Defence procurement is opening to scale-ups faster than at any point in the last forty years. The way scale-ups actually work with primes is not yet well understood by either side.
The prime-scale-up relationship in defence is now a critical commercial channel for European defence tech — and the operating moves that make it work are specific, learnable, and rarely natively understood by either party.
Why the Relationship Is Hard
Primes and scale-ups have different operating models, different risk tolerances, different time horizons, and different cultures. The prime is structured for large, multi-year programmes with predictable margins and risk-managed innovation. The scale-up is structured for rapid iteration, capital-efficient growth, and bounded technical risk.
The procurement structures both parties operate within compound the difficulty. Primes are accountable for programme delivery to government customers. Scale-ups need cash flow and reference customers. Neither party's incentive structure naturally serves the other's, which is why initial engagements often start well and stall in the middle.
What Working Models Look Like
The prime-scale-up relationships that produce real outcomes share three features. They have explicit operational protocols — not just commercial contracts — covering how the two organisations integrate on programmes. Joint integration leadership is named on both sides. Escalation paths are pre-agreed.
They have aligned commercial structures that recognise the scale-up's cash flow needs and the prime's programme accountability — typically through milestone payments structured for both parties' realities. And they have invested in the bridging capability: people on each side whose job is to translate between the cultures, often with experience of working at the other type of organisation.
Three Moves for Each Side
For primes engaging scale-ups, three moves matter. Assign a senior, accountable programme owner — not a vendor manager. Build commercial structures that recognise scale-up economics. Invest in bridging capability internally. For scale-ups engaging primes, three different moves matter. Hire or contract for prime-fluency in the leadership team — typically someone who has worked on a prime side previously.
Treat the prime as a programme partner, not a customer — with the operating discipline that implies. And be honest about which capabilities the scale-up needs to develop to be programme-grade. The scale-ups that get this right are pulling ahead of competitors with similar technology but weaker prime engagement.
What to do next
- Build operational protocols between primes and scale-ups, not just commercial contracts
- Align commercial structures with the realities of both sides
- Invest deliberately in bridging capability — translators between cultures
- Treat the relationship as programme partnership, not vendor management
This is the kind of problem we work on. If you are leading a prime-scale-up relationship that has not yet produced programme-grade outcomes, the team at Grant & Graham would be pleased to talk. We provide operating-model design and partnership advisory across defence procurement to European defence primes, scale-ups, and dual-use investors. Contact us.
