Opportunities for advancement: "Excel instead of excellence": Three factors determine who makes it to the top in German companies

Increasingly, covert search assignments from recruiters who fill top positions are showing that supervisory boards and entrepreneurs are doubting their top performers - and are looking for replacements for the incumbents. Executive recruiter Nicolas von Rosty, Germany head of Heidrick & Struggles, says: "Many managers are waiting and seeing", some are even in a state of shock.

CEOs and managing directors are hesitant to make radical decisions in the face of crises, trade conflicts, and artificial intelligence (AI) - such as cutting jobs, relocating sites, or realigning the business model. Whether it's a lack of relevant experience or suitable personality to tackle challenges - if the wrong people are in charge, the consequences can be catastrophic.

Read also: Leadership Professor Bruch: "More than three-quarters of companies are collectively overwhelmed"

Inadequate appointments to key positions slow down organizations. Companies lose their punch because strategic decisions are not made courageously or changes are blocked. Employee turnover increases, talent is lost. Productivity and innovative power decline.

Why unsuitable executives rise to the top - and how to do it better, managers, headhunters, and insiders explain. Three factors play an important role.

Factor one: Career advancement - loyalty tops performance

Top positions in Germany are often the result of internal promotions - from team leader to CEO. Whether it's a corporation or a medium-sized company: executives climb the ranks step by step in the same company over the years. Critics call this "chimney career" - always moving up, but always in the same shaft. An evaluation of the CVs of the DAX 40 board members, carried out by the Handelsblatt Research Institute at the end of 2025, shows that almost two-thirds of the board members of Germany's largest companies were promoted internally.

At BASF, BMW, Continental, DHL, Rheinmetall, RWE, and Zalando, all of them were promoted internally.

The similarity of many of the 231 CVs is striking: male, between 50 and 60 years old, studied economics, German citizen. Diversity looks different. Many successful business leaders have emerged from this career model in the past. However, this career model no longer seems ideal. And for several reasons: "If you rise internally, you get to know the decision-makers and customs of your own company intensively, but you hardly experience alternative organizational forms or leadership concepts," says executive recruiter Norbert Graschi.

Before switching to executive search, he was the head of Graschi Executive Search & Career Consulting and had about 20 years of experience as a human resources manager: at BMW, Infineon, and most recently, he led executive development at Siemens. About the career advancement, he says: "It favors long-term company affiliation, good networking, and loyalty."

Performance is highly valued. "But if you move cleverly in the hierarchical structure, you often have better chances of advancing than someone who thinks outside the box or suggests new ways." This is because many superiors need to agree to each promotion. "This prevents open opposition and diversity of opinion," says Graschi.

What needs to change

Career paths and talent promotion should be reviewed. "It can't be that companies inevitably fill CEO positions internally just because they have promised them for years," says headhunter Nicolas von Rosty. External candidates must be considered more strongly. Private financial investors like Blackstone or KKR set an example: they deliberately opt for external managing directors "who don't have to consider internal networks," says the executive recruiter.

Returnees also deserve a chance more often, notes his colleague Norbert Graschi: former employees who have gained new experiences as interim managers or founders.

Overall, more openness - also for changers between corporations and medium-sized companies - creates more movement in the manager labor market. And brings companies more diversity, experience, and innovative power.

Factor 2: Management versus leadership - administration instead of leadership

"Many top managers are strong in terms of expertise, but weak in terms of employee leadership," says Gabriele Thiel. The manager from the automotive industry herself rose classically from the university to the middle management of a DAX group. From her first day as a supervisor, she was irritated "that the leadership task is primarily understood as administration."

Controlling processes, monitoring budgets, following predetermined structures. "This works, but it lacks attitude, inspiration, and courage for change," she says. Innovation is considered a risk, not a leadership task. The fear of taking responsibility is often greater than the will to shape the future. Thiel's explanation: "Those who change things risk failing - so everything stays the same."

Visions, values, good employee communication? None. And so, from team leader to board level, "Excel instead of excellence" reigns in the leadership circle, she summarizes.

What needs to change

"If the leadership ideal is 'to calculate correctly' instead of inspiring, motivation and energy as well as the employees' desire for meaningfulness and recognition often remain untapped," says Anja Michael. The HR manager of Zvoove has more than 25 years of experience in leadership roles in human resources in medium-sized companies. Whether family-owned or...