Leadership and management are key aspects of any business.

Ask yourself this: what do you look for in a business investment?

Most venture capitalists or angel investors will say “management".

Sure, investors and bankers are looking for a good business idea in a growth-orientated industry that produces strong cash flow.

However, the bottom line is that investors are more interested in an average business idea backed up by a great management team, than a great business idea with an average management team.

But how do great management teams stay that way?

Well, it's all about people working together well, sharing a common vision, and getting things done.

Try replacing "management" with a related but more focused word: "leadership, leadership, leadership".

Now you have a mantra with real power!

In his book entitled The 21 Irrefutable Laws of Leadership, John C. Maxwell writes that “Leadership ability determines a person’s level of effectiveness.” This truth applies to businesses, not-for-profits, churches, and families alike.

The better the management team is able to lead, the greater the potential for success.

Here’s what you should know about the first law of leadership and management.

One of the first lessons the Up Close Team received from our mentor John Maxwell was on the first law of leadership, otherwise known as the Law of the Lid.

In 2014 the American Management Association named John Maxwell the #1 authority on leadership in North America.

The Business Insider and Inc. magazines reinforced this affirmation, and for good reason! Maxwell often opens his teaching workshops by explaining his first law of leadership.

According to Maxwell, the Law of the Lid “helps people understand the value of leadership.”

Simply put, the Law of the Lid says that “leadership ability is the lid that determines a person’s (or an organization’s) level of effectiveness. The lower the individual’s ability to lead, the lower the lid on his (or her) potential. The higher the individual’s ability to lead, the higher the lid to his (or her) potential.”

For example, if your leadership experience and ability rates 7 on a scale of 1 to 10, then your effectiveness as a leader or the effectiveness of your leadership team can never exceed 6.

If your leadership rates 4, the effectiveness of your leadership can never exceed 3.

How many times have you watched a business open with a great idea in a great location only to close within a few short years?

Many might blame the economy or cash flow for the failure. The truth is more likely a lack of leadership effectiveness.

Changing your leadership level.

Just because a person's leadership level rates 4 now doesn't mean it has to stay that way.

Leadership and management skills can be taught. People can improve, and those changes have far reaching power.

Leadership requires perseverance, communication, and good habits. To learn more about the 3 key habits of leadership, read this blog post.

As a mentor, coach, and trainer working with hundreds of not-for-profit corporations, I have seen the impact changes at the board and management level have on organizational performance.

Empower your management team to lead well and your organization will soar.

Every person can raise the lid on their leadership effectiveness. Most of us can benefit from improving our people, strategic planning, and communication skills.

We can all learn to share our vision more clearly and give the people in our organization the leadership they need to achieve results.

If you want to learn more about how you can gain momentum in your organization, click here.

Call to action:

1. Take a few moments to assess your leadership and management effectiveness on a scale of 1 to 10, with 1 being not very effective, and 10 being highly effective.
2. Identify 5 strategies you should undertake to raise your leadership lid.
3. Ask others to rate your leadership. Talk to your spouse, fellow board members, boss and a couple of colleagues. Use the same scale to rate your leadership in the following areas:

• People skills
• Planning and strategic thinking
• Vision
• Achieving results

4. Identify 5 strategies you should undertake to raise your leadership lid.

Leaders, we all have the capacity to change and to raise our leadership lid.

Change…it starts with you.

The best is yet to come. It starts with you.

Your friends,
The UpCloseTeam

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This article was originally published on March 23, 2018 and has been updated.