This is not a new concept and it has been around since the 17th century when writers such as Locke and Rousseau began to explore the relationship of the individual to authority. They examined how an individual would cede certain individual liberties to a governing authority in exchange for that authority providing certain things like the enshrinement of those rights and the provision of a level of order. They called it a social contract which was either explicit (a constitution) or implicit and the understanding was that one exercised authority only at the consent of those being governed.
While this is admittedly a political concept the fact is that it can be applied to leadership in general. Its application can range from informal settings such as a group of friends to more formal settings like teams and certainly to business. And it is a leadership absolute.
What are the components of this absolute and how does this impact you as a leader? First and most importantly it is based on the premise that those you lead have value. Value not only in terms of what they bring to the group or business but value in terms of who they are as individuals and what that means. What are some of the features that make up the value of the individual?
People are more than the sum of their resumes. You hire someone for certain skills which of course is the point. They come though with far more than those skills. They come with a desire to learn, to grow, to contribute, to be recognized, to be provided with direction and feedback that is timely and as people who are wired for community they desire to have that community acknowledge their value beyond their skills to the whole person that comes with that package. In short our people are not commodities or assets to be used and then discarded.
The social contract subscribes to two principles; people have an inherent worth that must be respected and those in authority act as trustees of that worth and lead accordingly. In a political setting when that social contract is violated sufficiently those who are governed rise up and replace that government. In business when this happens they leave. They leave in one of two ways; literally or they just check out emotionally and productively. Either scenario is costly.
The expression of this social contract in business can be seen with good leaders igniting staff to new levels of engagement and productivity or bad leaders driving truly good people out. People have figured this out and now companies rate leadership on things like employee retention or satisfaction. Of course that is only one measure but folks are getting the message.
Think about it this way, you may get promoted into a position of leadership and have the ability to exercise whatever authority comes with that but you will never truly lead unless you have at least the implicit consent and support of those under you. We all know that those who treat staff poorly can get away with it for a time but sooner or later it will catch up to them either in poor productivity or high turn over. Remember you lead by social contract - do right by them and they will do right by you.