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Good leadership only works where those responsible can make decisions without having to directly consider their own vulnerability. A plea from Birgit Schwab, 1st Chairwoman of the VAA – specialists and managers in the chemical-pharmaceutical industry, why psychological safety, reliable framework conditions and long-term thinking are central prerequisites for leadership and innovation in Germany.
The current debate about the future viability of Germany as a business location is bringing one of the most sensitive adjustment screws into focus: protection against dismissal for specialists and managers. But what is often treated as purely work-policy flexibility is, on closer inspection, a fundamental question of location and mindset. One thing is certain: leadership and responsibility must be made attractive in the long term so that we maintain our ability to innovate as an (industrial) location.
The arguments for more flexibility sound plausible at first glance: “agility” for companies, fewer blockages in personnel restructuring. But this logic falls short – especially in the long-term oriented sectors that make up Germany’s economic strength. Anyone who destabilizes top talent weakens Germany as a business location.
Psychological safety is a location factor
Good leadership only works where those responsible can make decisions without having to constantly keep their own vulnerability in mind. Psychological safety is not a ‘soft factor’ – it is a productive location factor. Psychological safety in leadership describes a central prerequisite for taking responsibility, taking risks and enabling innovations.
“Feeling psychologically safe” is “central to good collaboration and innovation,” defined ETH Zurich (“Psychological safety is central to good collaboration and innovation” – Department of Construction, Environment and Geomatics | ETH Zurich) as early as 2024 as part of its respect program.
Anyone who maneuvers teams through transformations must be able to speak uncomfortable truths and make decisions that not everyone likes. Managers therefore need one thing above all: support.
Long-term innovation cycles, deep specialist knowledge, reliable collaboration
A “hire and fire” mentality may be considered dynamic in other countries. In Germany, it undermines what makes us strong: long-term innovation cycles, deep specialist knowledge, reliable collaboration – important framework conditions for the location.
The Boston Consulting Group (BCG), one of the largest consultancies in the world, states in a 2024 study (Psychological Safety Levels the Playing Field for Employees): “The need to create psychological safety in the workplace has never been more urgent.” And further: “In short, improving psychological safety leads to positive outcomes for all employees, but produces above-average benefits for (minority) employee groups.” It should be mentioned here for the sake of completeness: Managers are also employees of various groups.
In the challenging economic situation, Germany needs doers and doers at all career levels. You must be able to operate from a position of stability. Forbes magazine wrote in an article about Google’s Aristotle Project (The Critical Link Between Psychological Safety And Innovation) that it identified “psychological safety as the critical factor that characterizes the most successful teams.” “Promoting psychological safety is more than just a moral obligation, it is a strategic advantage.”
Realistically speaking, top executives rarely work in accordance with short-term trends. Innovation takes time. Development cycles last years, sometimes decades. Know-how is not accumulated in quarters, but through reliable collaboration. This is particularly true for the German core industries of chemistry and pharmaceuticals, automobiles and mechanical engineering – all of which are research-intensive.
Anyone who makes dismissal protection too flexible risks loss of knowledge and loss of substance, which will be expensive in the long term – more expensive than any severance payment. A hire-and-fire mentality damages exactly the innovative strength that Germany so urgently needs.
Responsible personnel decisions are possible
In addition, no one in Germany can already be fired. Current labor law has long provided scope for responsible personnel decisions. The claim that companies are “blocked” hardly stands up to sober analysis. Rather, the real challenge lies less in the legal situation than in the mindset: accept decisions, not fear them; strengthen trust; Encourage courage to lead.
Give a hold, don’t take a hold
But what does all of this have to do with the mindset of young workers? A recent study (Leadership floor empty: What motivates employees to lead – KOFA) by the Competence Center for Skilled Workers (KOFA) showed a lot. What is actually missing is the next generation of managers. Fewer and fewer employees are willing to take on responsibility. An important reason: Many potential managers are currently experiencing contradictory expectations – maximum responsibility with decreasing security.
This does not fit the needs of young adults who grew up in a volatile VUCA world (► VUCA world: definition and examples | Simply explained). Conversely, this means: If you want to build top performers for Germany, you have to give support, not take hold.
The business location is undergoing major change. Highly qualified knowledge is still the most valuable raw material in German industry. An exchange of managers that is too low-threshold destroys in a short time what has been built up over the long term: experience, technical understanding, trust in teams. Innovation cannot simply be “outsourced” if it requires continuity and specialist knowledge.
This is precisely why Germany needs good, long-term leadership. Employees who take risks and make decisions. However, such strong leaders only emerge where responsibility can be shouldered with backbone – without the threat of the sword of Damocles. In this way of thinking, reliable framework conditions are not a contradiction to transformation – they are its prerequisite. In this respect, stability is not a luxury, but rather the necessary infrastructure for our innovative managers.
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