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Tips and Tutorials on Extreme Computing on YouTube

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If you are in to building extreme computing platforms you should know about this YouTube channel.

A recent video blog

The YouTube Channel –


Written by frrl

June 1, 2010 at 4:01 am

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The Law of the Lid and why Leadership can’t be taught

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The greatest danger for most of us is not that we aim too high and we miss it, but we aim too low and reach it. – Michelangelo

The Journey

Why do some people stay employees all their life?  Why do some people become self-employed and start businesses?  Why do some small businesses stay small businesses?  Why do businesses that start out as single-owner sole proprietorship stay that way and never become employer businesses?  Why do some companies grow to global enterprises while others never even have a nationwide presence?  Why are there enduring “Mom and Pop” businesses while at the time a single Wal-Mart store in Rogers Ark.  can grow to 8,400 stores, 2.1 million employees, and 400 billion dollars in revenue over 4 decades?

The answer to the question above lays in many parts – timing, circumstances, resources, and perhaps, just dumb luck and serendipity.  There is one aspect that one can ferret out of the numerous aspects that determine how far an individual, team, organization, or company gets on the journey to “success” – for whatever definition of success one chooses to define.

What is “The Lid”

The “lid” is a term used by John C. Maxwell.  Here is how he explains it

Leadership is always the lid on personal and organizational effectiveness. The lower an individual’s ability to lead, the lower the lid on his potential. The higher the leadership, the greater the effectiveness. Your leadership ability–for better or for worse–always determines your effectiveness and the potential impact of your organization. If you want to grow your church or company, you need to lift your lid.

A few years ago, I met Don Stephenson, the chairman of Global Hospitality Resources, Inc., an international hospitality advisory and consulting firm. At the time, his company took over the management of hotels and resorts that weren’t doing well financially. I asked him to explain how they did it.

Don said that whenever they went into an organization, they always started by doing two things: First, they trained all the staff to improve their level of service to the customers; and second, they fired the leader.

“You always fire him?” I asked. “Don’t you talk to the person first–to see if he’s a good leader?”

“No,” he answered. “If he’d been a good leader, the organization wouldn’t be in the mess it’s in.”

And I thought to myself, Of course. It’s the Law of the Lid. To reach the highest level of effectiveness, you have to raise the lid–one way or another.

The good news is that getting rid of the leader isn’t the only way. You can also do it through personal growth and development. 

To further illustrate the Law of the Lid, Maxwell tells the story of the McDonald Corporation.  Which, if you didn’t know, if it wasn’t for Ray Kroc,  would not be the global corporation that it is today.

If the McDonalds corporation was left to the McDonalds brothers – Dick and Maurice,  McDonalds would be a single restaurant on the corner of 14’th and E streets in San Bernardino California.

Here is the story of Dick and Maurice McDonald as told by Maxwell

Let me start by telling 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. In their search for success, the brothers tried out a few business opportunities in and around Hollywood. In 1937, they struck on something that worked. They opened a small drive-in restaurant in Pasadena.

Dick and Maurice’s tiny drive-in was a great success, and in 1940, they decided to move the operation to San Bernardino, fifty miles east of Los Angeles. Their business exploded. Annual sales reached $200,000, and the brothers found themselves splitting $50,000 in profits every year–a sum that put them in the town’s financial elite.

As times changed, so did they. In 1948, they streamlined everything, reducing their menu and emphasizing service with speed. And their profits soared. The two young men had the golden touch.

Who were these brothers? Their names were Dick and Maurice McDonald. They had hit the great American jackpot, and the rest, as they say, is history, right? Wrong! The McDonalds never went any farther because their weak leadership clamped a lid on their ability to succeed.

It’s true that the McDonald brothers had one of the most profitable restaurant enterprises in the country. Their genius was in customer service and kitchen organization. But when they tried marketing the McDonald’s concept to open other franchises in 1952, their effort was a dismal failure. The reason was simple. They lacked the leadership necessary to grow their organization. Dick and Maurice were good restaurant owners and efficient managers. But they were not leaders. At the height of their success, Dick and Maurice found themselves smack-dab against the Law of the Lid.

In 1954, the brothers hooked up with a man named Ray Kroc, who was a leader. He soon struck a deal with Dick and Maurice, and in 1955, he formed McDonald’s System, Inc. (later called the McDonald’s Corporation).

Kroc immediately bought a franchise to use as a model and prototype to sell other franchises. Then he assembled a team and built an organization. The “lid” in the life and leadership of Ray Kroc was obviously much higher than that of his predecessors. Between 1955 and 1959, Kroc opened 100 restaurants. In 1961, for the sum of $2.7 million, Kroc bought the exclusive rights to McDonald’s from the brothers, and he proceeded to turn it into an American institution and global entity.

Today the company has more than 21,000 restaurants in no fewer than 100 countries. Leadership ability–or more specifically its lack–was the lid on the McDonald brothers’ effectiveness.

So, there are a couple of points to make

  1. The Law of the Lid sets the limit of effectiveness of an individual, team, organization, company, or for that matter – a society, culture, or a nation.  (If we extend Maxwell’s concept to the extreme.)
  2. According to Maxwell, Leadership can be taught. (“The good news is that getting rid of the leader isn’t the only way. You can also do it through personal growth and development. “)

Number one is true’; Number two is “maybe” and “usually not”

Here’s why

Read the rest of this entry »

Written by frrl

June 1, 2010 at 2:25 am

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