Have You Signed The Leadership Contract?

March 16, 2015 By Vince Molinaro, Managing Director and Brad Beveridge, Managing Director, Knightsbridge

If you follow the news even just a bit, you will have noticed that it’s a tough time to be a corporate leader.

A CEO is ousted from his company after a video surfaces showing him kicking a puppy in an elevator. Another CEO is captured, again on video, dancing naked in front of employees. A CEO and CFO have reportedly disappeared, with all of their company’s money.

What is going on in corporations today? It seems that everywhere these days there are examples of leaders – politicians, the CEOs of multinational corporations – who are failing to live up to the roles and responsibilities they have been given. Many others have lost their way.

The source of these failures tends to vary. Some leaders are so focused on the pay, perks, and power that they forget to actually do their jobs. Others executives I often call the “empty chair” seem to be satisfied to perform an endless slide into mediocrity.

No matter how you cut it, we are living in an era of ineffective leadership. I’ve thought long and hard about why that is, and have come to a very simple conclusion: far too many leaders are not fully committed to the terms of leadership. 

These leaders fail to understand that when you take on a leadership role, you are actually entering into a formal, binding covenant. I call this the Leadership Contract.

These are the basic terms that all leaders, regardless of size or organization or sector, need to live up to in order to produce meaningful results and earn the continued loyalty of the people they lead.

It’s a lot like conducting an online transaction – downloading music, purchasing an airline ticket, or buying a pair of shoes.  At some point, a window with a long list of boring, exhaustive terms and conditions pops up, and asks us to “agree.”

We all know that if we accept those terms, we won’t be able to complete the process. So we all click ‘agree,’ with most of us never, ever actually reading the terms of the online contract.

I think it’s pretty clear that many leaders today have just clicked ‘agree’ to get the promotion, the bigger paycheck, the power and the perks without truly understanding what it is they’re signing up for. That has created many reluctant leaders who cannot effectively serve their organizations.

In my book, The Leadership Contract, I describe four terms that all leaders must fully understand before signing to take on a leadership role.

  1. Leadership is a decision. Make it. Sometimes, it’s all too easy for leaders to forget that leadership is ultimately a choice. All the great leaders I’ve worked with describe times in their careers where they had to make a conscious, deliberate decision to step into a situation and lead. But it is in these moments when you have to be honest with yourself: are you really the right person for the job? Will you be in over your head? Is this really the role you want to fill? If you cannot answer yes to all these questions, don’t sign the leadership contract. Find other ways to add value in your organization.
  2. Leadership is an obligation. Step up. Many leaders don’t appreciate the fact that leadership implies significant obligation.  In the end, it’s not about you - it’s about your customers, your employees, your shareholders and the communities in which you do business.  If you lose sight of these obligations, you will be thinking too much about how to advance your own career, and not enough on how to build long-term success.
  3. Leadership is hard work. Get tough. If you’ve been leader for any period of time, you know it is hard work.  You also know you need to be tough enough to guide your organization through rough waters. Unfortunately, far too many leaders retreat when the going gets tough.  They become bystanders or, worse, wimps who are afraid to tackle the tough work. Leadership involves having the courage to make difficult decisions about poor performers, holding people accountable, and delivering candid feedback.
  4. Leadership is a community. Connect. Older concepts of leadership have glorified the image of the lone wolf leader who endures the trials and tribulations of the job in isolation. While it may be necessary to stand alone in some instances, in the end it does not make sense to isolate leaders. The new model is about building a genuine community of leaders. Imagine being part of an organization where instead of isolation, you experience trust, support and mutual aspiration. That is a true community of leaders.

Using the Leadership Contract to making executive hiring decisions

The four terms of the Leadership Contract provides a practical and useful framework for evaluating executive candidates to ensure they are taking on new leader roles for the right reasons. Below I position several questions you can use to help access where a candidate is ready to “sign up” for a new leadership role.

Leadership is a Decision

  • To what extent is the candidate taking on a new leadership role strictly for the increase pay, prestige and perks that may come with an executive role?
  • Does a candidate truly understand what they are signing up for? Are they clear on what the organization expects of them and the value they need to deliver?

Leadership is an Obligation

  • To what extent does a candidate operate more from a place of self-interest, rather than organizational interest?
  • Do they have a “one-company mindset”?
  • Do they have a clear sense of their primary leadership obligation?

Leadership is Hard Work

  • To what extent is a candidate clear of the difficult challenges they will need to tackle in their new role?
  • Do they demonstrate resilience and a strong sense of personal resolve to be successful in their new role?

Leadership is a Community

  • To what extent is a candidate clear on the key relationships they will need to build in their new organization?
  • Are they clear on the expectations to set the tone for the leadership culture of the organization?

Being a great leader today is not easy. It certainly should not be a role to enter in lightly. The four terms of the Leadership Contract provides a useful framework to help both organizations, and candidates for executive roles, reflect on important leadership expectations and accountabilities before making decisions on critical executive positions.

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