I first heard of the Law of the Lid in John Maxwell’s “21 Indisputable Laws of Leadership” which I first read when I was in my High School years. It was a fascinating concept. I realize now that this concept can be applied even to my work and my team.
Before I continue, I’d first like to define efficiency for this article’s purposes:
“Efficiency is the measurement of productivity in a given amount of time.”
The truth is, there are people who are resistant to change. And for most of the world’s population, this is the case. They will do what they know how to do – and do it over and over and over again in an attempt to reach the goal they were tasked for.
There’s another end of the spectrum – we’re afraid to fail. And for the majority, anything in the unknown leans toward the avenue of failure.
There are people in organizations today who I’d categorize as hard but stagnant workers. Let’s call these kinds of people ‘Team A’. They work extremely hard that they always get 1 point of productivity per time but they don’t grow to innovate any form of solution to improve their efficiency. In fact, here’s how their productivity and efficiency level looks like:
Then there’s this other set of people who are adaptive to the new technologies and solutions they can take advantage of in making their work easier and more efficient. Let’s call them ‘Team B’. They may not be as hardworking as Team A but they are able to make more efficient use of their time by other means they have discovered to be useful such as tools for project management, time management, and marketing, among other things. Here’s how Team B’s productivity and efficiency level looks like:
Now let’s do the math. For Team A, their hard work has produced a solid 10. That’s not so bad. For every time spent, they are able to make 1 productivity point. Let’s take a look at Team B’s output. For every time spent, they were able to make 3, 3 and 4 productivity points – which adds up to a 10.
Meaning, if they invest the same time working as Team A did, they would be far more productive than team A.
Here lies the problem. 90% of today’s workforce are hard workers – period. They are given a process, they are given something to learn from, they are given a set of tasks and they grind and grind and grind.
These people are good soldiers but they miss out on the opportunity to become strategists – which give 10x more value in winning the war than a soldier. So what’s in between working hard and working smart? You may not believe it, but I think it’s the little sparks of brilliance we’ve come to know as innovation.
When I started SEO Hacker, I wasn’t at all a guy who knows a lot of stuff. All I knew was the basics and how to amplify them through innovations I’ve done along the way. I learn those little innovative solutions by reading a lot and applying myself.
Today, SEO Hacker employs numerous tools in our digital marketing arsenal. All of which are useful in helping us improve the rankings of our clients and generate revenue for their business.
The chart above depicts that a hard working team can produce 10 productivity points in a time-frame of 10 while a hard and smart working team will have a productivity point of 50!
Chart Calculation of Team B’s Productivity Points: (1 + 1 + 2 + 3 + 4 +6 + 7 + 8 + 8 + 10)
That’s a 500% lift in productivity points for the same time frame.
Which means that Team B has a 500% lift in efficiency!
The ironic thing about working smart is that you have to work hard to innovate a solution for efficiency (a new tool you could use, a new process you could implement, a new technique you could share to the team, etc.). Innovation doesn’t “just come”. It takes a lot of grit and initiative to finally tell yourself to forget the status quo and find something new.
If you could grind and grind and grind in hard work doing the same things over again, push yourself to transfer that same effort you’re exerting into the first phase of innovation: Discovery.
Innovation, in this case takes on a process with 3 possible outcomes:
1) If the innovation is a success and is accepted = Discovery -> Evaluation -> Trial -> Analysis -> Implementation -> Documentation -> Reporting
2) If the innovation is a failure = Discovery -> Evaluation -> Trial -> Analysis -> Documentation -> Reporting -> (Repeat)
3) If the innovation is a success and is facing friction in acceptance = Discovery -> Evaluation -> Trial -> Analysis -> Documentation -> Reporting -> Implementation
Let me break down each module:
Discovery is when you are able to find a possible solution through rigid and guided research that can help you improve your efficiency. Either this solution solves a problem, reduces friction in a process you employ, or amplifies your productivity for the same effort you need to put in. You’re not 100% sure if it will do what you assume it will do since you have not personally tried the solution but you have a pretty good guess based on knowledge, experience, and guts.
Evaluation is when you are able to learn more about the possible solution – the costs, ROI, feasibility, time-frame and difficulty of implementation, etc., and you find that it makes sense for you and your team to try this on.
Trial is when you try out the solution for the first time. This is where you will really be able to complete the evaluation process through a hands-on experience.
Analysis is when you look back on your evaluation and trial and see if the actual results of the trial are at par with your assumptions. If it is at par or it positively exceeds your assumptions, then you proceed to implementation.
Implementation is when you finally communicate to your team and the rest of the company that the solution you discovered is a good fit for increasing individual or overall efficiency. It will either be accepted or you will face resistance to this change.
Documentation is when you record the events between evaluation, trial and implementation. In this phase, you have to be as specific and detailed as you can – whether the solution you discovered is a good fit for your team or not so you will be able to fruitfully learn through the innovation process.
Reporting is when you finally are able to present to your peers everything that has transpired throughout the evaluation and implementation period whether good or bad. In the case of friction in acceptance, reporting should be able to prove that the solution is fit for implementation with facts.
There are lots of companies out there putting “Innovation” in their company values, and sometimes in their mission/vision statement – but they have no idea how to do it or what it really means/entails.
I hope that this entry will help you find the way to innovation for the purpose of maximizing efficiency in your work and in your team.
If you’re wondering about the Law of the Lid, here’s the adaptation from John Maxwell’s “The 21 Irrefutable Laws of Leadership”
Leadership Ability Determines a Person’s 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 person’s level of effectiveness. The lower an individual’s ability to lead, the lower the lid on his potential. The higher the individual’s 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 ability—for better or for worse—always determines your effectiveness and the potential impact of your organization.
Let me tell you a story that illustrates the Law of the Lid. In 1937, two young brothers named Dick and Maurice opened a small drive-in restaurant in Pasadena, California, located just east of Glendale. Their 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. Their business exploded. Annual sales reached $200,000.
In 1948, their intuition told them that times were changing, and they made modifications to their restaurant business. They streamlined everything. They reduced their menu and focused on selling hamburgers. They created what they called the Speedy Service System, in which their kitchen became like an assembly line, where each employee focused on service with speed. The brothers’ goal was to fill each customer’s 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, to see a neon sign that said simply MCDONALD’S HAMBURGERS. Dick and Maurice McDonald had hit the great American jackpot, but they never went any farther because their weak leadership put a lid on their ability to succeed.
The McDonald brothers’ genius was in customer service and kitchen organization. That talent led to the creation of a new system of food and beverage service. But in 1952, when they tried marketing the McDonald’s concept, their effort was a dismal failure. The reason was simple. They lacked the leadership necessary to make a larger enterprise effective. Dick and Maurice were good single-restaurant owners. They understood how to run a business, make their systems efficient, cut costs, and increase profits. They were efficient managers. But they were not leaders. Their thinking patterns clamped a lid down on what they could do and become. 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. As soon as he visited the store, he had a vision for its potential. In his mind he could see the restaurant going nationwide in hundreds of markets. He soon struck a deal with Dick and Maurice, and in 1955, he formed McDonald’s Systems, Inc. (later called the McDonald’s Corporation).
And the leadership lid in Ray Kroc’s life was sky high. Between 1955 and 1959, Kroc succeeded in opening 100 restaurants. Four years after that, there were 500 McDonald’s. 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.
I believe that success is within the reach of just about everyone. But I also believe that personal success without leadership ability brings only limited effectiveness. Without leadership ability, a person’s impact is only a fraction of what it could be with good leadership. Whatever you will accomplish is restricted by your ability to lead others.
Let me give you a picture of what I mean. Let’s say that when it comes to success, you’re an 8 (on a scale from 1 to 10). That’s pretty good. I think it would be safe to say that the McDonald brothers were in that range. But let’s also say that in leadership you’re functioning as a 1. To increase your level of effectiveness, you have a couple of choices. You could work very hard to increase your dedication to success and excellence—to work toward becoming a 10 in that area. It’s possible that, with a lot of effort, you could make it to that level.
But you have another option. You can work hard to increase your level of leadership. By raising your leadership ability—without necessarily increasing your success dedication at all—you can increase your original effectiveness a tremendous amount. That’s because leadership has a multiplying effect. I’ve seen its impact again and again in all kinds of businesses and nonprofit organizations. And that’s why I’ve taught leadership for more than thirty years.
I hope this article helps you out in maximizing efficiency in your work. Please let me know your thoughts or how this article has helped you in the comments section below.
