The citizens vote to elect the two parliament chambers members, representing proportionally the states and the peoples. Then the parliament (all members of the two chambers) vote to appoint the 7 Federal Council members. There can appoint any citizen of the country even it's not a candidate. As strange as it look like, yes this has happened: a citizen without high view on the politic can be boosted up to the highest level in a few hours. The main goal is to form a stable Federal Council with a proportional diversity of the leading parties. Then 7 Federal Council members decide by them self there minister assignation between them.
That is how democracy works. That is no different from any other country in Europe. You still need to get around the problem of selecting a person the parliament can vote on. They can't vote on everybody.