John C. Maxwell - The Law of the Lid: Lesson 1 from the 21 Irrefutable Laws of Leadership

1998 and 2007 by John C. Maxwell

This ebook is derived from The 21 Irrefutable Laws of Leadership, by John Maxwell, 1998 and 2007 by Maxwell Motivation, Inc., a Georgia corporation.

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Scripture quotations noted CEV are from THE CONTEMPORARY ENGLISH VERSION.
1991 by the American Bible Society. Used by permission.

Scripture quotations noted The Message are from The Message: The New Testament in Contemporary English. 1993 by Eugene H. Peterson.

ISBN 978-0-7852-7431-5 (HC)
ISBN 978-1-4185-3831-6 (ebook)
ISBN 978-1-4002-7560-1 (ebook of Chapter 1)

This book is dedicated to Charlie Wetzel, my writing partner since 1994. Together weve written more than forty books, and Ive enjoyed our collaboration on every one. As I have labored to add value to others by identifying and teaching leadership principles, Charlie, you have added value to me and my efforts. Your insights and skills as a wordsmith have been enjoyed by millions of readers. As a result, you have made a greater impact on more people than has anyone else in my inner circle. For that I thank you.

CONTENTS

Thank you to the thousands of leaders around the world who learned and sometimes challenged the laws of leadership, thus sharpening my thinking.

Thank you to the team at Thomas Nelson who gave me the chance to revise and improve this book, and especially to Tami Heim for her strategic leadership and to Victor Oliver who was instrumental in the development of the original concept.

Thank you to Linda Eggers, my executive assistant, and her assistant, Sue Caldwell, for their incredible service and willingness to go the extra mile every day.

Thank you to Charlie Wetzel, my writer, and Stephanie, his wife, with-out whose work this book would not have been possible.

Leadership Ability Determines
a Persons Level of Effectiveness

I often open my leadership conferences by explaining the Law of the Lid because it helps people understand the value of leadership. If you can get a handle on this law, you will see the incredible impact of leadership on every aspect of life. So here it is: leadership ability is the lid that determines a persons level of effectiveness. The lower an individuals ability to lead, the lower the lid on his potential. The higher the individuals ability to lead, the higher the lid on his potential. To give you an example, if your leadership rates an 8, then your effectiveness can never be greater than a 7. If your leadership is only a 4, then your effectiveness will be no higher than a 3. Your leadership abilityfor better or for worsealways determines your effectiveness and the potential impact of your organization.

Let me tell you a story that illustrates the Law of the Lid. In 1930, two young brothers named Dick and Maurice moved from New Hampshire to California in search of the American Dream. They had just gotten out of high school, and they saw few opportunities back home. So they headed straight for Hollywood where they eventually found jobs on a movie studio set.

After a while, their entrepreneurial spirit and interest in the entertainment industry prompted them to open a theater in Glendale, a town about five miles northeast of Hollywood. But despite all their efforts, the brothers just couldnt make the business profitable. In the four years they ran the theater, they werent able to consistently generate enough money to pay the one hundred dollars a month rent that their landlord required.

A NEW OPPORTUNITY

The brothers desire for success was strong, so they kept looking for better business opportunities. In 1937, they finally struck on something that worked. They opened a small drive-in restaurant in Pasadena, located just east of Glendale. People in Southern California had become very dependent on their cars, and the culture was changing to accommodate that, including its businesses.

The drive-in restaurant was a phenomenon that sprang up in the early thirties, and it was becoming very popular. Rather than being invited into a dining room to eat, customers would drive into a parking lot around a small restaurant, place their orders with carhops, and receive their food on trays right in their cars. The food was served on china plates complete with glassware and metal utensils. It was a timely idea in a society that was becoming faster paced and increasingly mobile.

Dick and Maurices tiny drive-in restaurant was a great success, and in 1940, they decided to move the operation to San Bernardino, a working-class boomtown fifty miles east of Los Angeles. They built a larger facility and expanded their menu from hot dogs, fries, and shakes to include barbecued beef and pork sandwiches, hamburgers, and other items. Their business exploded. Annual sales reached $200,000, and the brothers found themselves splitting $50,000 in profits every yeara sum that put them in the towns financial elite.

In 1948, their intuition told them that times were changing, and they made modifications to their restaurant business. They eliminated the carhops and started serving only walk-up customers. And they also streamlined everything. They reduced their menu and focused on selling hamburgers. They eliminated plates, glassware, and metal utensils, switching to paper and plastic products instead. They reduced their costs and lowered the prices they charged customers. They also created what they called the Speedy Service System. Their kitchen became like an assembly line, where each employee focused on service with speed. The brothers goal was to fill each customers order in thirty seconds or less. And they succeeded. By the mid-1950s, annual revenue hit $350,000, and by then, Dick and Maurice split net profits of about $100,000 each year.

Who were these brothers? Back in those days, you could have found out by driving to their small restaurant on the corner of Fourteenth and E Streets in San Bernardino. On the front of the small octagonal building hung a neon sign that said simply McDonalds Hamburgers. Dick and Maurice McDonald had hit the great American jackpot, and the rest, as they say, is history, right? Wrong. The McDonalds never went any further because their weak leadership put a lid on their ability to succeed.

THE STORY BEHIND THE STORY

Its true that the McDonald brothers were financially secure. Theirs was one of the most profitable restaurant enterprises in the country, and they felt that they had a hard time spending all the money they made. Their genius was in customer service and kitchen organization. That talent led to the creation of a new system of food and beverage service. In fact, their talent was so widely known in food service circles that people started writing them and visiting from all over the country to learn more about their methods. At one point, they received as many as three hundred calls and letters every month.