Leadership for Sustainability – Speech at the FHWien, 25.10.2023

On 25 October 2023, I gave a guest lecture at the FHWien in Vienna on the role of Leadership for Sustainability. Here is a summarized and polished version of that speech.

Ladies and Gentlemen,

Thank you for the invitation!

Tonight, I want to talk about the role of leadership in corporate sustainability transformation—and more generally, in societal sustainability transitions. I’ll start with the big picture, then bring in some scientific background—especially the concept of dynamic capabilities, and maybe even more importantly, the idea of dominant logic, which I think is crucial for understanding how organizations can truly shift toward sustainability. Then, I’ll connect that to leadership practice—how leaders can actually drive this change.

As we know, companies play a huge role in sustainability transitions—beyond CO₂ emissions, it’s about wastewater, deforestation, overfishing, unsustainable meat production, and more. The pressure on companies is mounting, and business leaders feel that pressure. A powerful example is a 10-minute speech by Paul Polman at the SDG Business Forum 2019. He argues that we must move from business as usual to business unusual if we want a future on this planet. And he’s right—we need a shift across all industries.

A major force is pushing for change are younger generations. Millennials and Gen Z, now up to their early 40s, are driving what’s called climate quitting—with 42% saying they’ve changed or want to change jobs due to climate concerns. Many are also actively pushing their employers to act. Companies feel this, especially in recruiting and retaining talent.

Thus, more and more leaders are aware of their responsibility, and the concept of corporate responsibility is gaining ground.

The role of leaders in sustainability

So—what’s the role of leaders? They have a broad sphere of influence, and they must lead the transformation. That includes:

• Setting bold, but realistic sustainability goals,
• Encouraging innovation and experimentation,
• Rewarding sustainable ideas,
• Embedding sustainability into every decision, and
• Building partnerships across sectors for shared solutions.

They also need to walk the talk. Leadership is not just top-down—leaders can influence their peers, their organizations, and even lead bottom-up or engage in collective action.

Leaders need dynamic capabilities

To actually change, companies need what’s called dynamic capabilities. I’ll just touch on this briefly to bring everyone in. These are essentially the abilities companies need to adapt—to sense, seize, and transform in response to external change.

In simple terms, we can break this down into three core capacities:

1. Sensing – the ability to identify opportunities or threats, both inside and outside the company. This is about staying open, curious, and informed.
2. Seizing – once an opportunity is spotted, this means making strategic choices, allocating resources, and acting on it.
3. Transforming – actually changing the company, both in terms of tangible assets (like infrastructure) and intangible ones (like skills, culture, or organizational routines).

So these dynamic capabilities help leaders and companies go from awareness to action—from sensing a need for change to fully transforming their operations and strategies.

Let’s zoom into sensing for a moment, because that’s where it all starts. The big question here is: Where do you find the signals for change?

The answer is: everywhere. Here are just a few examples:

• Regulations and policies, like the EU Green Deal, which affects nearly every sector—from energy and transport to agriculture and circular economy strategies.
• Legitimacy pressures, especially from younger generations. As mentioned earlier, many won’t work for or buy from companies that don’t have a clear sustainability strategy.
• Changing consumer demands—which show up in how companies market their products. Even when it seems like greenwashing, it still signals what companies think consumers want.
• Environmental change itself—for example, climate impacts already hitting the tourism industry or agriculture.

So as a leader, part of your job is to scan the horizon—to open that funnel and absorb information from a wide range of sources, including

• Traditional media—newspapers, magazines
• Policy platforms—like the European Commission’s Green Deal site or the UN’s SDG resources
• Public lectures, stakeholder events, or evenings like this one
• University collaborations—especially with applied sciences institutions
• Conversations—with employees, especially young ones, but also customers, suppliers, and even competitors

And this brings me to a quote I really like. It’s from a senior sustainability manager who said:

“In the future, experience won’t be a good argument for being a leader—because for what lies ahead, we have no experience. We’ll need to rely more on young people, their knowledge, and their willingness to try things out.”

I think this captures where leadership is heading: not just about expertise, but about curiosity, openness, and courage to lead without a map.

A company’s dominant logic – and why it matters for sustainability

So, these dynamic capabilities—sensing, seizing, transforming—are not floating in space. They’re embedded in something deeper, and that’s the dominant logic of a company. Let’s unpack that for a second.

What is a company’s dominant logic? Well, the more academic definition is that it’s a mindset or a worldview, combined with certain tools and practices used to make decisions and run the business. But to put it simply, it’s the shared understanding of how things are done around here. How value is created. What “good” looks like. How we treat people. How we define success.

It’s similar to organizational culture, but not quite the same. Culture is often more about values and behaviors. Dominant logic is more functional—it shows up in how decisions are made, how roles are structured, who gets promoted, how budgets are allocated, and so on.

Let me give you a concrete example. Some years ago, I worked with a small enterprise doing IT development for social housing. Their dominant logic was built around a simple idea: “Work together well, live well.” They even had the phrase “friends in business” on their website. For them, trust and strong relationships were the foundation of good business.

What did that mean in practice? A friendly, collaborative atmosphere. Lots of social events, both internally and with external partners. Their hiring practices, working hours, even salary structure reflected this logic. It shaped everything they did.

Now, where does this dominant logic come from? It’s usually rooted in the founders’ worldview. The person or team who starts a company builds it around their mental model of how the business works. Over time, as the company grows, the structures and systems grow around that initial logic. They hire people who share that mindset—even if they think they’re hiring “diverse” perspectives, it tends to stay within a certain orbit.

And even if the founder eventually leaves, the dominant logic can remain. It becomes part of the company’s DNA—how it looks, how people behave, what’s seen as “normal.”

You can sometimes see dominant logic reflected in very tangible things. Like office layout—open spaces vs. cubicles. Or dress codes—formal vs. casual. These surface-level cues can give you a hint about deeper values like hierarchy, creativity, or efficiency.

But more importantly, it shows up beneath the surface, in things like:

• How decisions are made and by whom
• What gets rewarded or punished
• What slogans or mantras people repeat
• What kind of leadership is admired
• Which kinds of behavior are seen as acceptable or “just how things are”

All of this has huge implications for sustainability.

Because dominant logic determines how open a company is to change. For example:

• If your status symbol is a gas-guzzling company car, shifting to green mobility is going to be a challenge.
• If your culture encourages working around the clock, reducing energy consumption might not be a priority.
• If your retail model produces tons of unsold stock and returns, then circularity becomes very hard to implement.

And it’s not just environmental.

Let’s take social responsibility. Some companies use forced distribution in performance reviews—ranking employees and automatically letting go of the “bottom” performers. The idea is to increase motivation through competition. But it completely ignores human realities—age, caregiving duties, health. The logic here is: “Survival of the fittest,” and anything else is secondary.

This is exactly why understanding the dominant logic matters. Because it sets the tone for what’s possible in terms of sustainability—and what will face resistance.

Let’s go one step deeper and look at the more invisible side of this logic. There are shared mental models, values, decision premises, and organizational structures.

A shared mental model is how people believe the world works. If a company believes “it’s a dog-eat-dog world,” that survival-of-the-fittest idea, then their decisions will prioritize speed, agility, and individual performance.

Those assumptions become decision premises—unspoken rules for what counts when making a choice. And those decisions shape structures and processes: flat hierarchies, fast decision-making, flexible teams.

Everything is aligned. It all reinforces each other. And together, this creates the dominant logic—the underlying thread that shapes the organization’s behavior.

Now, each company is different. Different founders, different sectors, different products—so naturally, each company’s dominant logic will have its own flavor.

But still, in many companies—especially in traditional, large, Western firms—we see some recurring themes. For example:

• Performance goals are mostly financial—sustainability targets are “nice to have”
• Control systems are driven by financial KPIs—other indicators are tracked, but rarely drive real decisions
• Stakeholder relationships are mainly contractual—just meet legal requirements, nothing more
• Governance often excludes those most affected by business decisions—like when companies relocate without including the impacted local communities in the decision process

This all might sound a bit heavy, but it’s also empowering. Because once you understand your company’s dominant logic, you can begin to question it. You can ask:

• Is this still serving us?
• Is this aligned with where we want to go?
• What needs to shift—for sustainability to become real, not just a PR statement?

…and then, if we think again about what this means for the dominant logic of a company, then it becomes clear: it’s not just about changing a few operations here and there, or adding a sustainability report on top of everything else. What really needs to change is the core understanding of what a business is for and how it defines success.

Changing the dominant logic as a leader

So what exactly has to change in the dominant logic?

Well, first, the core purpose of the firm has to be redefined. Instead of maximizing shareholder value as the central goal, the company has to embrace a broader purpose—one that integrates environmental regeneration, social well-being, and economic resilience. That’s the foundation of the triple bottom line: not only profit, but also people and planet.

And this shift in purpose has to be reflected in the goals the company sets, the way it measures performance, and the kind of decisions it prioritizes. In the traditional dominant logic, goals are often narrowly financial: growth, efficiency, profitability. But in a sustainability-oriented logic, these goals expand. They include reducing CO₂ emissions, ensuring fair labor practices across the value chain, protecting biodiversity, and even fostering employee well-being or community trust.

Then, if we go one layer deeper, it’s also about the assumptions we make in our daily business routines. For example, the assumption that natural resources are infinite or cheap. Or the idea that faster is always better. Or that “success” means scaling up endlessly. These ideas are so embedded in how many companies function that we rarely question them. But they are exactly what needs to be questioned and ultimately replaced with more future-fit logics.

And of course, all of this doesn’t happen in a vacuum. Leadership is crucial here. Leaders have to actively challenge these assumptions, make space for alternative narratives, and set new norms. They need to empower teams to try out new approaches, to experiment, and yes, sometimes to fail and learn.

So again: changing the dominant logic doesn’t mean writing a new mission statement and moving on. It means changing the entire way a company thinks, decides, and acts. It means asking different questions. Like: What kind of future are we contributing to? Whose voices are heard in decision-making? What kind of value are we creating—and for whom?

These are the questions you can ask and these are the levers you have as a leader to change your company.

There is a role for everyone, no matter at what level

I know this can feel overwhelming at times—especially when you think about how entrenched some of these structures and reward systems really are. But I want to stress that change doesn’t have to be perfect from day one. It’s more important that it’s genuine. That there is a willingness to reflect critically, to take small steps, to learn from mistakes, and to keep moving forward.

And of course, not every change has to be some grand, top-down strategy. Change can happen in small, local pockets—within a team, a department, or a particular project. Sometimes it’s even those little experiments, the pilot initiatives, the “let’s try this differently” ideas, that spark bigger organizational learning and ripple outward. So if you’re in a position where you think, “I’m not yet a senior leader, what can I do?”—the answer is: a lot. You can be that spark. You can model a different way of working, questioning, and prioritizing.

One thing I’ve seen really work in practice is finding allies. Because being the only one talking about sustainability in a room full of people focused on short-term gains can feel exhausting. But when you’re not alone—when you build a small coalition of people who share your values—it becomes easier to amplify the message, to build credibility, and to push for change in a more structured way.

So overall, leadership is key. Structures and procedures matter. But in the end, it’s also about human beings connecting with each other, aligning around a deeper purpose, and slowly rewriting the script of what business is about.

Thanks again for your attention—and more importantly, for your engagement with this topic. The future of sustainability in business will be shaped by people like you.