Germany’s Mittelstand is under pressure — and so are its leaders. The pandemic, geopolitical tensions, the shortage of skilled workers, technological disruption and a fundamental shift in values are transforming business models and corporate cultures at the same time. The sheer simultaneity of these developments presents an enormous challenge: leaders today need to think not only strategically, but also in human and transformational terms. In June 2025, master’s students at the Karlsruhe Institute of Technology (KIT), under my professional guidance and the academic supervision of Professor Marion Weissenberger-Eibl, interviewed 16 senior leaders from family-owned businesses, including managing directors, executive board members and advisory board members.The findings reveal a clear shift: leadership in the Mittelstand today must go beyond safeguarding stability and continuing established practices. Companies need leaders who can navigate uncertainty, take responsibility and actively shape change rather than merely administer it.

Dr Juliane Göke, Group CHRO at OHB SE, puts it succinctly in the interview:

“We can no longer afford to have only fair-weather leaders.”

Leadership at a Crossroads

For many years, mid-sized companies were associated with stable structures, predictable cycles and proven formulas for success. Leadership was primarily about staying the course—and that was considered a strength. But as crises overlap, technologies disrupt established models and global uncertainty grows, this approach to leadership is increasingly reaching its limits. Companies that continue to focus solely on efficiency and optimisation risk jeopardising their future.

Dr Simon Thierfelder, CEO of Motorenfabrik Hatz GmbH & Co. KG, describes the new reality as follows:

“The core challenge lies in the convergence of several layers of change. We are seeing profound societal shifts, disruptive technological change and the emergence of new political alignments.”

New Leadership Profiles, Not Perfect Résumés

Companies today need a different kind of leader: people who run a business as though it were their own. Leaders who do more than operate within existing structures and have the courage to forge new paths. Who connect strategy with culture, actively navigate competing demands and give their employees a clear sense of direction.

Many business owners recognise that conventional career paths and established leadership models are no longer enough. They need individuals with conviction, an innovative mindset and a deep understanding of the social, technological and political forces shaping the business environment.

In my advisory work, I repeatedly hear a similar sentiment in such situations: a highly respected manager may have led the company successfully for many years. But the business now needs a different kind of leadership. It reflects a desire for a genuine new beginning.

What Good Leadership Looks Like Today

The interviews with senior leaders reveal several clear patterns: leaders today must be able to think in terms of contradictions while still providing clarity. They need to handle uncertainty with confidence and, at the same time, act with technological fluency, a strong focus on people and an entrepreneurial mindset. Sonja Hornberger, Chief Human Resources Officer at Vitra International AG, emphasises the importance of

“not feeling the need to know everything, but creating spaces in which new ideas are allowed to emerge.”

Leaders today must provide direction even when they do not yet have a ready-made answer to every question. They must, however, ask the right questions and enable others to succeed. This requires more than simply managing and directing. It calls for clarity, strong interpersonal skills and the ability to address cultural tensions constructively. Dr Ulrich Hagenmeyer, CEO of Carl Stahl Holding GmbH, places particular emphasis on the human dimension:

“Good leadership is not about taking a soft approach. But it begins with genuine human connection.”

Effective leaders do not see themselves as sole decision-makers. They structure dialogue, build understanding and make change comprehensible throughout the organisation. Georg Stawowy, CEO of Bürkert Fluid Control Systems, sees leadership today primarily as a mediating role:

“Leaders act as facilitators who balance competing demands and drive change forward.”

Relationships with employees, customers and partners are also becoming increasingly important, particularly in complex markets with long investment cycles. Michael Mrachacz, CSO and Managing Director at Uhlmann Pac-Systeme GmbH & Co. KG, underlines this point:

„Business is done between people – particularly in the capital goods sector.“

At the same time, it is clear that an organisation’s ability to remain fit for the future does not depend on individual leaders alone. Organisational structures can either enable transformation or hold it back. Future-ready leadership therefore also means making organisations more agile, open and capable of learning. Jörn Werner, a former CEO of companies including CECONOMY AG, A.T.U. Autoteile Unger and Conrad Electronic SE, and now a management consultant and member of several supervisory boards, takes a critical view:

“The greatest disadvantage facing Germany’s Mittelstand is that its organisational structures are still too traditional – siloed and overly hierarchical. This slows down transformation.”

This is precisely where leadership becomes visible not only in the decisions that are made, but also in the willingness to challenge established patterns, share responsibility and create the conditions for systemic change. Leadership of this kind requires more than decisiveness. It requires conviction.

The Tipping Point Is Now

The decision-makers we spoke with are resolute. They are no longer prepared to compromise when making critical leadership appointments. The pressure to act is tangible: in a rapidly changing world, companies need leaders who do more than stay the course. They need individuals who actively shape the future—with an entrepreneurial mindset, strategic clarity and a readiness to embrace change. This urgency must not, however, be confused with short-term action for its own sake. Transformation requires endurance, consistency and leaders who can sustain change over the long term. Robert Mähler, CEO and Spokesman of the Management Board of the international confectionery company Mederer GmbH, puts it succinctly:

“Transformation is not a sprint, but a marathon.”

At the same time, companies need the courage to consider different leadership profiles. Many future-ready leaders do not conform to the traditional image of a CEO. But that is precisely where their strength lies. It is not a shortcoming, but an opportunity for renewal. Those who assume responsibility today often bring new perspectives that are essential to achieving genuine change.

What Needs to Happen Now

Two steps are essential:

1. Define a clear leadership profile. Companies need to determine what kind of leadership they require and move beyond outdated expectations.
2. Make future readiness visible. Leadership capability should not be judged solely by experience or job titles. Competency-based interviews, structured potential assessments and open dialogue help reveal who is genuinely capable of leading.

Conclusion

Germany’s Mittelstand is not too slow to transform. On the contrary, many business owners have long understood what is at stake. The next step now requires greater courage in selecting leaders, greater clarity in assessing them and greater confidence in new forms of leadership. The future is decided at the top — not by the loudest voices, but by those who lead with conviction, foresight and impact.

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