The “Social Contract” (the moral and/or political obligations individuals have to support society as a whole) is what keeps us civilized. If we all act as independent operators— without common laws, rules, and agreements—chaos reigns. We must act with an eye toward the health of our communities.

Leaders, naturally, help set the standard for selfless moral and political decisions. Not all do, however. Enron's leaders lied and stole, and many communities (employees, Houston residents, stockholders, etc.) paid for their immoral acts. The Archdiocese of Boston broke its contract with its followers by protecting priests guilty of sexual abuse. These organizations weakened the societal fabric that holds us all together.

Genghis Kahn, Alexander the Great, and Marcus Aurelius all understood the notion of the social contract. These fierce warriors knew that if they mistreated the communities they conquered, they would never be able to integrate them into a larger society. They didn't rely on terror and brute force to keep control (unlike Saddam Hussein). They adapted to and accepted the customs of these new communities, knowing that to do otherwise was to incite rebellion.

Democracy does not just mean having the right to vote—something the current U.S. administration failed to fully appreciate in its invasion of Iraq. Democracy means entering willingly into a social contract—with all of the inherent rights and restrictions. Granted, not everyone will like every rule, but the benefits of a stable, safe society outweigh the costs.

By any administration condoning the torture of prisoners, like an oppressor, they show that they won't abide by the rules that are necessary to maintain a stable, safe society—one with a healthy social contract. They have, in effect, acted like the leaders of Enron and the Archdiocese of Boston. They show that they are more concerned with their own selfish pursuits than the interests of the communities they represent.

As a leader, you can do better. Your organization's mission, vision, and goals must clearly define and reflect the rules and values necessary to maintain a healthy, respectful community. It must be understood what each individual gains and loses by entering into your organization's social contract.

“We the people, in order to form a more perfect union, establish justice, insure domestic tranquility, and provide for the common defense….” We each know the feeling of pride and security that comes with this social contract. We also know how quickly our trust in governmental representatives leaves once this contract has been fractured.

Ask yourself, “What is my organization's implicit social contract?” and “How can I make it explicit and understood by all?”

Gary Cohen

in this issue
	Gary's Features   When Should I Commit Resources to a New Project?   The Small Stuff

“Be careful what you wish for,” the old saying goes. Maybe it should be “Be careful what you begin” instead. Once you commence a project, you are (perhaps unwittingly) attaching yourself to a trajectory. If you're not careful, you may find yourself unable to hop off that trajectory, simply because you have invested too much time, money, and effort to accept failure. Motorola wanted to make consumer-based satellite phones. When they completed the first phase of their business plan (creating the technology), they realized they didn't have a viable marketing plan that would account for the high cost of delivery. Had they done so, they would have saved billions of dollars. The study that appeared in John Keith Murnighan's Bargaining Games: A New Approach to Strategic Thinking in Negotiations indicates how psychologically attached we become to our failures. Instead of focusing in this column on how to learn to cut your losses, I want to address the issue on the front end: When should you escalate your commitment to new projects? Here are some questions to ask in the early stages: Do you think future gains are possible, and what are the risks you would be willing to take for those gains? Is optimism blocking you from seeing negative consequences? Has the team over-advocated for the project, and do they now feel vested or personally identified with the outcome? If faced with a worst-case scenario, would you still be able to walk away without a significant loss? By the time you find yourself asking, “What propelled us to move in this direction to begin with?” it's usually too late to escape without disastrous, unimagined consequences. Save yourself the shame of having to admit your error by analyzing everyone's investment in the project at the outset, including your own. Imagine worst-case scenarios. And ask yourself, “How far are we willing to proceed before we cut our losses?”

How do we decide who people really are -- and whether we should retain their services? We look for clues. When a writer profiles a celebrity, for example, and wants to tell us whom this celebrity really is, he observes and reports details. What shoes is she wearing? Is she wearing eye makeup? Does she serve water in simple Crate and Barrel glasses, or in Waterford crystal? What's on her mantel: her Oscar, or pictures of her teenage children? Does she bite her fingernails? We try to hide ourselves behind large and obvious things: our house, cars, and other outward gestures. Knowing this, when we want to discover the real person behind the veil we look for the tiny details. Consider, as one vivid example, the heel. What could be more obscure than a heel? The cartoon character Linus once hinted at the heel's obscurity -- and his attempts at cultivating his image -- when Lucy one day asked him why he shined only the front of his shoes. "I care what people think of me when I enter a room," Linus answered. "Who cares what they think when I leave?" Linus was wrong. People noticed the back of Linus' shoes well before he left. In fact, for decades it was precisely to a man's heels that people looked to determine his station in life. People knew that a man might continue to wear an expensive gold pocket watch and rich-looking silk tie for years, but that he would skimp on replacing the heels of his shoes when cash was short, thinking no one would notice. But people did more than notice. People learned to look for that very detail. Thus entered into English the expressions "well-heeled" and "down at the heel." People looked at people's heels -- a tiny detail -- to tell who they were. The next time you visit a Nordstrom store, sit in one of the chairs and ask, what is different about this chair? The company ordered it custom-built, at great expense, with a firm seat slightly lower to the ground than a standard chair's. Nordstrom designed these chairs after noticing how much effort it took customers to lift themselves out of heavily stuffed chairs. Why did Nordstrom spend hundreds of thousands of dollars to custom-make its chairs? Because they understand that tiny details attract and keep customers. "God is in the details," Mies van der Rohe is famous for saying. Business is, too. Copy your prospects: Watch your visible details. Excerpts from The Invisible Touch: The Four Keys to Modern Marketing

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