1: The Law of the Lid

Leadership ability is likened to a lid that caps a person's achievement potential. A highly talented individual who is capable of great personal performance is still limited to what can be achieved by the work of his own two hands. Until he learns to give leadership to others, he can achieve no more than that.


The author recounts the shopworn case study of Ray Kroc and his transformation of McDonald's restaurants, though in a bit more accurate detail than has been done elsewhere:

In this retelling, much was accomplished by Dick and Maurice McDonald: they came up with the idea of the restaurant catering to motorists, the streamlined menu, and the production-line kitchen capable of creating food fast and cheap, and made quite a profit in doing so.

Other restaurant owners came to them to learn their methods, and they struck on the idea of franchising: selling their brand and system to others and taking a cut of the profits of many restaurants. The problem was, while they were good restaurant owners and highly efficient managers, they weren't very good leaders, and could not enable their franchisees to succeed.

This is where Ray Kroc steps in, not as a person who knew how to make a restaurant succeed, but as one who knew how to lead others to be successful in replicating a business model created by the McDonald brothers. This is the effect of the leadership "lid" on the McDonald's.

Personal Achievement versus Leadership

Success at doing something as an individual is within the reach of just about everyone, but personal success without leadership ability limits them to what they can do alone.

Greater success requires the cooperation of many people - it requires leadership. As such, the more you want to accomplish, the more you will need leadership skills.

The two are entirely different: if your output is ten and you want to raise that to twenty, you have to double your productive capacity. It would take a great deal of effort and energy to do so if you are already fairly competent.

However, if you can find ten other people and teach them to produce almost as well as you, such that their output is at eight, then your total output increases from ten to eighty (given that you are not producing, but devote all your time to leading others). The task of doing this is much easier, and it doesn't merely double your output, but increases it times-eight.

If each of these ten people can train ten others to produce at a level of six, then outcome increases from eighty to six hundred. And that is the key value of leadership: with greater effort, a single person can multiply their own output; but if effort is applied to leadership rather than task-competence, the output grows exponentially.

To Grow the Organization, Change the Leader

The author presents a case-study of a chain of hotels that grows by expansion, buying out failing properties and turning them around. Their game plan on acquiring a property invariably includes two steps: first, train the staff to provide better customer service; second, fire the leader. The theory is that if the leader had been any good, the property wouldn't have been in such a mess that it was more profitable to sell than continue to operate.

The same is seen in many organizations: when a company is floundering, it is the CEO; when a church is floundering, it is the senior pastor; when a team is floundering, it hires a new coach; when a country is floundering, it replaces its political leader. And a plethora of historical evidence demonstrates that this is very often highly effective in turning things around.