Leading for impact: Transforming leadership decision-making for a sustainable future

In the face of unprecedented global challenges, businesses are increasingly recognising the limitations of traditional decision-making frameworks that prioritise short-term financial returns. The imperative to shift towards holistic and full-impact thinking has never been clearer, demanding that organisations integrate broader societal and environmental considerations into their strategic objectives. 

This evolution is not simply a moral imperative but a pragmatic strategy for lasting business success. Leading companies are moving away from simplistic business cases towards more nuanced approaches that reinforce sustainable leadership and decision-making at scale.

The case for holistic and sustainable decision-making 

Traditional business strategies have often focused narrowly on financial metrics –principally, shareholder returns. However, in an era of social accountability and environmental urgency, this singular focus is increasingly untenable. A new paradigm is emerging, advocating for a balance between economic, social, and environmental performance – interlinked goals that together define the holistic business case. 

Holistic decision-making therefore involves adopting frameworks that not only consider immediate financial outcomes but also long-term impacts on key stakeholders, including customers, employees, communities, and the environment. This expanded perspective encourages businesses to move towards value creation that benefits a broader array of interests, aligning with the principles of corporate social responsibility criteria. The shift to this model promises not only enhanced reputational capital but also mitigates risks associated with neglecting externalities that could compromise future business resilience. 

A recent Implement Consulting Group survey conducted with 175 organisations across ten European industries illustrates the growing adoption of sustainability in decision-making. However, the survey data also reveals a stark contrast between industry leaders and laggards in sustainability practices. Notably, 84% of sustainability frontrunners report systematically incorporating sustainability factors into major strategic decisions, compared to only 58% of laggards. Furthermore, 87% of leading firms actively discuss their societal contributions, while just 59% of slower movers do the same. 

This transition reflects an important shift from a narrow focus on shareholder value to a multi-stakeholder framework among leading companies, underscoring how progressive companies are redefining value creation to include societal benefits and full impact perspectives.

Multiple pathways towards holistic and sustainable decision-making

Adopting holistic decision-making is not a one-size-fits-all solution. Companies may traverse various paths in integrating sustainability into their management practices and leadership frameworks.

Typically, we see companies starting with establishing soft awareness and training, moving towards the structures and resources to support decision-making, and concluding with hard motivational and enforcement mechanisms. But as stated, one size does not fit all, and company context and goals need to be considered carefully to find the right route to success.

Pathways may include:

• Increasing awareness: Building motivation and understanding among internal stakeholders about the importance of sustainable practices through communication and educational initiatives.
• Training for competency: Implementing training programmes to equip employees and leaders with skills for effective sustainability-minded and holistic decisions.
• Persuasion through communication: Engaging stakeholders with continuous narratives based on a well-crafted core story that highlight the importance of sustainable action.
• Role modelling: Identifying and promoting role models who exemplify sustainable practices within the organisation to inspire others.
• Establishing restrictions: Implementing non-negotiable rules or guidelines that align with organisational strategy and values to guide decision-making toward sustainable outcomes.
• Enablement through resources: Providing access to data, insights, and resources necessary for more informed decision-making processes. E.g. building on digital and AI tools to cope with complexity challenges.
• Restructuring business processes: Revamping organisational processes to integrate new decision-making tools and frameworks ensures sustainability is considered consistently. E.g. in customising tools for development or procurement.
• Applying peer pressure: Creating accountability by outlining consequences for failing to meet sustainability objectives. Punishing “bad behaviour” in critical cases.
• Incentivising desired behaviours: Linking sustainability outcomes to specific goals, KPIs, and rewards, thereby motivating and reinforcing behavioural change.

A clear example of these pathways is Royal Unibrew, a prominent player in the beverage industry, that effectively integrates sustainability into its corporate strategy through detailed KPIs, which shape both their environmental and social endeavours.

These KPIs include ambitious goals like achieving net-zero carbon emissions, which are validated and strategically aligned with their broader sustainability plans. Additionally, Royal Unibrew is committed to enhancing gender diversity, setting targets to ensure that at least 40% of the workforce represents the underrepresented gender. By embedding these metrics in management performance assessments and incentive programmes, Royal Unibrew ensures that sustainability is not just a peripheral concern but a central component of its decision-making process and organisational culture. This blend of environmental focus and social responsibility drives Royal Unibrew’s sustained growth and commitment to responsible business practices.

Overcoming barriers to holistic decision-making

Despite these strategies, significant barriers often hinder the transition to sustainable decision-making. Many organisations struggle with ad hoc decision-making structures that lack a systematic approach. These structures often fail to consider the full implications of decisions across their lifecycle, particularly at the early stages where supposedly great ideas are born and where significant impact could be determined.

Human biases and existing competencies can also obstruct the path to transformative change. Often, decisions are distorted by cognitive biases or settled through internal politicking, instead of being informed by objective criteria and comprehensive data.

Political dynamics within organisations may further complicate sustainable decision-making, where decisions are influenced more by “success in pitching ideas” rather than their inherent merits. Additionally, the dominance of financial logics – a focus on short-term financial performance metrics – often precludes consideration of long-term, intangible benefits and impacts.

Complex decision-making tools, while needed, can become unwieldy and challenging to operationalise without clear data standards. The absence of consistent data sources and methodologies makes it difficult to validate choices with confidence, further exacerbating these difficulties by maintaining a status quo where decision paralysis prevails.

Making sustainable decisions tangible through transformative tools

Despite these barriers, leading companies are increasingly adopting innovative tools to integrate sustainability and holistic perspectives into decision-making. And like transforming ways of working, the toolbox needs to be carefully considered so that simple decisions are not dragged down by applying overly complex tools or vice versa.