Leadership is a Covenant, Not a Contract

January 16, 2018

In previous blogs I introduced leadership as a covenant. Some folks struggle with that concept because today we tend to make covenants and contracts synonymous and they’re not.

Webster’s defines a contract as “a binding agreement between two or more people to do something, one formally set forth in writing and enforceable by law.” Legal experts tell me that contracts involve an offer, acceptance, performance, a promise to pay (consideration) for performance and a period by which performance is completed. What I find interesting is that the same dictionary defines a covenant similarly, “a binding and solemn agreement to do or not do something, a compact, agreement, a formal, sealed contract.”

What is the Difference?

I believe the definitions are similar because we’ve lost the language of covenant in our society. There are lots of reasons for this, but suffice it to say that covenants are quite different than contracts just as leading is quite different than forcing compliance. Covenants are far more complex and interpersonally demanding than contracts, but they also promise far more benefits and rewards.

By these differences, I’m not suggesting that contracts are inherently bad. On the contrary, contracts are an integral part of every day life. However, considering our frequent use of contracts, it’s important to understand their limitations, particularly related to leadership. First, they encourage people to negotiate terms based on their own self-interest. Consequently, as contracts are executed, parties tend to evaluate relationships based on the performance of the people around them. Second, if someone’s self-interest is not being served, then that constitutes justification for either breaking or renegotiating the contract. Finally, relationships defined solely by contractual terms can and often do breed mistrust and commitment only to self.

The Importance of Good Faith

Yet, none of that defines leadership. In fact, most lawyers freely admit that to make a contract work, requires an underlying basis of “good faith.” That “good faith” is how leaders move beyond mundane contractual obligations and actually begin to lead others in powerful ways. Unfortunately, many organizational heads (notice I didn’t say leaders) miss this. They live in contractual cultures that commodify and mistrust people rather than empower them.

Conversely, covenant cultures assume good faith and trust towards individuals. This does not suggest that leaders need to be naïve about relationships. Certainly, at times there will be individuals who operate in bad faith, and it will be necessary to deal with those “bad faith” people appropriately. That said, it’s important to understand that just because a few people operate inappropriately, does not justify leaders mistrusting everyone.

Dealing in good faith actually requires trust, which is usually initiated and earned by leaders, as they empower people (not control them) to do their jobs. However, for relationships to work and be productive, eventually everyone must embrace trust. There simply cannot be good faith in a culture lacking trust. Consider marriages in which partners don’t trust each other. It sets up anger, frustration, jealousy and eventually breakups. We understand those dangers in marriage, but many people lack that same understanding inside organizations.

Covenants are Relationally Binding

That’s why effective leadership involves more than meeting contractual obligations. While contracts are binding legally, covenants are binding relationally. Research demonstrates that people are best led relationally. That’s because contracts deal with law and covenants deal with the character, values, and mutual goals of the people involved. I believe the failure to differentiate between the two concepts contributes heavily to our leadership crisis.

Again covenants can actually be far more relationally demanding, but they’re also far more flexible, powerful and rewarding than contracts. They’re also necessary for maximizing potential, a topic we’ll discuss in future blogs. As fundraising consultants, we counsel our clients to the extent possible to build covenants with volunteers and donors.

“I really support The Covenant Group’s strategic planning process because their approach encourages staff-based support with board buy-in, and I felt that was important given what we were trying to achieve. The outcome is an effective plan that builds consensus and provides a clear sense of direction.”
- Jennifer Scott, Director of Development - The Cabbage Patch Settlement House

“The Covenant Group is highly competent, very experienced and knowledgeable. They provided a broad perspective by equipping us with useful data…and best practices in the field. All in all, they are excellent.”
- Dan Jones, CEO - 21st Century Parks

“The campaign has truly been a miracle. People were committed from the beginning, but…even raising $650,000 seemed like a stretch. To nearly double that amount is incredible! When the plan they developed allows you to hit a goal like that, it builds such a sense of community. The momentum built by the campaign is spilling outside the walls of our church and benefiting others in the process.”
-Father John Hollowell - Annunciation of the Blessed Virgin Mary Catholic Church

“For those of us who don’t do this everyday, The Covenant Group instilled confidence in us. They helped us get through the fear and apprehension by providing us with a process, training and motivation. They taught us and helped us plan in a way that was for the better. We have built lasting relationships with donors and we will continue to steward these relationships long into the future.”
- Sue Finke, Director of Institutional Advancement - Covington Catholic High School

“No one anticipated we could raise this amount. Even the Archdiocese is surprised. The funds raised represent about 15 times our annual giving. But it’s not just the financial results. People stand around talking more than they did before the campaign. There is also a renewed and energized spirit among the parishioners. It’s the most exciting thing to happen in our parish in the last 100 years.”
- Gary Libs, Campaign Co-Chair - St. Mary of the Knobs Catholic Church

“The Covenant Group’s process involved a lot of people in our congregation doing small tasks … that built ownership. They took our vision and put it into a concrete plan. They helped us understand the importance of making our vision clear and laid out the steps to make the vision a reality. Their process built consensus and showed people how they could help. Their methods are based on a solid theological foundation that includes key documents, prayer support, and requisite training … all of which were invaluable.”
- Daniel Montgomery, Pastor - Sojourn Community Church

“Everything The Covenant Group did to help us…in the initial stages was helpful…the development of the case statement; our materials; the training of our Board members; strategies; all these steps laid the foundation for eventual success. They brought such a high level of professionalism, a wealth of experience and a strong track record of integrity and success… just being associated with The Covenant Group helped us.”
- Nancy Doctor, Development Director - Wellspring

“The structure The Covenant Group provided was excellent. It allowed our members to use their God-given talents to benefit the church community They helped us develop a plan and identify key leadership candidates to chair the effort, as well as engaging between 80 to 100 people to carry out the work of the campaign. It was truly a whole congregation effort and The Covenant Group helped facilitate that. They helped us reach our full potential as a congregation.”
- Ron Poisel, Pastor - Christ Lutheran Church

Leadership is a Covenant, Not a Contract

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