Law of the Lid

Originally posted 11 August 2014

“They were efficient managers. But they were not leaders.” – John C. Maxwell

Leadership and management together define the effectiveness of an organization. Together they form the following 2×2 matrix, based on The Law of the Lid

The Law of the Lid

John C. Maxwell states that leadership ability is the lid, or cap, on your organization’s capacity to become effective. Why? You may ask. Because dedication to success (operational excellence) is easy to achieve. Developing leaders is underappreciated and more difficult.

At the same time, it is a multiplier, wherein the lower bar an increase in management will increase your effectiveness by 4 units, an increase in leadership will add 8. In the upper left the exact opposite is happening, but this scenario is quite uncommon for reasons explained below.

Management

Success dedication, or management, determines how good a strategy can be executed. In The 21 Irrefutable Laws of Leadership, Maxwell explains how the McDonald brothers were great at building their restaurant business, but not in starting the franchises that make it such an international success.

On a more personal level it means that no matter how good you are at executing your tasks and organizing your work – without leadership you will never achieve more than possible by one single person.

Leadership

Leadership ability determines what strategy needs to be followed. In The Effective Executive, Drucker explains how a leader is the decision maker within an organization. It is up to a leader to make the right decisions, at the right time. A leader makes people believe in a vision, and rigorously works to turn this vision into a reality. Where leadership is lacking teams lose, where leadership is lacking you need to improve your leadership or make way for new leadership.

Examples

Bad Leadership, Good Management – Kodak in the past – it was able to be the most efficient in producing camera’s but were too late to profit from the switch to digital camera’s
Good Leadership, Bad Management – Imagine a visionary within solar energy who forgets that he has to deal with governments, rules, and regulations and loses because of details
Good Leadership, Good Management – Elon Musk has a vision, he knows what he wants to change, he leads effective teams and shows how together both aspects can lead to 100% efficiency

When to Use

Use this framework to evaluate your own effectiveness. Is your organization (team/group/family) listening to you, and are you taking the right route? Determine where you are still slacking and use the matrix to define where you first need to improve (the area that has the most impact). Use the framework in conjunction with the remaining 20 laws of leadership and you will be guaranteed to become more effective.

“That is why in times of trouble, organizations naturally look for new leadership.” – John C. Maxwell