The difference between governments and organisations is not power. It’s obligation.
Governments cannot ignore the social contract. Their authority rests, at least in part, on consent, trust, and legitimacy. When those things begin to fray, the consequences surface quickly and visibly.
Many organisations, by contrast, have behaved as though the social contract were optional. For a long time, hierarchy, job scarcity, and economic pressure made it possible to extract performance without paying much attention to fairness, voice, or sustainability. That arrangement held for a while. Right now, it is becoming harder to sustain.
Politics is useful here, not as a model to copy, but as a mirror. The forces that stabilise or destabilise societies are not so different from the ones that stabilise or destabilise workplaces.
Expectations, Not Ideology, Hold Systems Together
Across history, and across very different political models, systems rarely fail simply because economic growth slows. They fail when people no longer feel the system works for them. This is when participation thins, compliance weakens, and energy that once went into contribution starts leaking into cynicism or resistance.
At Davos earlier this year, Mark Carney spoke about the growing strain on our current systems and the widening gap between economic outcomes and social legitimacy. It was a powerful observation about structure. Systems that lose legitimacy become harder to govern, regardless of how strong their numbers look on paper.
The lesson for business is simple. Stability does not come from how virtuous a system claims to be. It comes from whether people believe the deal still holds.
Comfort, Consequence, and a Shift in Tone
There is a growing sense, particularly in Western economies, that long periods of comfort dulled our attention to consequence. Commentator Konstantin Kisin has argued that when systems feel safe and prosperous for long enough, focus drifts and assumptions harden. Reassuring narratives keep being repeated long after the conditions that supported them have changed.
A similar shift is playing out inside organisations. For years, many businesses operated on a shared myth that their decisions broadly aligned with the public good, or at least did no harm. That story is now being questioned by many generations. Gen Z, in particular, is more willing to test it openly, in offices and in public spaces. However the flare is going up, it is a signal that legitimacy is being re-examined.
Human sustainability is one of the most profound legitimacy challenges now facing organisations. It is often presented as kindness or social responsibility. Instead, it is about maintaining the physical, psychological, and social capacity of people so they can perform over time. When health, workload, and psychosocial conditions are ignored, performance deteriorates quietly, unevenly, and expensively. Pay alone does not buy a willingness to protect a system that no longer feels legitimate.
The warning signs are usually there well before the damage is obvious. They are ignored because the assumption and narrative repeat that they are normal and therefore acceptable. In doing so, organisations create a legitimacy risk that few are mitigating effectively.
The Leadership Question That Now Matters
The current global environment serves as a forecast for business. Fragmentation, mistrust, and volatility are what happen when systems outrun their social foundations.
Once permission is given to question the rules-based order in one arena, it doesn’t stay contained. Rules begin to be tested and compliance becomes conditional.
The question facing leaders today is not whether a social contract exists at work. It always has. The question is whether it is being consciously designed and maintained, or quietly worn away while everyone hopes performance will hold.
Power of all kinds is now under scrutiny. Political, economic, institutional. Authority is no longer assumed to be legitimate simply because it exists. When leaders cannot clearly explain or defend the systems they control, strain follows quickly.
History repeatedly shows what happens when legitimacy finally runs out.