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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

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Written by frrl

June 1, 2010 at 2:25 am

What Makes Men?

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Some thoughs based on the thinking of Ronald Heifetz at the John F. Kennedy School of Government

Some societies, social systems, cultures, and organizations “get stuck” – and in the worst case, die –  due to their inability to objectively face reality and constructively (productively) adapt. 

Ronald Heifetz calls this “work avoidance”.  You can observe this in politicians, CEO’s, and almost any place where the ability to objectively assess reality and face problems head-on is lacking.

From the “school of experience” perspective, one gains the ability to deal with these uncomfortable and distressful situations over time simply by being placed in these situations time and time again and gaining the proficiency to productively deal with them rather than falling into the trap of work avoidance. 

Sometimes people are challenged too quickly and they collapse into inaction or are paralyzed by the situation.

From Hiefetz:

People fail to adapt because of the distress provoked by the problem and the change it demands.  They resist the pain, anxiety, or the conflict that accompanies a sustained interaction with the situation.  Holding on to past assumptions, blaming authority, scapegoating, externalizing the enemy, denying the problem, jumping to conclusions, or finding a distracting issue may restore stability and feel less stressful than facing and taking responsibility for a complex challenge.  These patterns of response to disequilibrium are called work avoidance mechanisms… 

While more research should clarify the distinction between productive and avoidance behavior in different social systems, some rules of thumb are useful.  One might detect work avoidance when the subject of discussion is suddenly taken off the table…; when the focus shifts from attending to the problem to alleviating the symptoms of stress…; or when responsibility for the problem is displaced to an easy target (as with scapegoating).  One ought to take a skeptical stance, at least momentarily, when some action suddenly makes everyone feel good.

Again, some people placed into a position to solve these types of gut-wrenching problems are destroyed.  For others, the opposite happens – they are transformed by it.  Some have called this experience “The Crucible” – a sort of furnace of life-changing trials where one learns and earns confidence of rock-hard determination – a cauldron of turbulent crisis where both character, and sometimes, new societies are forged.

Think of the American Revolution and the founding fathers – Benjamin Franklin, George Washington, John Adams, Thomas Jefferson, John Jay, James Madison, Alexander Hamilton, and others.  What happened to folks like these?

The question is this, in the context of work avoidance and the idea of the crucible, “Did the situation make these men or would these men have risen to prominence without the situation?”.  There is no lack of “crucible situations” – but perhaps lack of people who are willing and able to step into the cauldron of a turbulent crisis and seize the opportunity to  “become” men.

Written by frrl

May 17, 2010 at 2:36 am

The Four Stages of Competency & Predictors of Career Success and Failure

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“Know thyself” is a greek aphorism that was inscribed at the Temple of Apollo at Delphi.

A couple of weeks ago I ran into someone who not only did not know what he did not know but also had a pretty good idea (in error) of what other people know and did not know.  For a person who did not know himself, making an assertion of what other people know and do not know is quite an accomplishment.

Here are the four stages of competency

  1. Unconscious Incompetence.  The individual neither understands nor knows how to do something, nor recognizes the deficit, nor has a desire to address it.
  2. Conscious Incompetence – Though the individual does not understand or know how to do something, he or she does recognize the deficit, without yet addressing it.
  3. Conscious Competence – The individual understands or knows how to do something. However, demonstrating the skill or knowledge requires a great deal of consciousness or concentration.
  4. Unconscious Competence – The individual has had so much practice with a skill that it becomes “second nature” and can be performed easily (often without concentrating too deeply). He or she may or may not be able teach it to others, depending upon how and when it was learned.

So this person I met was in the “Unconscious Incompetence” camp.  When I told him about the thing he did not know I also told him how he could find out more about it – but he was not interested.  In the context of the environment in which this person was working, other people do know, so this lack of knowledge on the part of this individual will be noticed.

Related, are those people who get “stuck” in other ways – never learning from mistakes.

Diagnostic Job Interview Questions

These types of interview questions will “ferret out” those people who have and do not have the capability of critical self-assessment and learning from mistakes.   The capability to engage in ongoing critical self-assessments and learning from mistakes is taken as a  predictor of career success or failure.

  1. Discuss the most difficult constructive criticism or feedback you have received. How did you address it? What have you learned from it?
  2. Describe a failure that you have experienced. What role did you play, and what did you learn about yourself?
  3. What have you learned from a mistake?
  4. Please provide an example of a team failure of which you’ve been a part. If given a second chance, what would you do differently?

If you can’t candidly face, discuss, and work on your flaws, or if you try to hide them, blame others, or blame circumstances it shows a lack of self-knowledge and maturity.  Don’t expect to be a viable candidate for senior leadership.

Another common flaw is work-avoidance.  This is the inability to face difficult alternatives in terms of values, procedures, operating styles and power within an organization.  People with work-avoidance will do everything but solve the problem directly.  CEO’s or executives in this situation will do everything to quell the organizational disequilibrium  except face and solve the problem directly.  This is the avoidance mechanism at work.

More related concepts  – Illusory Superiority –

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Written by frrl

May 13, 2010 at 3:37 am

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Making Innovation an Expectation & Celebrating Failure as Learning

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Try this at your company…

At the end of every meeting the chairperson should set aside 15 minutes for anyone who is exploring a new idea.  If no one has anything to say they are told that they are not doing their job.  This process, followed consistently, produces a stream of new ideas and creative thinking.

Jack Welch, former CEO of GE,  used to insist that every meeting include an exchange of new ideas or new techniques.

A “forgive and remember” learning culture…

We celebrated mistakes at a management gathering with 1,000 people in the room. A manager would get up and say why the environmentally sensitive light bulb or whatever it was…had failed…Then we’d give them $1,000 or a TV or something, depending on the scale of the thing. The point was to share the learning and get smarter as an organization. – Jack Welch

An early experience…

Kirsty Wark: “I understand one of the first things you did at GE was blow up the plant you were working in and that it had a profound effect on you. Can you explain?”

Jack Welch: “I did accidentally blow up the plant, yes. I was about 25 and had been experimenting with a different mixture. There was an explosion. I was scared stiff when I went to the manager. But, he was mainly curious as to why I had done what I had done and what I had learnt from it. ‘Would the process I was trying have worked,’ is what interested him!

That real encouragement to get it right rather than a punishment did have a profound effect on me, yes.”

The Innovation Machine at Google

Given the strategy to let a thousand flowers bloom, many products are bound to fail. However, Google executives appear to be undeterred by failure. In fact, Schmidt encourages it: “Please fail very quickly—so that you can try again” is how he described his outlook to the Economist. Similarly, Page told Fortune that he had praised an executive who made a several-million-dollar blunder: “‘I’m so glad you made this mistake. Because I want to run a company where we are moving too quickly and doing too much, not being too cautious and doing too little. If we don’t have any of these mistakes, we’re just not taking enough risk.’” Needless to say, that level of risk tolerance is rare in corporations, despite the widespread belief that error and innovation go hand in hand.
Reverse Engineering Google’s Innovation Machine, Harvard Business Review April 2008

Written by frrl

May 11, 2010 at 4:05 am

On Multiple Intelligences, Minds, and the Education for the Future

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A couple of decades ago (1983), Howard Gardner came up with this idea that IQ (“Intelligence” Quotient) only measures one type of intelligence.  Observation shows that people possess abilities that IQ tests can not measure.  Gardner got the idea that to really understand the full range of human capability it was necessary to extend the concept of “intelligence” beyond the traditional default definition.

Gardner came up with the theory of multiple intelligences.  The belief was that multiple  intelligences better capture the full capability of human being and that an individual, evaluated on traditional IQ tests alone, did not tell the full story on a particular individuals capability.

Here is a list of Gardners 9 intelligences Read the rest of this entry »

Written by frrl

April 24, 2010 at 4:21 pm

Insecurity and the Egoholic

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Half the harm that is done in this world is due to people who want to feel important. They don’t mean to do harm– but the harm does not interest them. Or they do not see it, or they justify it because they are absorbed in the endless struggle to think well of themselves.

— T. S. ELiot

I snagged the quote below off the web (see below).  But first a few comments.

Whoever wrote the quote got it wrong by mixing “egoholic” behavior in political and organizational situations and mapping this to insecurity.

Those is politics who have a desire to control everyone and everything do this out of ego but certainly not out of insecurity.  Quite the opposite.  Folks like Lenin and Marx wanted nothing less than to create a new form of human being and a new form of society – a Utopia – a Paradise on Earth – a workers paradise free from the exploitation of man by man and through the abolition of private property and a class(full) society.

Such a political aspiration to transform human being and society certainly is based on ego, but not concomitantly based on insecurity.

Obama and the Dems that want to control healthcare and everything that can be linked to it have big egos but these actions are not motivated by insecurity – quite the opposite.  If anything, its ego plus ideology and confidence.

Those in organizations who have a desire to control everyone and everything do this out of ego,  insecurity, fear, and self-doubt.  They have the need to find an environment where they can have control to compensate for situations where they have no control and are powerless.

There was this interesting suggestion by Scott Adams the creator of Dilbert …  As a reaction, these people create a fortress of technology competency and an air of superiority which, according to Adams, “is patently a compensation for their powerlessness” within the organization. Scott Adams was referring to people like Dilbert who are at the bottom of the organization and have no management or executive power to determine anything – in short, they are powerless – they do not contribute or control the corporate strategy or direction, control the allocation of resources, make personnel decisions, or even control their own assignments.

The result of this powerlessness can manifest itself as compensation played out as egotistical behavior and desire to control everything and everyone in situations and environments where they can find an opportunity to realize this.  The challenge for these folks is finding environments, situations, and people  where this can be realized.  That is, environments and people who will assent to this type of treatment.  The character of Milton in the movie Office Space is a good example.  Lumbergh can dispatch Milton to a basement office to have him “control the rat population”.  Milton is diminished as a person and Lumbergh can feel good about himself by being able to treat Milton in this way.  Milton and Lumbergh have a sustainable symbiotic relationship as long as each plays their part.  If you saw the movie, you can see what happens when Milton “snapped” and burned the place down out of being treated in this manner.  Milton became his own Lumbergh in this ultimate act of defiance of being powerless.  And so it goes.  ( Watch the Milton clips from Office Space here )

So, bottom line, big egos in politics is based confidence.  Egoholics in organizations .. just may be the facade for underlying insecurity, self-doubt, and compensation for other environments and situations where these folks are powerless.

Here is what I snagged off the internet that got me thinking

The Demise Of The Egoholic

We all know them, we have seen them at school, in work and we see them playing politics on TV and in the news.

The egoholic needs to control people and often to demean and belittle them, in order to validate themselves.

Whatever authority they have relies on their title, their uniform or intimidation.

When I was younger this kind of “authority” was normal, thankfully in modern organisations these characters are increasingly rare.

What drives people to behave this way is their own insecurity.  Insecurity or lack of self-confidence can lead to dramatically different behaviours.  At one end of the spectrum insecurity can lead people to be reticent and hold back, at the other end to be arrogant and intimidating.

The results of egoholic leadership are all around us and are blighting our lives and worse for many.  At the very least we are paying more tax to fund the excesses of egoholic bankers and to pay for the conflicts caused by egoholic politicians.

It is time to say good-bye to the egoholic.  Your drive and determination was valuable in it’s day, it lead us to a far deeper and greater sense of personal responsibility.

Ego and insecurity related to ideology and politics – hardly.
This poem written by Karl Marx

Then I will wander godlike and victorious
Through the ruins of the world
And, giving my words an active force,
I will feel equal to the creator


The bully’s ego is artifice. His arrogance is a hollow confidence. His condescension is a need to belittle. His rage is a need to control. This ego for him is a fragile thing, driven by fear and narcissism, not by power, nor by the power he wishes so desperately to possess. In fact, the bully is actually quite powerless, for he is only as powerful as the power we give him. He feeds on our fear, but his hunger is driven solely by his own.

The key for the bullied is to recognize that the bully’s bullying is not about us — it’s about him, and his weakness. It’s about his sense of being threatened, and his horror at being found out as an imposter or a poser. He is afraid — quite afraid – and all the time. With this recognition that it’s not about us, we can then stand firm, or even push back; thusly not get lost in the self-doubt and self-victimization that potentially perpetuates for us the abusive and socially sadomasochistic relationships in which we might find ourselves by accident, by choice or by default.

The bully is always the weakest kid on the playground. Push back, and watch with compassion as he collapses into a pale reflection of whom he pretends to be.

Related: ( Narcissistic Personality Disorder )

Written by frrl

March 25, 2010 at 4:59 am

Be, Know,Do: Forming character the West Point Way

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Conventional wisdom says that by the time young people reach college, it’s too late to change them. The U.S. Military Academy begs to differ. The civilian world can learn a lot from the way West Point instills values, shapes behaviors, and builds character.

… West Point embarked upon an intense institutional conversation that continues to this day. We questioned our basic assumptions and reexamined our very essence. In a world that had been remade virtually overnight, what was the purpose of the U.S. Military Academy, and how exactly should we go about meeting that obligation?

Check out the article –

Written by frrl

March 21, 2010 at 5:03 am

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