Encoded by: Dhon Reyes NOT FOR SALE! 1/135 [email protected] THE 21 IRREFUTABLE LAWS OF LEADERSHIP FOLLOW THEM AND PEO PLE WILL FOLLOW YOU JOHN C. MAXWELL THOMAS NELSON PUBLISHERS NASHVILLE Copyright © 1998 by Maxwell Motivation, Inc., a Georgia corporation All rights reserved. Written permission must be secured from the publisher to use or reproduce any part of this book, except for brief quotations in critical reviews or articles. Scripture quotations noted CEV are from THE CONTEMPORARY ENGLISH VERSION. © 1991 by the American Bible Society. Used by permission. Published in Nashville, Tennessee, by Thomas Nelson, Inc. ISBN 0-7852-7431-6 To the hundreds of thousands of people to whom I’ve taught leadership over the years through conferences and books … and To you— the person wanting to become a better leader because everything rises and falls on leadership CONTENTS Encoded by: Dhon Reyes NOT FOR SALE! 2/135 [email protected] FOREWORD Acknowledgments Introduction 1. The Law of the Lid Leadership Ability Determines a Person’s Level of Effectiveness Brothers Dick and Maurice came as close as they could to living the American Dream— without making it. Instead a guy named Ray did it with the company they had founded. It happened because they didn’t know the Law of the Lid. 2. The Law of Influence The True Measure of Leadership Is Influence—Nothing More, Nothing Less Her husband had everything: wealth, privilege, position, and a royal title. Yet instead of him, Princess Diana won over the whole world. Why? She understood the Law of Influence. 3. The Law of Process Leadership Develops Daily, Not in a Day Theodore Roosevelt helped create a world power, won a Nobel Peace Prize, and became president of the United States. But today you wouldn’t even know his name if he hadn’t known the Law of Process. 4. The Law of Navigation Anyone Can Steer the Ship, But It Takes a Leader to Chart the Course Using a fail-safe compass, Scott led his team of adventurers to the end of the earth—and to inglorious deaths. They would have lived if only he, their leader, had known the Law of Navigation. 5. The Law of E. F. Hutton When the Real Leader Speaks, People Listen Young John went into his first board meeting thinking he was in charge. He soon found out who the real leader was and learned the Law of E. F. Hutton in the process. 6. The Law of Solid Ground Trust Is the Foundation of Leadership If only Robert McNamara had known the Law of Solid Ground, the War in Vietnam—and everything that happened at home because of it—might have turned out differently. Encoded by: Dhon Reyes NOT FOR SALE! 3/135 [email protected] 7. The Law of Respect People Naturally Follow Leaders Stronger Than Themselves The odds were stacked against her in just about every possible way, but thousands and thousands of people called her their leader. Why? Because they could not escape the power of the Law of Respect. 8. The Law of Intuition Leaders Evaluate Everything With a Leadership Bias How is it that time after time Norman Schwarzkopf was able to sense problems while other leaders around him got blindsided? The answer lies in the factor that separates the great leaders from the merely good ones: the Law of Intuition. 9. The Law of Magnetism Who You Are Is Who You Attract Why are the Dallas Cowboys, once revered as “America’s Team,” now so often reviled and the subject of controversy? The Law of Magnetism makes it clear. 10. The Law of Connection Leaders Touch a Heart Before They Ask for a Hand Elizabeth Dole has mastered it. If husband Bob had done the same, he might have become the forty-third president of the United States. It’s called the Law of Connection. 11. The Law of the Inner Circle A Leader’s Potential Is Determined By Those Closest to Him John already used time management to the fullest, but he wanted to accomplish more. His priorities were already leveraged to the hilt, and there were no more minutes in a day! How did he go to a new level? He practiced the Law of the Inner Circle. 12. The Law of Empowerment Only Secure Leaders Give Power to Others Henry Ford is considered an icon of American business for revolutionizing the automobile industry. So what caused him to stumble so badly that his son feared Ford Motor Company would go out of business? He was held captive by the Law of Empowerment. 13. The Law of Reproduction It Takes a Leader to Raise Up a Leader Encoded by: Dhon Reyes NOT FOR SALE! 4/135 [email protected] What do the top NFL head coaches have in common? You can trace their leadership ability to just a handful of mentors. That’s also true for hundreds of CEOs. More than 80 percent of all leaders are the result of the Law of Reproduction. 14. The Law of Buy-In People Buy Into the Leader, Then the Vision The first time Judy Estrim started up a company, it took her six months to find the money. The second time it took her about six minutes. What made the difference? The Law of Buy- In. 15. The Law of Victory Leaders Find a Way for the Team to Win What saved England from the Blitz, broke apartheid’s back in South Africa, and won the Chicago Bulls multiple world championships? In all three cases the answer is the same. Their leaders lived by the Law of Victory. 16. The Law of the Big Mo Momentum Is a Leader’s Best Friend Jaime Escalante has been called the best teacher in America. But his teaching ability is only half the story. His and Garfield High School’s success came because of the Law of the Big Mo. 17. The Law of Priorities Leaders Understand that Activity Is Not Necessarily Accomplishment Jack Welch took a company that was already flying high and rocketed it into the stratosphere. What did he use as the launching pad? The Law of Priorities, of course. 18. The Law of Sacrifice A Leader Must Give Up to Go Up He was one of the nation’s most vocal critics on government interference in business. So why did Lee Iacocca go before Congress with his hat in his hand for loan guarantees? He did it because he understood the Law of Sacrifice. 19. The Law of Timing When to Lead Is as Important as What to Do and Where to Go It got him elected president of the United States. It also cost him the presidency. What is it? Something that may stand between you and your ability to lead effectively. It’s called the Law of Timing. Encoded by: Dhon Reyes NOT FOR SALE! 5/135 [email protected] 20. The Law of Explosive Growth To Add Growth, Lead Followers—To Multiply, Lead Leaders How did a man in a developing country take his organization from 700 people to more than 14,000 in only seven years? He did it using leader’s math. That’s the secret of the Law of Explosive Growth. 21. The Law of Legacy A Leader’s Lasting Value Is Measured By Succession When many companies lose their CEO, they go into a tailspin. But when Roberto Goizueta died, Coca-Cola didn’t even hiccup. Why? Before his death, Goizueta lived by the Law of Legacy. Conclusion FOREWORD YOU ARE GOING TO LOVE THIS BOOK—WHETHER IT IS THE FIRST LEADERSHIP BOOK IN YOUR COLLECTION OR THE FIFTIETH—BECAUSE YOU CAN IMMEDIATELY APPLY THE LIFE-CHANGING PRINCIPLES AND PROCEDURES IN YOUR PERSONAL, FAMILY AND BUSINESS LIFE. THERE IS NO “IVORY TOWER” THEORY IN THIS BOOK. INSTEAD, IT IS LOADED WITH UNCHANGING LEADERSHIP PRINCIPLES CONFIRMED BY THE REAL-WORLD EXPERIENCES OF JOHN MAXWELL AND THE MANY PEOPLE HE WRITES ABOUT. The 21 Irrefutable Laws of Leadership is a powerful, definitive statement of the timeless laws you simply must follow if you want to be a great leader—at home, on the job, in church, or whenever you are called on to lead. In each chapter, John goes straight to the heart of a profound leadership law, showing you through the successes and failures of others how you can apply the law in your life. And you can apply each of the laws. If you’re a willing student, you can learn the 21 laws and put them into practice. What a priceless treasure leadership authority John Maxwell offers as he boils everything he’s learned about leadership down to such a usable form! Once you apply these leadership laws, you’ll notice leaders all around you putting into action (or breaking) the Law of W.F. Hutton, the Law of the Big Mo, and the rest. I heartily recommend The 21 Irrefutable Laws of Leadership. It is helpful and easy to read, yet profound in its depth and clarity. It’s loaded with hope, direction, encouragement, and specific procedures. It’s principle-based with precise, clear-cut directions to provide you with the necessary tools to fulfill your leadership role. If you are new to leadership, this book will jump-start your leadership career. If you are an experienced leader with blue-chip credentials this book will make you an even better leader. It’s good—very good. Zig Ziglar Encoded by: Dhon Reyes NOT FOR SALE! 6/135 [email protected] ACKNOWLEDGMENTS I’D LIKE TO THANK THE MANY LEADERS WHO HELPED ME WHILE I WAS WORKING ON THIS BOOK. FROM INJOY: DICK PETERSON, DAVE SUTHERLAND, DAN REILAND, TIM ELMORE, AND DENNIS WORDEN. FROM THOMAS NELSON: ROLF ZETTERSTEN, RON LAND, MIKE HYATT, VICTOR OLIVER, AND ROB BIRKHEAD. I must say thank you to Brian Hampton, my managing editor at Nelson, for his patience and assistance as we worked through the manuscript. I also want to thank my assistant, Linda Eggers, whose great heart and incredible service make me a better leader. Finally, I want to thank Charlie Wetzel, my writer, and his wife, Stephanie. This book would not have been written without their help. INTRODUCTION I HAVE THE PRIVILEGE OF TEACHING LEADERSHIP ACROSS THE COUNTRY AND AROUND THE GLOBE, AND I OFTEN GET THE OPPORTUNITY TO TALK WITH PEOPLE WHO ARE ATTENDING ONE OF MY CONFERENCES FOR A SECOND, THIRD, OR EVEN FOURTH TIME. AT A RECENT CONFERENCE HERE IN THE UNITED STATES, A MAN IN HIS LATE FIFTIES WHOM I HAD MET SEVERAL YEARS BEFORE CAME UP AND SPOKE TO ME DURING A BREAK. HE GRABBED MY HAND AND SHOOK IT VIGOROUSLY. “LEARNING LEADERSHIP HAS CHANGED MY LIFE,” HE SAID. “BUT I SURE WISH I HAD HEARD YOU TWENTY YEARS AGO.” “No, you don’t,” I answered with a chuckle. “What do you mean?” he said. “I would have achieved so much more! If I had known these leadership principles twenty years ago, I’d be in a totally different place in life. Your leadership laws have fueled my vision. They’ve given me the desire to learn more about leadership and accomplish my goals. If I’d learned this twenty years ago, I could have done some things that I had never even dreamed possible.” “Maybe you would have,” I answered. “But twenty years ago, I wouldn’t have been able to teach them to you. It has taken me my entire lifetime to learn and apply the laws of leadership to my life.” As I write this, I am fifty-one years old. I’ve spent more than thirty years in professional leadership positions. I’ve founded four companies. And I focus my time and energy on doing what makes a positive impact in the lives of people. But I’ve also made a lot of mistakes along the way—more than most people I know. Every success and every failure has been an invaluable lesson in what it means to lead. As I travel and speak to organizations and individuals, people frequently ask me to define the essentials of leadership. “If you were to take everything you’ve learned about leadership over the years and boil it down into a short list,” they ask, “what would it be?” This book is my answer to that often-asked question. It has taken me a lifetime to learn these 21 Irrefutable Laws of Leadership. My desire is to communicate them to you as simply and clearly as possible. And it sure won’t hurt if we have some fun along the way. Encoded by: Dhon Reyes NOT FOR SALE! 7/135 [email protected] One of the most important truths I’ve learned over the years is this: Leadership is leadership, no matter where you go or what you do. Times change. Technology marches forward. Cultures vary from place to place. But the true principles of leadership are constant—whether you’re looking at the citizens of ancient Greece, the Hebrews in the Old Testament, the armies of the last two hundred years, the rulers of modern Europe, the pastors in local churches, or the businesspeople of today’s global economy. Leadership principles stand the test of time. They are irrefutable. As you read the following chapters, I’d like you to keep in mind four ideas: 1. The laws can be learned. Some are easier to understand and apply than others, but every one of them can be acquired. 2. The laws can stand alone. Each law complements all the others, but you don’t need one in order to learn another. 3. The laws carry consequences with them. Apply the laws, and people will follow you. Violate or ignore them, and you will not be able to lead others. 4. These laws are the foundation of leadership. Once you learn the principles, you have to practice them and apply them to your life. Whether you are a follower who is just beginning to discover the impact of leadership or a natural leader who already has followers, you can become a better leader. As you read about the laws, you’ll recognize that you may already practice some laws effectively. Other laws will expose weaknesses you didn’t know you had. But the greater the number of laws you learn, the better leader you will become. Each law is like a tool, ready to be picked up and used to help you achieve your dreams and add value to other people. Pick up even one, and you will become a better leader. Learn them all, and people will gladly follow you. Now, let’s open the toolbox together. THE LAW OF THE LID LEADERSHIP ABILITY DETERMINES A PERSON’S LEVEL OF EFFECTIVENESS Encoded by: Dhon Reyes NOT FOR SALE! 8/135 [email protected] 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 leadership, the greater the effectiveness. 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 1930, two young brothers named Dick and Maurice moved from New Hampshire to California in search of the American Dream. They had just gotten out of high school, and they saw few opportunities back home. So they headed straight for Hollywood where they eventually found jobs on a movie studio set. After a while, their entrepreneurial spirit and interest in the entertainment industry prompted them to open a theater in Glendale, a town about five miles northeast of Hollywood. But despite all their efforts, the brothers just couldn’t make the business profitable. In the four years they ran the theater, they weren’t able to consistently generate enough money to pay the one hundred dollars a month rent that their landlord required. A NEW OPPORTUNITY THE BROTHERS’ DESIRE FOR SUCCESS WAS STRONG, SO THEY KEPT LOOKING FOR BETTER BUSINESS OPPORTUNITIES. IN 1937, THEY FINALLY STRUCK ON SOMETHING THAT WORKED. THEY OPENED A SMALL DRIVE-IN RESTAURANT IN PASADENA, LOCATED JUST EAST OF GLENDALE. PEOPLE IN SOUTHERN CALIFORNIA HAD BECOME VERY DEPENDENT ON THEIR CARS, AND THE CULTURE WAS CHANGING TO ACCOMMODATE THAT, INCLUDING ITS BUSINESSES. Drive-in restaurants were a phenomenon that sprang up in the early thirties, and they were becoming very popular. Rather than being invited into a dining room to eat, customers would drive into a parking lot around a small restaurant, place their orders with carhops, and receive their food on trays right in their cars. The food was served on china plates complete with glassware and metal utensils. It was timely idea in a society that was becoming faster paced and increasingly mobile. Dick and Maurice’s tiny drive-in restaurant was a great success, and in 1940, they decided to move the operation to San Bernardino, a working-class boom town fifty miles east of Los Angeles. They built a larger facility and expanded their menu from hot dogs, fries, and shakes to include barbecued beef and pork sandwiches, hamburgers, and other items. 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. In 1948, their intuition told them that times were changing, and they made modifications to their restaurant business. They eliminated the carhops and started serving only walk-up customers. And they also streamlined everything. They reduced their menu and focused on selling hamburgers. They eliminated plates, glassware, and metal utensils, switching to paper products instead. They reduced their costs and the prices they charged customers. They also created what they called the Speedy Service System. Their kitchen became like an assembly line, Encoded by: Dhon Reyes NOT FOR SALE! 9/135 [email protected] where each person focused on service with speed. Their 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 by their small restaurant on the corner at Fourteenth and E Streets in San Bernardino. On the front of the small octagonal building hung a neon sign that said simply MCDONALD’S HAMBURGERS. Dick and Maurice McDonald 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 put a lid on their ability to succeed. THE STORY BEHIND THE STORY IT’S TRUE THAT THE MCDONALD BROTHERS WERE FINANCIALLY SECURE. THEIRS WAS ONE OF THE MOST PROFITABLE RESTAURANT ENTERPRISES IN THE COUNTRY, AND THEY FELT THAT THEY HAD A HARD TIME SPENDING ALL THE MONEY THEY MADE. THEIR GENIUS WAS IN CUSTOMER SERVICE AND KITCHEN ORGANIZATION. THAT TALENT LED TO THE CREATION OF A NEW SYSTEM OF FOOD AND BEVERAGE SERVICE. IN FACT, THEIR TALENT WAS SO WIDELY KNOWN IN FOOD SERVICE CIRCLES THAT PEOPLE STARTED WRITING THEM AND VISITING FROM ALL OVER THE COUNTRY TO LEARN MORE ABOUT THEIR METHODS. AT ONE POINT, THEY RECEIVED AS MANY AS THREE HUNDRED CALLS AND LETTERS EVERY MONTH. That led them to the idea of marketing the McDonald’s concept. The idea of franchising restaurants wasn’t new. It had been around for several decades. To the McDonald brothers, it looked like a way to make money without having to open another restaurant themselves. In 1952, they got started, but their effort was a dismal failure. The reason was simple. They lacked the leadership necessary to make it effective. Dick and Maurice were good 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. THE BROTHERS PARTNER WITH A LEADER IN 1954, THE BROTHERS HOOKED UP WITH A MAN NAMED RAY KROC WHO WAS A LEADER. KROC HAD BEEN RUNNING A SMALL COMPANY HE FOUNDED, WHICH SOLD MACHINES FOR MAKING MILK SHAKES. HE KNEW ABOUT MCDONALD’S. THEIR RESTAURANT WAS ONE OF HIS BEST CUSTOMERS. AND 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 SYSTEM, INC. (LATER CALLED THE MCDONALD’S CORPORATION). Kroc immediately bought the rights to a franchise so that he could use it as a model and prototype to sell other franchises. Then he began to assemble a team and build an organization to make McDonald’s a nationwide entity. He recruited and hired the sharpest people he could find, Encoded by: Dhon Reyes NOT FOR SALE! 10/135 [email protected]