab, dating back to 1985.
Saab today, serves the global market with world-leading products, services and solutions from military defence in all domains to civil security.
A race to scale up
With massive developments within defence, Sweden is not the only country whose budget is set to expand in coming years. Sweden is moving towards a budget of 2.6% of GDP by 2028. This is equivalent of a 400% increase in the defence budget in the space of only a few years.
“We see a need for a huge shift in focus to maintain a deterrent effect. An example of this shift in focus was for instance how quickly we joined NATO. A few year’s ago this would have been hard for many to imagine, myself included. That Sweden would suddenly turnaround and become part of the alliance, leaving behind neutrality. This is a strong indication of how seriously we view the situation.”
With Europe waking up to the seriousness in the geopolitical landscape there’s an urgent need to rebuild and regain momentum to build stronger defence capabilities, and demand is high. Meeting this demand takes time, not only for the defence industry but for other sectors to adapt. The agenda is very much focussed around building capacity and using new technologies to create capabilities faster than before. The pace of technological development is immense.
“War is a tragic and an undeniable failure. But at the same time, it’s a wake-up call to realize that we cannot continue taking things for granted. We need some form of defence and deterrence to protect our way of life. These are critical questions.”
A major challenge of these massive defence developments is that the capacity to quickly scale up a defence force is limited. It's not just about manpower but also about training and adapting to new systems. Even if deliveries of equipment can be expedited, their integration into operational use takes time. Certain sophisticated and complex equipment requires extensive training, while other needs, like stockpiling ammunition or spare parts, can be addressed more quickly.
Collaborative efforts an imperative
Collaboration across borders is crucial. It is becoming clear that Europe must decide on a level of sovereignty, particularly in defence and deterrence. European nations must work together to achieve the necessary scale to compete with the U.S. and Asia. However, there also needs to be a balance to preserve local autonomy, buy-in and interests.
“Sweden is well-regarded for its innovation and industrial capability, and I feel we are listened to more than ever before. It’s crucial that Sweden maintains its ability to develop its own systems, especially in aviation. This ensures autonomy and adaptability to changing threats while fostering expertise. Sweden has built a unique capacity to integrate advanced combat systems, which is something few countries possess. From a cost perspective, Sweden’s systems are significantly cheaper over a lifecycle compared to alternatives from countries like France or the U.S. The broader economic and technological benefits for society further justify these investments.”
Collaboration from the public is also a necessity. Building greater awareness among the population about the importance of defence and security is also high on the agenda. Fortunately, this has made the defence industry more attractive to work in at a time when the industry is screaming out to hire new talent. The heightened awareness has seen a growing sense of pride amongst employees at Saab around the vital role they play in protecting society. Working to shift public opinion is best done with a long-term plan in place to reach consensus
Strong leadership
“ Leadership is about balancing three pillars: working with people, understanding the business, and having expertise in your area. While you may be stronger in one pillar, you cannot neglect either one of them. In recruiting new leadership to Saab, we look for these same qualities. Leaders must inspire trust and have the authority to influence and drive their teams.”
In an organisation growing at the rapid pace that Saab is, there needs to be a close eye kept on maintaining the core values and culture of the company. One challenge that a company such as Saab faces, already perceived to be very conservative, is dealing with long-term projects where it takes time to master something before decisions can be made within the company. In order to evolve with changing market demands, new employees must have opportunities to influence how they work, how they can become more efficient, and how to incorporate knowledge of new technologies into the company so that it translates into concrete results more quickly. This is key in the new landscape, but at the same time, new employees need to understand who Saab is and what the company represents. These are two very important aspects: ensuring that talented young individuals can truly influence the continued development of the company while maintaining its core identity. Company leadership must constantly work to re-enforce, reevaluate and ensure that the correct mindset is integrated into the people who join the company. Whether it concerns inclusivity and associated challenges, diversity-related issues, or how they conduct business and address human rights. Even at Saab and at a time such as this, they constantly work to remind and ensure its people understand who they are and what they stand for as a company.
In today's rapidly changing world, disruptions are reshaping industries like never before. To build businesses that can withstand these challenges and thrive, it takes more than just traditional skills—it requires a unique set of traits and a forward-thinking mindset. The urgent need for agile leadership becomes particularly evident in addressing modern defence challenges, driven by geopolitical shifts and rapid technological advancements. With the leadership at Saab working to emphasise inclusivity, sustainability, and employee empowerment, the organisation is well positioned to navigate a rapidly evolving global landscape effectively.
Based on insights from decades of interactions with business leaders and knowledge from leadership theories and research we at Alumni Global claim that building durable businesses require leaders that show characteristics that include humanity, authenticity, drive for growth and an agile mindset. Having develop processes to identify these competencies in leaders and tools to assess and develop them. You can read more about what know is needed of our leadership our new business landscape here.
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