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The Right Approach: Leadership 101—The Law of the Lid

Introduction
As we continue with the second installment of Leadership 101, it is wise to review the premise of this series: Good leadership always makes a difference; unfortunately, so does bad leadership. Today we will be talking about the first of the 21 Irrefutable Laws of Leadership: The Law of the Lid ^[1].

The Law of the Lid
Last time, I stated that the biggest mistake most companies make is to promote someone to a leadership position based on their technical skills. This makes some sense, on the surface. But the thing is, leadership requires a completely different skill set and what happens more times than not is that you lose a good technical person and gain a bad manager.

The Law of the Lid states that your success as a leader is dependent on your leadership ability, or your leadership lid. You can never rise above your lid (Figure 1) and neither can your organization. Take your left hand and hold it out in front of you with your palm parallel to the ground (this is your lid). Now make a fist with your right and hold it under your palm (this is your business). Your business success may rise up to your lid but cannot rise above it. In fact, for many people success falls a bit short of their lid.

Figure 1: Leaders can get stuck “under the lid” and not have the ability to raise themselves or their organizations.

So, your leadership lid in this context is your ability to realize your vision for the business: Create a highly effective team, motivate those people in a common purpose behind that vision, and inspire them to see how their own goals are in alignment with the team goals. In other words, to quote my friend Jim Collins, to get the right people on the bus, get the right people in the right seats, and get the wrong people off the bus. Only then can we get the bus going in the right direction.

The McDonalds Brothers
One of the most illustrative examples of The Law of the Lid is to compare the leadership ability of the McDonalds brothers with that of Ray Kroc. In the 1930s, Mac and Dick McDonald moved from New Hampshire to California to pursue the American Dream, and after a couple of failed businesses decided to open a small drive-in restaurant that served hot dogs, fries and shakes. The business was quite successful, and in 1937 they moved to San Bernardino and opened a much larger facility, adding barbecue and hamburgers to the menu. Business exploded, and the brothers McDonald decided to turn the industry on its ear by focusing on walk-up customers and serving them in 30 seconds or less.

To do this, they focused on hamburgers and engineered a process that streamlined the operations, cut costs, and lowered the price to their customers. They called their new process the Speedee Service System, which truly revolutionized this market and created the “fast food” industry. The business was so successful that they decided to start franchising their restaurant in 1952, which ended in abject failure. Why? The McDonald brothers’ true genius was in customer service and kitchen organization. They were good single-restaurant owners; they were efficient managers, but they were not leaders. Their leadership ability had clamped down a lid on what they could and couldn’t do.

In 1954, the brothers partnered with Ray Kroc, the founder of the company that made the milkshake equipment used by most drive-up restaurants, including the McDonald brothers. Kroc formed McDonald’s Systems, Inc., which llater became McDonald’s Corporation. Ray immediately assembled a team of the sharpest people he could find to fulfill his vision of making McDonald’s a nationwide company. In 1961, Kroc bought the exclusive rights to McDonald’s for $2.7 million ($23 million in today’s dollars). During the earlier failed franchise attempt by the brothers, one franchisee wanted to open a McDonald’s in Phoenix, to which Dick replied “What %$@ #&* for? The McDonald’s name means nothing in Phoenix.” Contrast the McDonald’s brothers’ “lid” with that of Ray Kroc, which was sky high. Between 1955 and 1959, Kroc opened 100 restaurants; four years later there were over 500. Today there are more than 31,000 McDonald’s restaurants in 119 countries!

Ray Kroc’s lid was obviously much higher than that of the McDonald brothers.

Raise Your Lid
The first step is to recognize the importance of leadership, see it as a learnable skill, and to set about developing that skill. Many organizations spend fortunes recruiting the best, most talented, and most in-demand people; then, they put them on poorly performing teams with terrible leadership. This happens not through malice or indifference; it is simply because they don’t understand the importance of leadership. Unfortunately, at most companies, leadership training is either ignored completely or limited to training on how to fill out the annual review form.

But if we can agree that a leader’s role is delivering results through others, having a low leadership lid is not going to work very well; it’s as simple as that. And the more people they’re leading, the bigger the problem. Like most things, raising your lid is a process, you’ve got to grow; to grow you have to get in the growth zone; and unfortunately, the growth zone is not the comfort zone. Growth takes place outside the comfort zone, not in it. It’s an active pursuit and it’s intentional. It’s a contract you make with yourself; really, it’s an internal thing, not somewhere you necessarily go to grow. We have to choose growth over comfort, and that means getting out of the comfort zone regularly. It’s a great way to raise your leadership lid. Getting around people who think differently is another great way to raise your lid. And it’s the same in anything, isn’t it? If you want to play a better golf game, stop playing with your friends and seek out better players. If you want to be a better leader, get around better leaders.

Leadership is a Learnable Skill
But it takes effort, focus and perseverance. I learned the hard way, over a long period of time, that if you don’t have influence you will never be able to lead others. If you’re going to be successful in life the first thing you work on is to grow and raise your leadership lid. And the Pareto principle really does apply here: a little goes a long way. The minute that you begin to grow and raise your leadership lid, suddenly, your results will begin to change. Leadership really is that important: Everything rises and falls with leadership.

References

1. “21 Irrefutable Laws of Leadership” by John C. Maxwell.

 This column originally appeared in the February 2021 issue of PCB007 Magazine.