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the importance of social contract team and how it can enhance your organization's productivity

Could your team benefit from a new social contract?

For your employees

August 2023 saw the annual Australian HR Institute’s (AHRI) National Convention and Exhibition held in Brisbane. Over the course of three insightful days, SG Fleet heard from a range of leading local and international experts, with one of the most thought-provoking discussions coming from executive team coach and best-selling author, Keith Ferrazzi, with his presentation: A Social Contract for Teams. 

Keith believes it’s time to get serious about empowerment if organisations are to succeed, especially with the entrenchment of hybrid and remote teams. 

“A new Social Contract for Teams is needed to escape mediocre or merely good performance, accelerate innovation and unleash growth in today’s volatile and changing world,” he argues. “Companies have traditionally emphasised leadership competencies, not team competencies.”  

In other words, what we’ve classed as great leadership over the last 30 years or more has led to us collectively losing sight of what it means to be a great team.  

As much as we’ve come to roll our eyes at phrases like ‘post-COVID’ or ‘post-pandemic’, Ferrazzi predicts, in this new paradigm of how and when we work, “the transformation of an organisation must begin with the transformation of its teams. We’ve over-indexed on leadership and all-but-ignored the value that lies in the interdependency of talent in teams.” 

“We need to think about the social contract of teamship—not leadership—to solve the most pressing problems we face as the world continues to become more complex,” he continues. “When teams commit to adopting highly collaborative behaviours that nurture psychological safety and build trust, we create a dynamic of constant and unbounded co-creation, where each interdependent team member shares responsibility for crossing the finish line together.”  

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The origins of the Social Contract for Teams

In a Harvard Business Review article published in late 2022, Ferrazzi released data his organisation had collected, based on research alongside companies such as Unilever, GM and Hitachi, as well as numerous start-up businesses over the better part of two decades.  

Among the findings, Ferrazzi writes that 71% of team members aren’t committed to delivering honest feedback to colleagues that could improve their professional capabilities and their organisation’s performance. 71% also believe their team doesn’t focus collaboratively on their organisation’s most pressing issues.  

The research also found that 74% don’t consider their team accountable for shared goals, 61% of team members didn’t believe their peers sought out development opportunities, (“presumably because people are overwhelmed by heavy workloads”) and 81% of respondents believe their team failed to operate at anywhere near their full potential.  

“Now, as we move into a softening global economy,” writes Ferrazzi, “behaviours like candour, close collaboration and peer-to-peer accountability are critical to a team’s ability to make difficult trade-offs [in order] to make room for bold innovation.” 

“Too often members have an unspoken agreement to avoid conflict, stick to their individual areas of responsibility and refrain from criticism in front of the boss.”  

It’s time for the people working in teams to take the gloves off when it comes to providing peer-to-peer feedback, be more accountable to each other, and come to the table understanding that such honesty is the driver of innovation and success.

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What are the fundamentals of the Social Contract for Teams?

In the Ferrazzi social contract, there are six practices underpinning its success: 

  • Collaborative problem solving  
  • Bulletproofing for better hybrid working 
  • Candour breaks  
  • Red flag replays 
  • Safe words; 
  • Peer-to-peer development in the form of open 360s 


Here’s how they play out:

1. Collaborative problem solving

Collaborative problem-solving is a systematic discussion that focuses solely on a single business-critical issue in a 60- to 90-minute meeting. 

Ferrazzi provides examples of meetings with the topics of:  

  • What do we need to re-prioritise for the year ahead in a difficult economic climate? 
  • What ‘bold innovations’ can we consider for the company’s growth strategy?  
  • What risks might derail the business in the coming six months? 

“Be clear from the outset about who will make the final decision,” he cautions. Members of the meeting break into small groups to brainstorm, with Ferrazzi advising “People have more courage in small groups; they are less inhibited about critiquing ideas.” 

When providing feedback on ideas and strategies, the decision-maker needs to clearly say yes or no to ideas and why: “Feedback is critical – the collaboration must result in action.” 

2. ‘Bulletproofing’ for better hybrid working

Bulletproofing is designed to break down siloes and encourage executives traditionally more concerned with protecting their ‘turf’ to see the organisation from a ‘big picture’ perspective. 

Ferrazzi provides the following example:  

A team member presents a high-priority project, ideally in a shared three-column document: 

  • What’s been achieved? 
  • Where is the project struggling? 
  • What’s planned for the next sprint of work? 

They then ask for no-holds-barred feedback. Working virtually, they can be divided into groups of three and sent into breakout rooms for 10 to 30 minutes, depending on the issue’s complexity. The break-out groups challenge unacceptable levels of risk and brainstorm ways to mitigate it. 

“Feedback is recorded in a shared file divided into columns for challenges, innovations and offers of help. This feedback ensures the project leader benefits from the team’s full wisdom.” 

the importance of social contract team and how it can enhance your organization's productivity

3/4/5. Candour breaks, red flag replays and safe words

Principles three, four and five are closely related, as they all concern creating a forum where people are encouraged to contribute and discuss issues openly and collaboratively. 

The importance of candour, according to Ferrazzi, can’t be overstated: “Conflict avoidance can be corrosive. No matter how sensitive the issue, or how serious the criticism is, members must feel free to voice their thoughts openly, though always constructively, recognising that it is a crucial step toward a better solution. In our experience, most companies struggle with helping such employees acquire the necessary mindset.”  

Candour breaks (“Guys, what’s not being said here?”), red flag replays (where any member of the team can ask to revisit something said earlier and re-examine it) and safe words (for bringing people back on track when the conversation derails) all play a vital role in encouraging everyone to contribute to meetings constructively. 

6. Peer-to-peer development in the form of open 360s

With their research showing that more than 70% of team members aren’t invested in delivering honest feedback to colleagues, regular 360s (also known as roundtable discussions or feedback-from-all-directions meetings) are a key part of Ferrazzi’s Social Contract for Teams. As he states, “In today’s volatile business environment, individuals at every level must continually improve and grow, which is where the open 360 comes in.” 

The nature of 360s under his social contract model starts with the leader, then follows with teammates taking turns giving feedback in two rounds.  

“In the first round, members should celebrate some aspect of their teammate’s performance,” he writes. “For example, ‘What I most admire about you is…’ In the second round, they should offer constructive, affirmative criticisms. And a recommendation for improvement might begin, ‘Because your success is so important to our success, I’d suggest…’”  

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Social Contract for Teams in the real world 

Erik Starkloff, the CEO of National Instruments, implemented the Social Contract for Teams model when he was appointed to the role on the cusp of the pandemic. He believed that culture change was required, and he wanted his senior leaders to understand they didn’t always need to wait for him to make big calls.  

“He wanted to spark collaboration and candour. And he needed to do all that virtually; the COVID-19 pandemic was about to send the team remotely,” notes Ferrazzi in his Harvard Business Review article. 

After buying into the principles of the contract, Ferrazzi noted that Starkloff’s leadership team engineered trust and created a culture of innovation and speedier decision-making.  

“The most tangible change is the ability to escalate and make critical business decisions faster,” Starkloff says. “The process is collaborative, so the buy-in is greater. In the past, we sometimes thought that collaborative decision-making and fast decision-making were at odds. But there are techniques for achieving both.” 

The change in culture and behaviours of National Instrument’s leadership team fuelled improved performance. The firm reached $US1.47 billion in revenue in 2021—a 9% increase over 2019—and posted all-time record revenue and orders in the fourth quarter of the year. 


In conclusion

With remote and hybrid working here to stay, ensuring your organisation’s getting the most from its people needs a rethink.  

As opposed to having a leader responsible for all the decision-making, performance management and evaluation, a more collaborative approach is likely to deliver better results. Genuine empowerment of people, creating a culture where employees are encouraged to share ideas and strategies, and focusing on the development of teams instead of leaders could be the pathway to real change. 

This is what’s known as Keith Ferrazzi’s Social Contract for Teams. 

Want to start a conversation about your people and mobility in a changing world? Talk to SG Fleet today. 

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