It doesn’t matter whether you are a chief executive or a newly hired intern, it is up to each and every one of us to tap into our drive, our ambition, and our creativity to transform our work and the business of business. We do this by taking on the responsibility for both actions and results. We do this by reaching out to members of our village – drawing them in, sharing a vision and encouraging them to build on, and take ownership in, the opportunities for transformation.
But in amongst all this, we must also understand the nature of the implied leadership contract.
I was reminded of this by Wally Bock’s excellent post, Don’t Just Tell Me. Show Me. In this post, Wally writes of a colleague who challenged him early in his career – rather than offering praise, she said “don’t just tell me, show me”. As Wally explains, praise is powerful and financial incentives can be very effective:
But if that’s all you use with team members, you risk moving out of the realm of social covenants and into the realm of economic contracts.
And this is one of the most important aspects of leadership. Just because you may not “know” every person that works in your business unit or across your enterprise, this doesn’t mean that those people don’t have a sense of who you are. It doesn’t mean that they don’t have some sense of relationship with you. After all, if you have been following my advice and working on your communication skills, you will have built a great deal of rapport with and amongst your teams. But with this sense of relationship also comes a covenant – the leadership contract.
The leadership contract goes way beyond a mere transactional relationship. This is not just about financial reward, recognition or even performance. It is both personal and collective. When your teams buy-in to your vision and commit to making it their own, they are doing so by first providing what Robert Putnam describes as “bridging capital” – the type of social capital that connects us to people outside of our close circle. But I think that the leadership contract spans the space between bonded and bridging social capital (bonded capital refers to those close personal relationships and trust that we have with family and friends). As time goes on, and as leaders deliver on their promises, the bonds between us change. This happens because we derive satisfaction from our work far beyond the financial reward. We identify with our company, with our business unit and with our colleagues – so our work becomes “part” of who we are.
Leaders who recognize the complexity of this type of relationship – the leadership contract – will find higher levels of performance, resilience and innovation within their organizations. And in this day and age, that can only be a good thing.
Nina Nets It Out: As leaders our influence extends far beyond the casual employee-employer relationship. It is multi-faceted. Understanding some of the nuances of the leadership contract can keep us all ahead of the curve.
Congratulations! This post was selected as one of the five best independent business blog posts of the week in my Three Star Leadership Midweek Review of the Business Blogs. Thanks for mentioning one of my posts, too.
http://blog.threestarleadership.com/2009/05/13/51309-midweek-look-at-the-independent-business-blogs.aspx
Wally Bock
Thanks as always, Wally. And, thanks for always sharing such thought provoking, inspiring writing.
I find that “leadership contracts” these days are often unidirectional. The leader is committed, but the follower indifferent and yetpretends to be interested and on board. I found myself struggling to meet any goals earlier on with these kinds of staff. All it took was 10-15% of my staff to behave this way and my business progress was virtually neutralized. I had to clean up the staffing, which I did, and it was painful and slow. Leading by example did not work in these cases, as they either dehumanized the leader as being impossible to follow, and/or became passive agressive in an attempt to maintain some kind of power over the leader.
Once I had started the “follower contract”, and then held the followers accountable for their actions (or the consequence was being purged out of the company for poor performance and production), goals were met, and the business progressed. I no longer tolerate passive aggressive behavior nor poor performance in my business, and hold myself and the employee to our contracts!
Thanks Nina for another lesson in leadership, as each of your blogs reinforces what I have done right or wrong.
Hey Allen,
Thanks for sharing your personal experience related to this issue. I must agree that these ‘contracts’ must go both ways. I also believe that a ‘bad apple’ can spoil the entire barrel, so if 10-15% of your employees are acting contrary to your desires, then progress will be forestalled.
My main point is that even in large scale organizations, where a leader might not be in personal contact with his or her followers, they have an influence that must be understood both in its effect and in how it is created. As an example, think about the influence Barack Obama has on so many Americans and people around the globe. He understands his leadership contract with the people around the world and using his tremendous ‘bridging capital’ to engage the hearts and minds of so many.
Keep on sharing, Allen…and keep on leading!!