Leadership makes a Difference and Effective Leadership is a Covenant

by Leonard J. Moisan, PhD of member firm The Covenant Group

CEOs and Board members frequently ask us what it takes to be successful at advancing an organization’s mission or maximizing capacity through fundraising. Is it the compelling vision, the social media efforts, the brilliant plan and strategies, the accomplished solicitor or the compelling video? I’ve heard people suggest that fundraising success depends on the economy, the type of organization or the people who are served.

Certainly all of these things influence success in fundraising and mission advancement, but when I thought about the subject for my turn at the blog, I found myself dwelling on one variable. Based on our experience we have found that leadership has the greatest influence on success or failure. That’s true for both fundraising and mission advancement. It may sound trite, but the more clients we serve the more we find that their success or failure depends on leadership. But what kind of leadership is it, and what does that term really mean? 

At any upscale bookstore these days, it’s fairly easy to find a wide variety of well-marketed, attractively packaged books on leadership—leadership laws, leadership habits, leadership secrets and more.  In one store alone, I counted more than twenty different titles with the word “Leadership” in them and dozens more on subjects related to leadership.

With so much literature available on the topic, one might assume that we have a pretty good grasp on the essence of leadership.  But, even a cursory view of the nightly news demonstrates that in reality, quite the opposite is true. Almost daily we are confronted with stories of people entrusted as “leaders,” who violate that trust with breaches of integrity. A business fails because of illegal accounting practices … a CEO is implicated…a senator cheats…a spiritual advisor breaks his wedding vows…a nonprofit executive is indicted…they are all haunting reminders of people who were entrusted as leaders but failed. Why is it that we see record numbers of books about leadership on our shelves at the same time we see record numbers of leaders failing on our television screens? Is this type of inconsistency truly that pervasive, or is there another explanation?

I believe that we hear and read so much about leadership because we are in the midst of a leadership crisis.  This crisis is not limited to business or political realms.  It is evident in our homes, our colleges, our communities and even our places of worship.  Simply stated, people are deeply interested in leadership because they long for it but rarely see it. And when they do experience leadership at its best, it inspires them to follow. Clearly that’s what we have seen in the best nonprofit organizations both from board members and executives alike. Unfortunately we have also found that leadership isn’t so common, and because it is lacking it puts some very worthy organizations in great peril.

Well, if leadership is really that rare, then what do we call the many organizational heads we normally refer to as leaders? Some, like James MacGregor Burns, call them power wielders.  Others, such as the late Peter Drucker, refer to them as managers and in some cases even misleaders.  The point is that, whatever we call them; there is a big difference between being the head of an organization and being a leader.

Ultimately, real leaders are known not only by what they accomplish, but also by how they accomplish it and how they influence people in the process. Our community in Louisville recently lost one of these leaders, who passed away unexpectedly. Owsley Brown was the kind of leader who could get people to the table and help solve pressing problems. This former Board chair of Brown-Forman Corporation used his resources unselfishly to improve the quality of life for a great number of Louisvillians. I had the privilege of working with Owsley on several projects and his humility and benevolence enabled him to lead in ways that engaged people and advanced the missions of many nonprofits. Owsley led well because he related well with people and he served with a generous spirit. He certainly didn’t have to do all that he did, but he got involved to make Louisville a better place to live for everyone because he cared. And because he cared, he also had credibility as a leader. That really is the point.

In reality, leadership is far more about relationships, influence and methods than it is about achievements. For example, the very best board and executive leaders with whom we have worked, lead by example in just about everything they do. As a result of their leadership, they have built credibility that also builds capital for the nonprofits they serve. This is also true of nonprofit CEOs and Board members alike. However, the unfortunate mistake many nonprofits make in selecting people to serve on their board is that they concentrate solely on “achievement” and the power that accompanies it, sometimes at the expense of character. Not that achievement and character are mutually exclusive, but in assessing the potential of a leader it is important to consider both dimensions

Certainly, achievement is a by-product of leadership, but a resume is a poor tool to use if you want to capture the true essence of leadership.  It simply cannot be found in the results of a performance contract, increases in profit margins or growth in share price. Rather, leadership resides in the dynamics of relationships between leaders and followers.  It is found when leaders and followers relate to each other in ways that go beyond basic contractual obligations. No doubt, contracts help facilitate achievement by defining the legal parameters, performance expectations and working conditions of a given relationship. But contracts cannot motivate or inspire followers, nor can they facilitate their growth. Those are the responsibilities of a leader, responsibilities that extend well beyond the basic requirements of a contract.

In just about any field imaginable relationships are the key to success.  The best teachers forge strong relationships with their students; the best singers and actors connect emotionally with their audiences; the best coaches bond with their players; the best fund development people relate well with their donors and the best leaders identify with and engage their followers. More than one expert has pointed out that during the Kennedy-Nixon debates, John F. Kennedy may have actually lost the debates on substance.  Yet, President Kennedy was an overwhelming success and actually went on to win the election because he was able to connect with the American people.  This president certainly was not without his flaws, and history has revealed that his tenure in the White House clearly had its problems.  But as a leader, President Kennedy identified with his followers, and they identified with him and, as a result, they were willing to follow him.

Like President Kennedy, effective leaders are able to connect with and engage followers emotionally in relationships through which they pursue common purposes and achieve common goals that are larger than those of any one individual.  In so doing, leaders are also able to provide meaning and hope for the people they serve in ways that create high levels of synergy, productivity and fulfillment.

When he came to America from France in the 1830s to observe our unique form of Democracy, social philosopher Alexis de Tocqueville observed that, “A similar covenant exists in fact between all citizens of a democracy; they feel themselves subject to the same weaknesses and the same dangers; and their interests, as well as their sympathy, makes it a rule with them to lend each other mutual assistance when required.”

At its core then, leadership is a relationship in which leaders and those being led are connected and emotionally engaged in pursuit of common purposes.  It is much more complex than a simple contract.  Instead, leadership is a covenant between leaders, the people being led and the organizations they serve. That kind of a relationship binds them together in a common quest, demands their “mutual assistance” and enables them to achieve far more than they ever would on their own. When nonprofits are fortunate to be advanced by this kind of a leader, they are usually able to achieve high levels of success.  

So why does all this matter or, more to the point, why study leadership?  The simple answer is to help us get better at it and thereby help our organizations prosper.  That certainly is my intention in writing this article. However, my belief in the importance and power of leadership is not just based on anecdotal evidence.  There is a growing body of empirical data suggesting that leadership really does make a difference, and relationships do matter in the bottom line success of any enterprise.  For example, in Good to Great, Jim Collins showed how companies with certain kinds of leaders outperformed the general stock market by an average of 6.9 times.  A decade earlier Frederick Reichheld demonstrated in The Loyalty Effect how improving loyalty in customer and employee relationships can add 25 percent to as much as 100 percent to a company’s bottom line profitability. These represent just a small sampling of the growing body of work that points to the efficacy of leadership and the bottom line profitability of strong relationships. And during these challenging economic times, nonprofit organizations that serve people who are struggling need this kind of leadership more than ever.

Beyond the formal process, my study of leadership has also been a personal journey of growth that I believe has helped us serve our clients more effectively.  It is a journey that began in a very ethnic neighborhood on Chicago’s south side. Called Canaryville, this mostly Irish and Italian enclave was home to many 1st generation immigrants who came to America to build a better life.  There were Caseys, Kellys, Murphys and Flynns, but there were also DeMarcos, Cariottis, Dilabertos, Moraleses, Garcias, Jackabowskis, Feldmans and more.  The neighborhood was truly a melting pot of diversity, but the people were bound together less by their ethnicity and more by their common struggle of trying to create a better life for their families. Living there taught me many lessons about leadership and helping organizations become more effective.

The people there worked mostly in blue-collar jobs in the trades, the steel mills, the Stock Yards or in one of the more coveted positions as a police officer, fireman or city worker.  It was a tough, densely populated neighborhood where people lived in framed single family or two flat homes that were in close proximity to each other.  As a result of all this closeness the people got to know each other and they clearly looked after their own.  When I was growing up as a kid, and engaging in occasional mischief that I thought was undetected; on more than one occasion by the time I got home my grandmother, father and the rest of the family would know all about my misdeeds.  No doubt, several phone calls had been placed by what I considered to be “nosy neighbors.”  Though it was annoying at the time, these people were assuming responsibility for the well being of the neighborhood by teaching us how to grow into responsible adults. That too happens in the best non-profits as people assume responsibility and choose to lead at all levels of the organization, not just at the top. They do so because they care, and because they care the organization gets their best and flourishes as a result. 

The closer I got to adulthood the more benefits seemed to come my way as a result of my being from Canaryville.  Of course, the primary benefit was knowing and being known by quite a few people.  Though I took that for granted and even disliked it at times, I believe those interpersonal relationships helped strengthen both my sense of identity and my security. Beyond that there were summer jobs, special deals, scholarships and other opportunities that I enjoyed, all as a result of the relationships that I or members of my family had developed. At a young age I understood that the more relationships I had, or as people used to say in Chicago, the better “connected” I was; the more benefits that would accrue to me.

Yet, I also knew that “being connected” was a two way, reciprocal street.  In other words, I couldn’t expect to enjoy the benefits of those relationships long term, unless I was also willing to give and serve the people of those relationships. To that point, my father would frequently remind me of my responsibility to the people and the organizations of the neighborhood.  As he used to tell me, I had to “save my favors” and not be greedy. That too is a principle that the very best nonprofit leaders understand. They and their organizations are involved and engaged as members of their communities.

Also, in the process of relationship building, I learned that I couldn’t be disingenuous or insincere because it was contrary to our values to try and use or manipulate people.  Relationship building with a sense of integrity and genuine regard for others had to come first. The benefits were byproducts of building relationships and not the primary motivator for doing so. The primary motivator was a set of values that defined what it meant to be a good Christian, a good citizen and a good friend.  In his own way, my father was both giving me a civics lesson and teaching me the value of establishing and maintaining covenants.  It is a learning process that continues to this day for me and in turn, I endeavor to pass on to my clients. Simply stated, the relationship, whether it’s with an individual donor, a client or a community can’t always be about you. If it is all about you, then the likelihood is high that you are not leading but power wielding and manipulating.

Essentially, what has facilitated that learning process for me is the fact that throughout my life and career, I have had the good fortune of meeting and interacting with a wide variety of people. Those interactions have helped me grow both professionally as a teacher, coach, entrepreneur and consultant, and personally as a student, friend, husband, father, volunteer, church member and more. Those relationships have also taught me a great deal about people and particularly about leadership, and hopefully they’ve helped me improve in both areas.  While many of my lessons have come as a result of mistakes I have made, each of my roles has helped me to learn something important about leading people and living life more effectively. But that too is an important lesson for organizations. They must ask themselves, “What are we learning, what must we do to improve and how can we better lead?”

Clearly, in some cases I had a natural inclination to learn more about how to deal with certain personality types and how to lead.  For example, as a coach I wanted to learn about motivating, encouraging and leading a diverse group of players to higher levels of achievement. My job was to develop the talents in the players entrusted to me and then help them bring those talents to the forefront in ways that contributed to team success.  It required knowing how to motivate players and then how to position them in the right roles, roles that would accommodate both personal and team growth and achievement. Again, and not surprisingly, this is also what I observed leaders doing in the best companies, the best churches and the best nonprofit organizations. The effective leaders I have observed are about developing and empowering others to achieve peak performance. When the Chicago Bulls were in their championship run, several players noted how they became better as a result of playing with Michael Jordan. Simply stated, the best leaders help others around them become more productive and proficient.

In fact, the preliminary observations I made about leadership were really what led me to pursue a more in-depth study and write a book about the dynamics of leadership in the first place.  Now, after more than 20 years of study and many more years of experience, I have learned some of the specifics of what makes a leader effective and why leaders can and do make a difference in the success of just about any kind and size of organization.  Whether it’s parents in a family, executives or Board members in nonprofits, pastors in churches or CEOs in corporations; the degree to which leaders operate within the context and apply the principles of a covenant will be the degree to which their people and their organizations are successful. To accommodate a bit more explanation about how I came to this conclusion, let me back up briefly.

My notion of leadership started to change somewhat in the early 1990s when I began studying both the concept and the power of close, dynamic and highly productive relationships called “covenants.”  Like most people, I understood the concept of covenant in the context of marriage, but I was fascinated to find examples of covenants existing in business, politics, sports, communities and just about every kind of organization I examined.  Though the evidence of covenants existing in organizations is less obvious than in marriage, I found that in organizations where the principles of covenant were applied in relationships, the results were highly beneficial for everyone involved.  That really is when I began realizing both that covenants are the result of leadership and that leadership itself is a covenant.  The more I investigated and discussed these concepts, the more they seemed to resonate with people.  Granted, it’s important for readers to understand that while the presence of covenants between leaders and followers or among stakeholders of an organization does promise to maximize potential, in business or in any other kind of organization; covenants cannot by themselves guarantee success.  True, covenants can greatly enhance the likelihood and the degree of success, but they are not a remedy for gross deficiencies. That point aside, I have also found it to be true that where covenants flourish in organizations, deficiencies are likely to be fewer.

In the course of my research, I have had several hundred separate discussions about covenants. Many of those discussions have been in the form of interviews with individuals from all walks of life including business executives, politicians, ministers, police officers, a fire chief, distinguished educators, sports figures, authors, line workers and just about anyone who would talk about the concept with me.

My first actual writing about covenant was in the form of an article published in the Indiana University Journal of Business Disciplines.  After I published the article, I started thinking and writing more about the idea of leadership as a covenant. That’s why I wrote a book entitled Leadership is a Covenant. I endeavored to make the case from my interviews and observations that leadership is a relationship and not a position and, at their best, leader-follower relationships are covenants and not contracts. What I found in studying nonprofit organizations and businesses alike is the fact that the principles of leadership transcend organizational type. In other words leadership advances organizations regardless of their type. Through this work I endeavored to describe more fully the characteristics and dynamics of a covenant and demonstrate how this relationship captures the essence of what it means to be a leader.

At the start of this article I noted that it has been our observation that more than any other factor, leadership is related to the success of any organization. Let me qualify that further by adding, that the most effective kind of leaders we have observed are ones who approach leadership as a covenant. It is a relationship that is driven more by integrity and giving and developing and growing than it is by receiving and exploiting. It is also a relationship that is less about consumerism and individual rights and more about civics and responsibility. These are the kind of leaders we need in businesses and nonprofit organizations alike, and these are the kind of leaders we encourage our clients to seek. They are not always easy to find because they are also usually a bit humble, but when they are uncovered these covenant-keeping leaders are well worth the wait.

Note: If you are interested in learning more about covenant leadership, Len’s book, Leadership is a Covenant, is available on Amazon.Com. 

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