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John Jantsch: You know, leadership might be the hardest job for an entrepreneur. You’ve got to decide that you want that job, you have to understanding that it’s an obligation, and let’s face it, it is hard work everyday. It’s not for the meek.

In this episode of the Duct Tape Marketing podcast, we are gonna talk about the leadership contract and everything that you need to do to make leadership a part of your culture.

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Hello, and welcome to another episode of the Duct Tape Marketing podcast. This is John Jantsch and my guest today is Vince Molinaro. He is a business strategist, author of three books, including the book we’re gonna talk about today, The Leadership Contact: The Fine Print to Becoming an Accountable Leader. So Vince, thanks for joining me.

Vince Molinaro: Thanks so much John for the opportunity.

John Jantsch: So let’s … So often there are keywords in the titles of books that need to be unpacked a little bit. Let’s unpack this word, “contract.” What exactly is a leadership contract?

Vince Molinaro: Well, it’s really came about from working with a lot of my clients globally who had been investing a lot in leadership development, but not see it translate into stronger leadership within their organizations. And they were kinda saying, “What’s going on?”

And as I spent time really thinking about it, I think what I believe we need to do is help leaders understand that when they take on a leadership role, they’ve actually signed up for something really, really important. And I kinda use the term, it’s a contract.

But, a lot of leaders aren’t really consciously aware that they’ve done it. And, in fact, what I think many of us have done either to get the promotion, to get the increase in pay, to get the better title, is it’s more the analogy of an online contract. Wen you kinda are online conducting any transaction that window pops up with all the terms and conditions, and if you’re like 93% of the people on the planet, as studies show, you just kinda click “agree” and never read what the contract actually entails and what you’re really held to.

So, the contract says essentially that. That there is a contract, you gotta be aware of it, and it comes with four terms and conditions that you’ve gotta understand and internalize as a leader.

John Jantsch: So before we get into some of those, you don’t pull many punches in this book. You call people out that leadership is broken in a lot of organizations. Is that because of some of the things you allude to? Is that society? Is that people really misunderstanding what it means to be a leader?

Vince Molinaro: Yeah, I think that’s exactly right. It’s, to me, that that’s what is the most fundamental question I find I have with my clients is what does it really mean to be a leader today? Because the role is more complicated because our world is more complicated. Leaders are under more pressure, more expectations.

So the role has gotten bigger, more challenging, but I don’t know if we’ve really kept up with our thinking about what is it that I need to do individually, or what do we need to collectively as a group of leaders, to really lead our company. And I think we’ve got some baggage from the old days when we used to promote people because they were good at something technical. Best sales person, best analyst, best accountant, best engineer, whatever. Or because they stuck around the longest. They had the most tenure. And we would move people into leadership roles for those reasons, but not because they were great leaders.

And so today, because the role is so demanding, I think we gotta pause and think a little bit about what have you signed up for.

So the book is pretty direct. It does challenge people in leadership roles. And yet what I have found in all my work, and my talks with leaders everywhere, is they’re really resonating with it because they acknowledge, yeah, it is a tough job. I can’t go into it lightly, I have to really pause, and I have to make sure it’s right for me. And if it’s not then I need to kind of find another way to add value to my company.

John Jantsch: Well, and I think that’s a real challenge because I work with a lot of entrepreneurs and people that get started because they have an idea, or an ability to do something. And they, in some ways, didn’t really sign up to be a leader. They don’t like that part of it and they’d rather they didn’t have to do that. But, in a lot of ways, that’s the job, right?

Vince Molinaro: Well, exactly right. And that’s sort of why the first term of a leadership contract is that it’s a deliberate decision that you have to make. And you have to know yourself well enough, know what the role demands, what the company demands of you, and then make sure that you’re up for it, right? Or make sure you’re really ready to do what’s necessary to really step up effectively.

So I think in those instances that that is a decision that one does need to make. But, you know, the expectation now … What’s interesting is, we’re expecting everyone to be a leader, even employees. I’ve got a lot of clients that say, “No, we need everyone to step up.”

So that expectation is being put across. So I don’t even know if we have that, “Wow, you know, I wanna do this, but not that.” I think that is true in some cases. But, I think we gotta understand that we’re expecting everyone to step up in more significant ways, because I think that’s what companies need to be successful today.

John Jantsch: Yeah, and sort of with that though, we need to sort of break down the idea of the hierarchical leadership I suppose. And if you’re talking about everyone needs to be a leader, I mean that’s like describing the culture, isn’t it?

Vince Molinaro: Yeah, that’s a great point. You know, that’s the other variable here is that the model of leadership has really shifted and evolved. So, certainly when I started my career years ago, it was a very hierarchical model. And the leadership strength was concentrated at the top, and they were the ones that kinda came up with the strategy and communicated the orders. And everyone else just kinda did their jobs with their small teams, and that worked for a long time.

But, in today’s world, what our clients really say is, “The world is more complex. One or two years at the top isn’t enough. We need leadership to be strong in every seat, every chair in our organization.” And that’s I think because, as you say, I think that model of leadership has really evolved and changed, and keeps evolving and changing.

John Jantsch: Accountability is a huge theme in your book. And, you know, as I read the book I was kinda struck with the point that I don’t know gets made enough by a lot of people in that accountability works both ways. That the leaders have to be accountable, but then they have to really demand, or at least expect, accountability in return.

Vince Molinaro: Yeah, I think that’s the other part of the leadership contract that is theme of so much of the books that are written, and there are some great books written about leadership, really try to map out here’s what the great leaders do. And that stuff is important to know and understand, but when you really come down to it I think this connection between accountability and leadership is fundamentally there.

Human beings, that’s what we do, right? We see someone who we define as a leader, we hold them to a higher standard of behavior, that’s the contract. And if they don’t live up to that standard of behavior, like we see leaders involved in scandal or corruption, or bad behavior, we get frustrated, disappointed, and we immediately ask for accountability. That person needs to account for their behavior.

So I think that connection has always been there. I don’t think it’s necessarily a new idea that I’m bringing forward. But, I think we have to make accountability now more front and center in leadership. Because as you say, those two things are really connected closely together. And I have to … In the leadership contract is my contract with myself to be an accountable leader, but then I have to set the tone for others and demand accountability in those that I work with and those that I lead.

John Jantsch: Yeah, and it’s a tough job as a leader, of course, because you can’t get away with the “Do as I say, not as I do.” And I’m sure many, many people have worked for organizations where that frustration was felt because we were supposed to be a customer-first company and boss does nothing but complain about the customers, and that makes it really tough to do your job, doesn’t it?

Vince Molinaro: Well, I think we’re always looking for our leaders, or looking to our leaders, to set the tone. And then when they sort of come up with, you know, different rules for everyone else than themselves, then they’re not being accountable. And we can kinda sniff it out. And I’ve always found interesting little kids. When they’re four and five, they’re really good at calling out adults, right? They’re saying, “Wait a minute, that’s not fair. You’re asking me to do this, but you’re not doing it yourself.”

And so I think it’s, again, hard wired in us as humans that we kind of demand that accountability and we demand that integrity between this is what you’re saying we need to be doing, and yet you’re not doing it yourself. Well, that doesn’t make any sense. So I think that’s just hard wired in us.

John Jantsch: So, you’ve alluded to a couple of the elements. Make the decision, hard work ethic, we’ve talked about, obligation. The one that I think is really intriguing to me is your fourth element is community. So, I didn’t mean to steal your thunder there with the four things, but if you wanna lighten those up a little bit and then maybe expand on that idea of community.

Vince Molinaro: Yeah, well as you said, the first term is you’ve gotta make that decision. That kind of visceral decision to define yourself as a leader and know that you’re kind of all-in and fully committed.

The second one is, it comes with obligation and you’ve gotta live up to those obligations because we expect a lot from our leaders. We’ve talked about that.

As you said, the third one is that it’s hard work and you’ve gotta have the resilience and resolve to tackle the hard work. And a lot of the hard work is around the people stuff, right? Giving candid feedback, managing poor performers, making tough decisions that might be unpopular for you but important for the organization and you must do it.

And then the third term says that leadership is a community. It gets back to what we talked about. It’s the model of leadership has evolved, you know? And while companies might still organize themselves as a hierarchy, how we get work done now is less vertical and much more horizontal. So we’re working together across lines of business, across departments, across functions more than ever before. And that’s because, I think, our problems are more complex that we have to solve. The customer issues need different perspectives and we’ve gotta bring the best minds together.

The Corporate Executive Board has done some research and surveying among leaders, and they’re reporting that collaboration has gone up 60% for most leaders day-to-day, and that more and more what I need to be successful is less on my own effort, it’s more on what does John do to make my team successful? What does Mary do to make my team successful? We’re much more dependent on others for our own success.

And so, as a result, the idea of building a strong leadership culture where leadership is not just strong at the top, but across the whole organization, becomes more and more critical. And so this idea of a community is really, I think, the model of the future and that’s really what I talk about.

And in many ways, that’s kinda the promise of the leadership contract is to say, “You gotta get your leadership act together,” and then you kinda commit to making the community strong. Do your part, but work with colleagues across the organization to execute the strategy, to be agile, to drive innovation, all those things that companies are really working hard to drive and be successful.

John Jantsch: You know, it’s funny. The last few years there have been a lot of management consultants charging a lot of money to train leaders how to work with this next generation of workers coming in, the millennials coming in. And I think what you just described is really that. That that’s actually just become a preferred way to work and so a lot of organizations have been caught off guard because they haven’t worked that way, and it’s been tough for them to attract or keep folks that want to work that way.

Vince Molinaro: Well, I think it’s a great point. I think what has also been missed, right, because you know the millennials have gotten a lot of attention. And I think, sometimes, there’s been what I call a lot of “millennial bashing,” right? We’ve been kinda pointing out that they’re not motivated, they’re not this, they’re not this, they’re not that. We’ve … My team and I have done global research and leadership accountability is a global problem. And it’s not as … Leadership is not as strong, nowhere near as strong, as we need it to be. And it’s in fact, quite mediocre.

So now, imagine a millennial coming into a company who has high aspirations to kinda wanna change the world, have a real impact, and now they’re working for a leader that is mediocre. Well, of course their motivation is gonna be affected. And what millennials have done that we don’t really, I think, fully appreciate is unlike Gen X and even Boomers, they’ve come in expecting to work for great leaders. And when they find a great leader, they’re actually fairly loyal. And, you know, they may not be there for 20 years, but you can really, you know, get a lot from them. And they’re prepared to roll up their sleeves, and be pretty loyal, and pretty committed, and do great work.

But, if they don’t find it what they do is they leave. And I think Gen X did a little bit of that, but Boomers just stuck it out no matter how bad it was. And so that perpetuated a lot of mediocrity, a lot of bad leadership, because we never were forced to pay attention to it.

I’m really curious to see, because you know the research just came out in the last few weeks from Bloomberg that says that next year, in fact, Gen Z, Generation Z, is actually going to outnumber millennials. And so as they start coming into the workplace, it’ll be curious to see what happens. Because to me, that generation actually should be called Generation L. They should be called the Leadership Generation because they’re coming in to organizations already with ideas and thinking around leadership, more leadership development, more expectations of leadership than any other of the previous generation. So it’ll be curious to see when they come in. They’ll just kinda, “What’s all this talk about leadership?” Because they don’t know any other way on how to behave. They know how to network, they know how to collaborate like millennials. So, I think that’s gonna be another change in our workplaces over the next decade as both millennials and Gen Z start making up more and more of our employee base.

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So, if I’m listening to this and I’m a leader of any type, but certainly a lot of my listeners are running small businesses, are there some best practices for getting this thinking started? I mean, it’s tough. If you’ve run your company a certain way for 10 years, and then you read this book, and you go, “Okay, now I’ve got it.” It obviously becomes a process, doesn’t it? I mean, it’s not an overnight start.

Vince Molinaro: Yeah, yeah. Well, you know, I think what’s really interesting is that’s where a small- to medium-sized enterprise actually has a lot of advantage over large companies. I’ve been in a couple of … I’ve been in three startups in my career and what I find is that oftentimes you just get naturally strong leadership because there’s an idea from the founder, from that entrepreneur or business model that’s really compelling. It just attracts people to say, “I wanna work with this person.”

And so, the early days are actually pretty easy and the best practices are always kinda in place, right? And I remember I joined a pharma company that was just starting out, a pharmaceutical company, and my first day on the job the head product manager came to me saying, “Okay, here’s how we work.” We had our pixelated and our five values, so you gotta live up to these five values. And how we worked everyday is you’re coming into a meeting, we’re not taking any notes, there’s no minutes, your job is to hear what’s going on, figure out what you need to do, and get it done. That’s how we go. Let’s go. And that was it.

And yes, there was everybody that was there in the early days were just so aligned and committed to those core ideas that we got … we grew really quickly until we hit about 150 employees. And as the research shows, that’s a funny number with human beings that once you hit that number then all of a sudden you start actually behaving like a pretty big company. Start getting a bit more bureaucratic, more process and rules get into place. You need that in order to hit your next level of growth.

And so the thing that I suggest in the book, I think, apply. The first thing is, you’ve gotta respond individually. You’ve gotta commit to being an accountable leader. Can really think about what that’s gonna look like. And then as an organization, you have to define what are the expectations we have of our leaders. What are the three, four, five things that we expect leaders to be and do in our company? You gotta really articulate that clearly so you can attract the people who are aligned to that vision. And then you can kinda start identifying who are the people demonstrating that so we can promote them. And that becomes important.

So it really gets down to that. In fact, our global research has found only about half of the companies have set clear expectations of their leaders. And so, if you do that as an entrepreneur, it already sets you apart from the rest.

And then the other thing that needs to happen is the opposite. So the expectations kinda set the vision of the future which inspires. But then, if you find leaders who are mediocre, who just are struggling interesting heir role and they’re not really stepping up, you gotta address that. You gotta address that. And what our research has also found, it only … One in five, about 20%, of the people who responded to our survey globally said that their organization had the courage to address the mediocre leaders. And so what they do is they say in conversations they say, “Well, we know who they are. We just don’t know how to do anything about it, so we’ll just leave them in their job.” And the second you leave a mediocre leader in their role, you’ve communicated to everybody that mediocrity is fine. You’re gonna tolerate a low bar. And then, that just puts you on a slippery slope which becomes a problem.

So, I think you gotta make that decision yourself to step up and be an accountable leader when you’re an entrepreneur and a business leader. And then, you gotta set those expectations for others. Create them for your company so you attract the best, those who really aligned already to your way of thinking. And that already will set you off a direction that will be pretty compelling and exciting for even a small company.

John Jantsch: And I think you just probably nailed one of the hardest parts of the hard work is that idea of something that feels confrontational. A lot of times it’s just easier to not have that hard conversation. And I agree with you 100% that that just sort of festers, doesn’t it?

Vince Molinaro: Well, it does. And what it does is it slows us down. So in the book, I talk about the hard rule of leadership that says that what we don’t often appreciate as leaders is that when we avoid some of tough things, and they’re legitimately tough, right? Running a successful company is not easy. There are tough things. But, when we avoid those tough things, and we know a lot of leaders do, we don’t fully appreciate how it makes us weak as leaders, weakens our teams, and weakens ultimately our company. But, if you have the courage to tackle those issues and make progress, you really drive greater success.

Because if you don’t address those things, they kinda weigh you down. They’re always kinda like you’re carrying this big boulder on your back and on your shoulders, and they just kinda wear you down. But, if you chip away at them, you kind of lighten the load.

John Jantsch: So let’s finish up today making the correlation between this type of accountability, this type of leadership contract, and improved performance. Certainly, your work has hopefully returned some correlation.

Vince Molinaro: Yeah, well in fact our global research has revealed that … We surveyed over 3,000 organizations worldwide and we asked in the survey to self-identify … the respondents to self-identify is your company … talk about your company’s performance over the last three years. And in the last three years, were you an industry leader, top quartile, were you above average, average, below average, or a lagger at the bottom quartile?

And when we analyzed the data it was fascinating. The industry leaders completely set themselves apart from everyone else. What was most surprising, even above average performing companies, which are pretty good, look more like poor performing companies than they actually look like industry leading companies. So when we cut the data to compare everyone else against the industry leaders, we found that the industry leaders are far more satisfied, over two times more satisfied, with the leadership accountability in their companies.

They’ve done a much better job, almost two and a half times better job, of setting clear expectations for their leaders. And, in turn, they have over two times more satisfaction, or confidence, that they have more leaders fully committed to their roles as leaders. So we’re really starting to see a strong connection between having really strong and accountable leaders in place, and a company’s performance. We’re gonna be doing more research to really delve into that, but already we’re starting to see that connection.

And in many ways, it makes perfect sense, right? If you have a group of highly mediocre leaders, they’re never gonna get you there, right? Just the math will never work. And so that’s, I think, what’s becoming more and more apparent is we pay a price for tolerating mediocrity.

Now, a lot of leaders don’t necessarily choose to be mediocre. They’re in conditions that are [inaudible] or the company hasn’t set clear expectation, or they’ve never been supported in their development. It’s not all on leaders. And that’s why I say there’s things leaders obviously must do, but the organization and the companies must support them as well. You need that dual responsibility.

But, that connection is very clear in my mind now between strong accountability among leaders and company performance.

John Jantsch: Speaking with Vince Molinaro, the author of The Leadership Contract. So Vince, where can people find out more about you and your work?

Vince Molinaro: Certainly they can reach out on LinkedIn. There’s also www.theleadershipcontract.com. And on there is really the information about the books, the information about the work I do, and a number of resources that people can download to learn more about how to bring these ideas into either their roles, into their teams, and into their organization.

John Jantsch: Great book, Vince. Thanks for joining us, and hopefully we’ll see you out there on the road someday.

Vince Molinaro: Well, thanks for making time, John. I really appreciate it and some great questions. I had a lot of fun. Thanks so much.