Latest / The Human Factor: Exploring the Intersection of Humanity, Technology, and Transformation / Episode 020 | Season 2: The Broken Contract
Transcript
- 0:05A senior director told me a story that I think captures
- 0:08something most leaders never think about.
- 0:13She had been with the organization for 14 years.
- 0:18She had turned down to external offers because she believed in
- 0:23the organization's culture and while she trusted the directory,
- 0:28her career was on. Then a restructuring was
- 0:31announced. Her role wasn't eliminated, it
- 0:36was redefined. Her title changed.
- 0:40Her reporting structure changed. Half the team that she had built
- 0:44over a decade was reassigned to someone else.
- 0:48No one asked for her input. She found out in an organization
- 0:54wide e-mail. When I asked her how she felt,
- 0:59she didn't say frustrated. She didn't say that she was
- 1:03angry. She said I'm betrayed.
- 1:08She said I gave them 14 years, I turned down other opportunities
- 1:16and well, they couldn't even tell me to my face.
- 1:21Here's the thing. The organization hadn't broken
- 1:24any legal agreement. Her employment contract remained
- 1:29intact, her compensation unchanged.
- 1:33On paper, well, everything was fine.
- 1:36But something far more important than paper had been devastated.
- 1:42By the end of this episode, you're going to understand
- 1:45exactly what that was and why it may be one of the most
- 1:50overlooked reasons that your best people are quietly
- 1:55disengaging right now. I'm Kevin Novak, CEO of 2040,
- 2:00digital professor at the University of Maryland, and
- 2:04author of the book The Truth about Transformation, Leading in
- 2:09the Age of AI, Uncertainty and Human Complexity, along with the
- 2:13Ideas and Innovations Weekly newsletter.
- 2:16Welcome to the Human Factor Podcast, the show that explores
- 2:20the intersection of humanity, technology, and transformation,
- 2:25along with the psychology behind transformation success.
- 2:30This is season 2 and this is the 7th episode of the season.
- 2:35If you've been following the season, we've been building a
- 2:38diagnostic framework for understanding why transformation
- 2:42fails at the very human level. Episode 1 explored identity
- 2:48crisis. Episode 2 examined emotional
- 2:52contagion, Episode 3 unpacked the structural traps of middle
- 2:56management. Episode 4 looked at the
- 3:00algorithmic mirrors, Episode 5 with my buddy Jim Elliott
- 3:05examined the organization's immune system.
- 3:08And last episode, Episode 6, we explored structural silence, the
- 3:14system that trains people not to speak.
- 3:18Today, we're going deeper than any of those episodes went.
- 3:23We're exploring the psychological contract, the
- 3:25unwritten, unspoken set of mutual expectations between an
- 3:30employee and their organization. This is the invisible agreement
- 3:36that governs how people actually experience their working lives.
- 3:41And when transformation finally set, the damage goes far beyond
- 3:47resistance. It feels like betrayal.
- 3:52I wrote about a related dimension of this in my Ideas
- 3:55and Innovations newsletter issue on a Loyalty trap, When
- 3:59Commitment Becomes a cage. I explored how organizations
- 4:04often mistake loyalty driven hesitation for resistance during
- 4:08transformation. So today's episode takes that
- 4:12concept deeper. We're going to examine the
- 4:15underlying contract that makes loyalty feel like a trap in the
- 4:20first place. Think about your own career for
- 4:23a moment. Think about the expectations you
- 4:27carry into your job every day that no one ever wrote down.
- 4:33Expectations about how decisions get made, how your contributions
- 4:37are valued, what loyalty earns you, how much autonomy you have,
- 4:42and what your future looks like. Now think about what happens
- 4:47when an organization violates those expectations without ever
- 4:52acknowledging that they even existed.
- 4:55The research on this is both fascinating and very sobering.
- 5:00Dennis Rousseau at Carnegie Mellon University, who's widely
- 5:03considered the foundational scholar on psychological
- 5:06contracts, demonstrated that these unwritten agreements are
- 5:10more powerful predictors of employee behavior than formal
- 5:14employment terms. When the psychological contract
- 5:18is honored, people go above and beyond.
- 5:22When it's violated, they don't just disengage, they recalibrate
- 5:29every assumption that they hold about the organization.
- 5:34And, well, they do it quietly, which is why most leaders never
- 5:39see it coming. That quiet recalibration is what
- 5:44we're unpacking today. And I want you to hold on to
- 5:48something as we go through this. Every person on your team right
- 5:52now is operating under a contract that nobody signed,
- 5:56nobody negotiated, and nobody can point to on paper.
- 6:01The question is then whether your transformation is standard
- 6:05or completely destroy it. Let me ground this in some
- 6:08research, because psychological contracts are not just a
- 6:12metaphor. They are one of the most
- 6:15extensively studied concepts in organizational psychology, and
- 6:20the implications for transformation are profound.
- 6:24Dennis Rousseau's foundational work, beginning in the late
- 6:271980s and continuing to her most recent publications, established
- 6:33that every employment relationship contains an
- 6:36implicit set of mutual obligations that exist alongside
- 6:41the formal employment agreement. The employee develops beliefs
- 6:45about what the organization owes them, fair treatment,
- 6:49opportunities for growth, job security, recognition and
- 6:54autonomy, and the organization well.
- 6:58It develops expectations about what the employee owes in
- 7:02return, effort, loyalty, flexibility, and commitment.
- 7:09What makes psychological contracts uniquely powerful is
- 7:14that they are individually constructed. 2 people in the
- 7:18same role with the same manager can hold very different
- 7:22psychological contracts based on their experiences, their
- 7:25conversations with leadership, the promises that they believed
- 7:30were made during hiring, and the pattern that they observe over
- 7:34time. This means that a single
- 7:37organizational action, like a restructuring that I mentioned
- 7:40earlier or a new technology deployment, can simultaneously
- 7:45honor one person psychological contract and completely violate
- 7:49another's. Rousseau identified 2 primary
- 7:53types of psychological contracts.
- 7:56Transactional contracts are those that are very
- 7:58straightforward. I provide my time and skills,
- 8:02you provide compensation, and you define working conditions.
- 8:07These contracts are very narrow, they're very specific, and while
- 8:12they're relatively easy to manage because both sides
- 8:15understand the terms, relational contracts are where
- 8:19transformation gets really dangerous.
- 8:23These are the broader, more emotionally grounded
- 8:26expectations about belonging, loyalty, career progression,
- 8:31identity, and mutual investment. A relational contract might
- 8:36include beliefs like if I give this organization my best years,
- 8:41they'll invest in my development.
- 8:44If I'm loyal during difficult times, that loyalty will be
- 8:49recognized and reciprocated. If I've built something valuable
- 8:53here, I will have a voice in decisions about its future.
- 8:59Well, none of these expectations are written in any offer letter,
- 9:04but they are as real to the person holding them as any legal
- 9:09document. Here's the critical insight from
- 9:12Rousseau's research that connects directly to our Season
- 9:162 framework so far. When a transactional contract is
- 9:19violated, people feel shortchanged.
- 9:23When a relational contract is violated, people feel betrayed.
- 9:28And betrayal, well, it triggers A fundamentally different
- 9:32psychological response than disappointment.
- 9:36Betrayal activates the identity protection mechanism that we
- 9:40discussed in Episode 1. It spreads through emotional
- 9:43contagion that we explored in Episode 2.
- 9:47It's amplified by the structural dynamics of Episode 3.
- 9:51And, well, it feeds directly into the organizational immune
- 9:55system of Episode 5. Well, because perceived betrayal
- 10:00becomes one of the most powerful cultural antibodies an
- 10:04organization can produce. Sandra Robinson and Elizabeth
- 10:10Morrison's research extended Rousseau's work by examining
- 10:14what happens after a perceived contract is violated.
- 10:19Once the psychological contract was perceived as broken,
- 10:22employees began viewing routine decisions through a lens of
- 10:26suspicion. A restructuring that might have
- 10:29been seen as strategic became evidence of bad faith.
- 10:34A new initiative that might have generated enthusiasm became
- 10:39another potential betrayal. I'm going to pause on that for a
- 10:43moment because it's important. Psychological contract violation
- 10:48doesn't just damage the present, it contaminates the future.
- 10:54Every organizational action that follows gets filtered through
- 10:59the experience of betrayal. This is why some organizations
- 11:05find that resistance seems to compound over time rather than
- 11:10diminish. It's not that people are
- 11:13becoming more resistant, it's that each success of change is
- 11:17being evaluated against an increasingly damaged
- 11:21psychological contract. Now let me connect this directly
- 11:25to what happens during organizational transformation,
- 11:29because most leaders have no idea how many psychological
- 11:33contracts that they're violating simultaneously.
- 11:36The first and the most common violation is the autonomy
- 11:40bridge. It's when organizations
- 11:42implement new systems, new workflows, or new decision
- 11:45making structures, they often reduce the autonomy that
- 11:49employees have accumulated over years.
- 11:53Senior manager who used to make budget decisions now needs to
- 11:57route everything through a new approval system.
- 12:01A-Team lead who had flexibility in how they organized their work
- 12:05is now required to follow a standardized process.
- 12:09The formal rationale is consistent and and and
- 12:12efficient. The psychological experience
- 12:15well is that the organization just told you it doesn't trust
- 12:19your judgement anymore. Exploder related dynamic and my
- 12:24newsletter is she wants survival mode leadership, the hidden cost
- 12:28of managing by fear. When leaders create environments
- 12:31where autonomy is stripped away, even with what are seemingly
- 12:36good intentions, the psychological message that
- 12:39people receive is that they aren't trusted and and trust,
- 12:43once damaged, becomes the lens through which everything else is
- 12:48interpreted. The second violation is the
- 12:51career trajectory bridge. When transformation restructures
- 12:55roles, flattens hierarchies, or introduces new skill
- 12:59requirements, it can destroy the career path that someone
- 13:03believed they were on. Here's what leaders miss.
- 13:08The person doesn't just lose a future role, they lose the
- 13:12narrative that they've been telling themselves about why
- 13:15their investment in this organization was worthwhile.
- 13:20I wrote about this in my newsletter on the human factor
- 13:23behind employee retention. I explored how job embeddedness,
- 13:28the links, the fit, and the sacrifice the key people
- 13:32committed and how that can unravel when the organization
- 13:37changes the terms that made those sacrifices feel
- 13:40worthwhile. The third violation is the
- 13:44recognition breach. This is 1 subtle but incredibly
- 13:48devastating 1 Organizations in the middle of transformation
- 13:53often shift their attention, the resources and the recognition
- 13:57towards new capabilities, new hires, and new ways of working.
- 14:01The people who built the organization to its current
- 14:04state, the ones whose institutional knowledge may
- 14:08transformation even possible, can suddenly feel invisible.
- 14:13Their expertise is reframed as legacy thinking.
- 14:17Their experience becomes a liability rather than an asset
- 14:21to the organization. The psychological contract that
- 14:25said your contributions matter and will be recognized gets
- 14:30replaced with an unspoken message that says what God is
- 14:34here won't get us there, and that includes you.
- 14:38This connects directly to the identity crisis we explored in
- 14:41Episode 1. When recognition shifts away
- 14:45from what you've contributed to you, what you need to become.
- 14:50It doesn't just change your job, it threatens your professional
- 14:55identity. And as we discussed in that
- 14:57episode, identity protection is one of the most powerful drivers
- 15:02of human behavior. The 4th violation is the voice
- 15:07bridge, and this connects directly to Episode 6 on
- 15:11structural silence. When transformation decisions
- 15:14are made without input from the people most affected, the
- 15:19psychological contract around having a voice in decisions that
- 15:22affects your work gets violated. People don't expect to make
- 15:27every decision, but they do expect to be consulted on
- 15:31decisions that fundamentally change how they work, who they
- 15:35work with, and what their future looks like.
- 15:39When that consultation doesn't happen, even when time pressures
- 15:44seem to make it impractical, the message received is very clear.
- 15:49Your perspective doesn't matter. The 5th violation is what I call
- 15:55the loyalty reciprocity breach. This is perhaps the deepest
- 16:00contract violation and the one that causes the most lasting
- 16:04damage. It occurs when employees who
- 16:07have demonstrated sustained loyalty, who have stayed through
- 16:10difficult periods, who have sacrificed personal
- 16:14opportunities for the organization's benefit, discover
- 16:18that their loyalty is not reciprocated.
- 16:22The restructuring that eliminates their team without
- 16:24consultation. The reorganization that promotes
- 16:28externally hired leaders over internal candidates who have
- 16:31earned their place. The transformation initiative
- 16:34that treats 15 years of institutional knowledge as an
- 16:38obstacle rather than an asset. Well, I explored this directly
- 16:43on my newsletter on the Loyalty Trap.
- 16:45When commitment becomes a cage. Loyal employees don't resist
- 16:51change because they're rigid. They resist because
- 16:54transformation often violates the very contract that made them
- 16:58loyal in the first place. And treating that resistance as
- 17:02a problem to be overcome rather than a signal to be understood
- 17:06is how organizations lose the people they can afford to lose
- 17:10the least. Think here about your own
- 17:13organization right now. How many of these five
- 17:17violations is your current change of transformation
- 17:20trigger? Here's the harder question for
- 17:24you. Would you even know?
- 17:27Here's what makes psychological contract violations still very
- 17:31dangerous for transformation. It doesn't stay contained. 1
- 17:36Perceived violation cascades through every dimension of the
- 17:40employees relationships with the organization.
- 17:44Neil Conway and Rob Reiner conducted extensive meta
- 17:47analysis on psychological contract breach.
- 17:50What they found was that the consequences extend far beyond
- 17:55the individual. When employees perceive that
- 17:58their psychological contract has been violated, they don't just
- 18:02reduce their own engagement, they communicate that violation
- 18:06to their peers. They share stories.
- 18:09They warn new employees. They create the cultural
- 18:14narratives that become the immune system's antibodies from
- 18:17episode 5 along with the structural silence of episode 6.
- 18:23Remember the compliance director from last episode?
- 18:27She stayed silent about data vulnerability for four months.
- 18:32Imagine that same scenario, but now add the context that she had
- 18:37recently experienced A psychological contract
- 18:40violation. Perhaps she had been passed over
- 18:44promotion that she believed was implicitly promised.
- 18:49Perhaps her team had been restructured without her input.
- 18:54Suddenly, her calculation about whether to speak up isn't just
- 18:58about organizational safety. It's now colored by a sense that
- 19:04the organization has already broken faith with her.
- 19:08So why take the personal risk of raising a concern for an
- 19:13organization that doesn't honor its commitments to you?
- 19:18This is how psychological contract violation feeds
- 19:22directly in the structural silence.
- 19:25When people feel betrayed, the threshold for speaking up rises
- 19:30dramatically. The emotional energy required to
- 19:34advocate for an organization that has violated your trust is
- 19:38simply more than most people are willing to invest.
- 19:42Daniel Kenman's loss aversion research, which I referenced in
- 19:46episode 6, is particularly relevant here.
- 19:49People experience the psychological pain of contract
- 19:52violation approximately twice as intensely as the experience
- 19:57equivalent gains. A broken promise of a career
- 20:00advancement hurts more than a surprise promotion feels good.
- 20:06A violation of trust damages more.
- 20:10Than an act of trust building repairs.
- 20:13This asymmetry means that organizations need to make
- 20:17multiple positive deposits in the psychological contract for
- 20:21every single withdrawal. Then, during transformation,
- 20:25when withdraws are happening rapidly and often invisibly, the
- 20:29account can go bankrupt before even leadership recognizes the
- 20:33terms of deficit. There's also a temporal
- 20:36dimension that most leaders completely underestimate.
- 20:40The relationship between psychological contract violation
- 20:43and trust is not linear. It follows what I described in
- 20:47my newsletter on the relationship decay rate as an
- 20:51exponential pattern. Once trust begins to erode, the
- 20:55decay accelerates. A small violation that may have
- 20:59been absorbed in a high trust environment becomes amplified in
- 21:03an environment where trust is already declining.
- 21:06This creates A compounding effect where successive
- 21:09transformation action causes disproportionately more damage
- 21:15than the last. I see this pattern far too much
- 21:19in the organization's I work with the 2040 digital By the
- 21:22time leadership recognizes that something's wrong, they're not
- 21:26dealing with one broken contract.
- 21:29They're dealing with dozens of interconnected violations that
- 21:32have been compounding for months.
- 21:35And their standard response? A town hall meeting, a
- 21:38leadership message about the vision, a new engagement survey?
- 21:42Well, it does nothing to address the underlying contract damage.
- 21:47In many cases, it makes it worse because employees interpret
- 21:53these gestures through the same lens of distrust.
- 21:57So let me ask you this directly. If you're leading a
- 22:01transformation right now, when was the last time you asked your
- 22:06team not what they think about the changes, but what they
- 22:10expected this organization to be for them?
- 22:13And well, whether those expectations are still being
- 22:17met? Here's the good news, and I want
- 22:20to be clear that there is good news in this.
- 22:23Unlike a broken legal contract, a psychological contract can be
- 22:28repaired. It can even be renegotiated, but
- 22:31only if leaders are willing to do something that most find very
- 22:36deeply uncomfortable. They have to acknowledge that
- 22:40the contract exists and that the organization may have violated
- 22:46it. This is where the concept of
- 22:48psychological contract breach versus violation, becomes
- 22:53important. Here, Rousseau's research
- 22:55distinguishes between both. A breach, well, it's the
- 22:59cognitive recognition that a promise or expectation has not
- 23:03been fulfilled. A violation is the emotional
- 23:08response to that recognition, the feelings of betrayal, of
- 23:13anger, and the resulting damage. Trust.
- 23:17You can have a breach without a violation if the organization
- 23:21acknowledges the breach and provides A credible explanation,
- 23:26but you cannot have a violation without lasting damage to the
- 23:30relationship. What this means in practice is
- 23:33that the single most powerful thing a leader can do during
- 23:37transformation is to name the contract before breaking it.
- 23:43If a restructuring is going to eliminate rules, change the
- 23:46reporting structures, or redefine career paths, the
- 23:51leader who says, I know many of you came to this organization
- 23:54with certain expectations about your career trajectory, and this
- 23:59change may disrupt those expectations.
- 24:03I want to acknowledge that directly, and I want to work
- 24:07with you to build a new path. While saying that is doing
- 24:12something fundamentally different from the leader who
- 24:14simply announces the change and expects people to adapt.
- 24:20The first approach here treats the psychological contract as
- 24:24real and very much worthy of respect.
- 24:27The second approach pretends it doesn't even exist, which is
- 24:32experienced as double violation. First the broken promise, then
- 24:37the denial that a promise was ever made.
- 24:41I wrote about a similar dynamic in my newsletter on the meeting.
- 24:44After the meeting, I explored how strategies and plans lose
- 24:48support not because of what's said in the official meeting,
- 24:52but because of the conversations that happened afterwards.
- 24:56Psychological contract violations?
- 24:58Won't they work the same way? The official communication
- 25:02announces the change. The meeting after the meeting is
- 25:06where people process what that change means for the implicit
- 25:10promises they believed were actually in place.
- 25:15There are several practical approaches leaders can take
- 25:17here. First, conduct a contract audit
- 25:20before launching transformation. This doesn't need to be formal
- 25:24or named as such. It just means having honest
- 25:27conversations with your teams about what they value most about
- 25:31working in this organization, what they believe they were
- 25:34promised implicitly and explicitly, and what would feel
- 25:39to them like a betrayal. These conversations are going to
- 25:44be uncomfortable. They are also going to be the
- 25:46most valuable intelligence that you can gather as a leader.
- 25:50Second, distinguish between contracts that must be broken
- 25:55and contracts that can remain being honored.
- 25:58Not every psychological contract is able to survive
- 26:02transformation. The leaders who thoughtfully
- 26:05separate the contracts that they must violate from those that
- 26:08they can preserve and then communicate clearly about bulbs
- 26:13dramatically reduce the collateral damage.
- 26:17If the career paths are changing but the organization's
- 26:20commitment to development isn't, say that explicitly and then
- 26:25back it up with some action. If the reporting structures are
- 26:29shifting but the value placed on institutional knowledge isn't,
- 26:34demonstrate that through how decisions are made.
- 26:38Third, createspace for what I call legitimate grieving.
- 26:42I referenced this in the concept in my newsletter on the loyalty
- 26:45Trap. I argued that loyal employees
- 26:49need permission to grieve what's being lost before they can
- 26:52commit to what's being built. This applies directly to the
- 26:56psychological contract violation.
- 26:59When a contract is broken, even necessarily, there's going to be
- 27:04a loss. The person who expected a
- 27:06certain career path has lost that future.
- 27:10The team that operated with a certain level autonomy has lost
- 27:13their freedom. Denying the laws or rushing past
- 27:17it doesn't make it go away. It drives it underground, where
- 27:21are compounds and becomes part of the structural silence that
- 27:25we discussed last episode. Fourth, rebuild the contract
- 27:30explicitly after transformation disrupts the old psychological
- 27:35contract. Leadership must actively
- 27:38construct a new one. This means being explicit about
- 27:42what the organization commits to going forward, not in vague
- 27:46aspirational terms, but in specific, observable behaviors.
- 27:50We commit to consulting affected teams before making structural
- 27:54changes. We commit to internal first
- 27:57advancement for leadership roles.
- 28:00We commit to recognizing institutional knowledge as a
- 28:04strategic value. These aren't just communication
- 28:08strategies, they are the terms of a new psychological contract,
- 28:12and they only work if the organization honors them
- 28:15consistently over time. 5th, measure contract health rather
- 28:20than just engagement. Most engagement surveys measure
- 28:24surface level satisfaction. They don't capture the state of
- 28:28psychological contract. Ask questions then to probe the
- 28:32implicit promises. Do you believe this organization
- 28:36values your long term contributions?
- 28:38Do you feel your career expectations are being honored?
- 28:42Do you trust that your loyalty will be reciprocated?
- 28:46These questions reveal contract Hells in ways that standard
- 28:50engagement metrics never will. Let me now connect the
- 28:53psychological contract back to our full Season 2 framework
- 28:57because this concept is in many ways the invisible engine that
- 29:01powers everything that we've explored.
- 29:04The identity crisis from episode 1 is fundamentally A
- 29:07psychological contract violation.
- 29:10When transformation threatens your professional identity, it's
- 29:13because the implicit contract said your expertise is valued
- 29:19here, has been violated. Emotional contagion from episode
- 29:232 is the transmission mechanism for contract violation.
- 29:28When one person's sense of betrayal spreads to their peers,
- 29:33what's actually spreading is the recognition that the
- 29:35organization's implicit promises can't be trusted.
- 29:40The structural traps for an episode 3 are intensified by
- 29:43contract violation because middle managers whose own
- 29:47contracts have been breached are in no position to absorb the
- 29:50contract violations of the people that they lead.
- 29:54Algorithm mirrors from episode 4 can expose contract violations
- 29:58by making visible the gaps between what organizations say
- 30:03they value and how they actually allocate resources and
- 30:07recognition. The organization's immune system
- 30:11from episode 5 is activated by contract violation.
- 30:16The cultural antibodies that attack transformation, the
- 30:19narrative neutralization, the procedural adoption, the
- 30:22champion isolation, all of these are intensified when people feel
- 30:26the organization has broken faith and well structured
- 30:31silence from episode 6 is, at its core, a response to
- 30:36accumulated contract violations. People stop speaking up because
- 30:41the implicit contract that said your voice matters has been
- 30:45violated far too many times. The psychological contract is
- 30:50the thread that runs through every episode.
- 30:53It's the underlying agreement that, when honored, makes
- 30:56transformation possible, and when it's violated, it generates
- 31:01the identity crisis, the emotional contagion, the
- 31:04structured rigidity, the algorithmic blind spots, the
- 31:08immune responses and silence that collectively kills
- 31:13organizational change. As I wrote about in my
- 31:16newsletter on the case for Strategic Patience, leaders earn
- 31:20credibility by demonstrating sound judgment through
- 31:24consistent execution. Teams that have seen commitments
- 31:28honored and plans delivered are capable of engaging
- 31:32constructively with larger ambitions.
- 31:36That's the psychological contract in action.
- 31:39When it's intact, people will follow you through uncertainty.
- 31:43When it's broken, no amount of vision or strategy is going to
- 31:47overcome the damage. I want to leave you with
- 31:50something to sit with right now. At this moment, every person in
- 31:54your organization is carrying an invisible contract.
- 31:58They believe they know what the organization owes them and what
- 32:02they owe in return. That contract shapes every
- 32:05decision that they make, from how much discretionary effort
- 32:08they invest, to whether they speak up in meeting, to whether
- 32:12they stay or start quietly looking elsewhere.
- 32:16Your Transformation Initiative just wrote a new chapter in that
- 32:19contract. The question is whether it was a
- 32:22chapter about trust or a chapter about betrayal.
- 32:26And the answer has nothing to do with your business case, your
- 32:31technology platform, or your project plan.
- 32:34It has everything to do with whether the people being asked
- 32:38to change believe the organization still honors the
- 32:42promises it need when it asked for their commitment.
- 32:46Here's the truth most leaders don't want to hear The
- 32:50psychological contract is always being written.
- 32:54Every decision, every communication, every
- 32:58restructuring, every moment of recognition of its absence adds
- 33:03terms to the psychological agreement.
- 33:07You don't get to decide whether the psychological contract
- 33:10exists. You only get to decide whether
- 33:14you're writing it intentionally or accidentally.
- 33:18And the organizations that lose their best people are almost
- 33:21always the ones writing it by accident.
- 33:24Silence here is not the problem, it is the signal.
- 33:28I said that last episode today I'm going to add this.
- 33:33When your best people go silent, they're not disengaging from
- 33:36work, they're disengaging from the contract.
- 33:41And by the time you notice, well, the terms of already being
- 33:45rewritten in ways that no town hall or engagement survey can
- 33:51undo. If you found today's episode
- 33:54valuable, subscribe to the Human Factor Podcast.
- 33:57Wherever you watch or listen to podcasts, Leave a rating and a
- 34:02comment. Share this episode with your
- 34:05leadership team. Because understanding the
- 34:07psychological contract is understanding the difference
- 34:11between transformation that sticks and transformation that
- 34:14silently collapses from within. For weekly insights about
- 34:19transformation psychology, organizational behavior, and the
- 34:23human factors that determine transformation success,
- 34:26subscribe to my Ideas and Innovations newsletter on 2040
- 34:30Digital's website or on substance@2040.substack.com.
- 34:35Several of the newsletter issues that are referenced today go
- 34:38deeper into the concepts that we cover, including the loyalty
- 34:42trap, the relationship decay rate, the Meeting after the
- 34:46meeting, and survival mode leadership.
- 34:49Those are all available in the newsletter archive.
- 34:52Connect with me on LinkedIn as well.
- 34:55I post regularly about the psychology of transformation and
- 34:58I would love to hear from listeners about their own
- 35:00experience with psychological contract violations in their
- 35:04organizations. What implicit promises has your
- 35:08organization made and broken? That's a conversation worth
- 35:13having. Special note here, we'll be on a
- 35:16mid season break, returning the third week of April.
- 35:19When we return, we have a series of great guests over 6 episodes
- 35:23bringing substantive conversations with me with the
- 35:26goal of bringing you field tested practical strategies and
- 35:30tactics that they have used in navigating the human factor.
- 35:34It's going to be an exciting six weeks.
- 35:37This is the Human Factor podcast.
- 35:39I'm Kevin Novak. Thanks for watching or
- 35:42listening.