What Are The Terms of Your “Contract?”

Is your psychological contract intact?

Every leader is working under a contract…a psychological contract with followers. This psychological contract spells out the terms of the relationship, the reciprocal agreement that defines your expectations on the one side and the employee’s expectations on the other. These mutual expectations are the conditions under which you as leader can expect loyalty and commitment from followers while at the same time define the accountabilities you promise in return for that loyalty and commitment.

Unlike an employment contract, the psychological contract remains in large part unstated. It’s not written down or kept in a file with Human Resources. It’s an understanding that is assumed and in that assumption lies the difficulty.

In the mid 1970’s, John Kotter proposed this concept as an explanation of the relationship between employees and organizations. In his work published by the California Management Review, he proposed that people join a company because of the perceived match of what the company offered as compared to their needs. For example, the company gives a fair salary, the employee gives a fair work day. The company gives personal development, the employee gives loyalty to the company. My focus instead is on the personal psychological contract because, in the end, it is an employees commitment to you as a leader that will often determine whether they stay or go.

Your people follow you in part because you fulfill various needs. Since these are psychological rather than concrete, these needs are sometimes not as clear as salary and work schedule. For example, while salary may indeed be an important part of the relationship, the respect for their talents and individuality may be part of the psychological contract. Because you value me, I will give you my effort. I will provide consistent productivity and you provide predictable security. I will give you discretionary effort—above and beyond my job duties— in return for you giving me the opportunity to grow my skills and talents.

When this contract is broken, regardless of the reason, the relationship becomes transactional very quickly.  As your follower, I will look at my options similar to any redress in the event of a broken contract. We can attempt to renegotiate the contract by spelling out the reality of the situation and finding ways to meet my needs creatively. I can sever the relationship because in my view you have failed to live up to your expectations. Or I can decide to “quit and stay” where, because of my view that you have stopped delivering, I choose to stop delivering as well. This is the situation that one manager described by saying, “We have too many people around here who are no longer with us.” This third condition can lead to enormous problems, not just for the leader but for the organization as a whole.

So, what are the terms of your psychological contracts with your employees? Do you have any real notion as to what their expectations might be from a personal and psychological view? Is it possible that the behavior you have started getting from your followers is due to breach of contract on your part?

The only way to fully understand an individual’s psychological contract is to make it explicit. Talk to your followers about their expectations, goals and aspirations. Ask them what is important to them and listen to the message when they tell you they are dissatisfied. Take the time to identify this unwritten contract and you’ll find some of the keys to a more productive and satisfied workforce.

 

Getting Back to Why You’re Here

Leaders have to reflect

I love writing a blog for several reasons, but one of those is that I can simply talk to those who want to listen about what is real to me at the moment. Almost always this is directly related to leadership and I suspect today is no different, but I’m in a funny place. I was asked by the Annie Jennings group (awesome PR folks by the way) to consider writing a bi-weekly blog for their site. Of course I will write for just about anybody because I’m passionate about leadership and leadership topics. Except this time, they want me to write more of an inspirational blog than a leadership blog.

I’m fascinated by the response this brought out in me. I use to be a fairly frequent motivational speaker because I’m also passionate about the fact that most people do not achieve their potential because they forget what they know about their ability to succeed. I love feeling like something I said just might have an impact on somebody far beyond when I said it. More than that, one of the thrills of this kind of communication is that you say what you believe in the way that you believe it and then weeks or months later, somebody sends you a note saying you really impacted their life.

But, you know what my first internal response was? “I don’t do motivation anymore.” I have somehow allowed myself to get caught up in publishing, teaching, writing and so forth and managed to lose the main point from the beginning. When I first started down this path my belief was that touching the lives of leaders could have a great impact, not only on their day to day work, but on their lives and those that followed them. In fact, my primary interest in working with leaders is the multiplying effect that leaders have on others.

By getting caught up in the actual tactics of what I do, I lost the connection to the reason that I do it. “I don’t do motivation anymore,” is about as sad a thought as I think I could have had. Luckily, I wrote it in a text to Karen, my wife, and had a chance to actually see myself write it. The act of seeing it made it significant in the fact that I truly don’t believe what I said…or more specifically, I can chose to absolutely NOT believe what I said.

There is a connection to leadership here, by the way. At times you need to step back…maybe way back…and remember why you do what you do. Whether you articulated it or not, you had a vision when you started. But visions are delicate things and can be altered, changed and hidden by the tasks that are in front of you. My suggestion…this week carve out an hour for yourself and reflect on this question: “Why do you do what you do?” Then ask yourself, “Are you satisfied with the answer to your question?” If not, try to remember the things you planned to accomplish when you first started down this role and recommit to the purpose that you started with.

I’ll keep you updated about this other blog and how it goes. It’s not up and running quite yet but will be very soon. In the meantime, dust off your own motivations and start getting back to what drove you in the first place. I believe that it will help you, and help me, make more of a difference.

Learning our ABCs: The making of the 21st Century Leader

Learning our ABCs: The making of the 21st Century Leader

Mark McCluskey, a professor at the University of Florida, recently shared in a blog post that the 2010 Edelman Trust Barometer concluded: “Although trust in business is up, the rise is tenuous.  Globally, nearly 70 percent of informed publics expect business and financial companies will revert to ‘business as usual’ after the recession.” In 2009 The Marist College Institute for Public Opinion in 2009 conducted a poll that found: “More than 75% of Americans said the moral compass of corporate America is pointing in the wrong direction.”So what? Does it actually matter whether corporate leaders have values?

Until recently, we might have said, “No. Not really.” When the CEOs of General Motors, Ford and Chrysler are providing shareholder results, we haven’t really cared whether or not they are using the corporate jet for short business trips. “Why not,” we would say. He’s “delivering results.”  And there-in lies the problem of the culture that created the current situation. For example, when success for Merrill Lynch or any of the other major investment firms correlated entirely with financial outcome and the ability to make quick decisions, we get what we pay for: CEOs and top executives who do whatever it takes to keep shareholders happy and bonuses astronomical. This CEO has to be efficiency-minded, execution oriented and persistent in the face of adversity in order to keep feeding the beast of “return expectations.”

So if the “current” leadership helped get us into this mess (with our support by the way), what will the “new” leadership  need to look like in order to get us out of it? Of course this new leader will still have to deliver results. In fact, with the current economic status on Wall Street, it would appear that now more than ever we need results-oriented at the top in order to turn around the current business outlook. The question then is not “What?” The question is “How?”  And more importantly, what have we learned from the current situation that can guide us in the future?

Integrity is the Bottom-Line

Why are we so eager today to vilify the American CEO? The heroes of yesterday have suddenly become villains. Everything from use of corporate assets to items on individual expense reports has become the topic of numerous talk shows, editorials and news articles. Think about it. What upsets us more than anything at this moment is that we trusted our leaders to handle our affairs, to lead their businesses, and to make investment decisions with our best interests in mind. We’re not just poorer than we were yesterday, we’re offended. In some ways we are hurt that we could have allowed this to happen. And somewhere deep in our psyche, we are also feeling guilty that we didn’t ask the right questions to begin with. We are the ones who supported these leaders from the start and now we are having to pay consequences we never expected to pay.

The CEOs of the future are going to have to be people of both intelligence and integrity. These future leaders have to focus on building confidence in the minds and spirits of their followers.  This means that the leaders that move us out of this mess will have to not only have the intelligence to focus on results, but the integrity to do it in a way that builds confidence and faith in the leader and his or her decisions. Leaders with integrity are consistent, willing to trust others and care about their well-being. They are honest and transparent in a way that allows others to see not only their decisions but the reasoning behind their decisions

Leaders with integrity also are accessible to their followers and observers. Many of the crash-and-burn leaders of recent past have been unwilling and unable to hear or act on feedback. Leaders with integrity are also skilled at what they do and are willing to be held accountable for results without blaming and complaining.

Perhaps most challenging, a leader with integrity has a self-awareness that creates a link between the leader and the reality that is experienced by customers, shareholders and employees. Contemporary CEOs will need to have a realistic view of their own strengths and weaknesses and be open to those in the process of their leadership.

There is no question that, to turn things around, some difficult and sometimes brutal business decisions will have to be made.  And ultimately, without financial profitability, the future CEOs can be the greatest people alive but have nothing to lead! These CEOs will have to deliver results with an unprecedented commitment to openness, transparency and the engagement of others.  Integrity builds confidence. And confidence will be a key to the success ..