Leadership Principle #1

The Law Of The Lid

Recently Carrie Poulson and I were asked to pitch hit for AJ Monte on one of his weekly “Fireside Chats” for his team. Carrie mentioned a book by John Maxwell entitled “The 21 Irrefutable Laws of Leadership”. Being the voracious reader that I am, I immediately bought the book and have been reading it ever since. I highly recommend it to anyone who wants to be successful in business.

The first law that is mentioned in the book is what Maxwell calls the “The Law of The Lid”. This law basically says that your effectiveness is actually limited by your ability to lead. On a scale of 1 to 10, if you rate a 6 then the most your effectiveness can rate is a 5. If you rate a 9, the most your effectiveness can rate is an 8.

He illustrates how this works by telling the story of two brothers, Dick and Maurice, who left New Hampshire and went to California in search of the “American Dream”. They originally opened a theatre, but try as hard as they could, it was a dismal failure.

But the brothers had an entrepreneur spirit, and they soon found a new opportunity by opening a small drive-in business. The drive-in business was a new phenomenon in those days, and their new business was a huge success. Soon they expanded the menu to include not only hot dogs, fries, and shakes to include barbecue beef and pork sandwiches, hamburgers and other things. They soon streamlined their business which made it even more successful. They concentrated on hamburgers, French fries, and Coke, and eliminated the bell-hops, glass plates, glassware, and metal utensils. They were hugely successful.

Who were these brothers? If you drove by their restaurant, which they had moved to San Bernardino, you would have seen a sign outside their octagonal shaped building which simply read McDonald’s Hamburgers.

Unfortunately these brothers were efficient managers of this single store, but they were horrible leaders. As they tried to franchise their restaurant they were a dismal failure. They lacked the leadership skills and their thinking patterns clamped a lid down on what they could do and become. At the height of their success they found themselves smack up against the “Law of the Lid.”

Fortunately a great leader by the name of Ray Kroc knew about the McDonald brothers and their restaurant, struck a deal with them in 1955, and because he understood the “Law of the Lid”, was able to transform the McDonald’s brothers business into the giant McDonald’s Corporation we know today.

The Lesson: If you want to take your business to the next level and do something special, recognize the importance of improving your leadership skills. It’s the only way you can increase your effectiveness.