In leadership circles, there’s a well-known principle popularized by John C. Maxwell: the Law of the Lid. It states that leadership ability is the lid that determines a person’s level of effectiveness—and by extension, an organization’s potential. If the leadership lid is low, no matter how talented or motivated the people within the organization are, their impact and performance will be capped. 

This principle is more relevant than ever; we see it in almost every conversation we have. Organizations face a constant stream of disruption—from technological shifts and changing consumer behaviors to cultural movements and workforce demands. The ability to evolve and stay aligned with purpose is critical. And yet, many companies falter not because the change is too hard or the resources are too scarce, but because their leaders refuse to lift the lid. 

Or, alternatively, a CEO will hire someone and task them with “driving change or transformation.” And when that person begins pushing for new ways of thinking or operating, the CEO often freezes. They liked the idea of change—but when it starts getting real, they pull back, unwilling to support the very initiatives they hired for. This creates even more chaos: those who were energized by the new direction lose faith in the CEO’s commitment and often leave. Meanwhile, the resistors sense the lack of leadership backing, seize the opportunity, and reinforce the narrative that change is dangerous. More often than not, the CEO buys into it. 

Case in Point: The Decline of Bed Bath & Beyond 

To understand how damaging a low leadership lid can be, consider the once-thriving home goods retailer Bed Bath & Beyond. 

For decades, the company enjoyed tremendous success by offering an expansive assortment of products and an iconic coupon-driven pricing model that kept customers coming back. However, as the retail world shifted, Bed Bath & Beyond stood still. E-commerce was exploding, consumer tastes were evolving, and agile competitors like Amazon and Target were rapidly adapting. Bed Bath & Beyond’s leadership, however, remained anchored in the past. 

Rather than modernizing their brand, streamlining inventory, or investing meaningfully in digital transformation, the company clung to outdated strategies. Multiple CEO’s came and went with  

By 2023, the retailer filed for bankruptcy, closing stores across the nation and ending a retail era that could have evolved but didn’t. It wasn’t the market that killed Bed Bath & Beyond. It was the leadership’s unwillingness to change.1 

The Real Impact of Leadership Inertia 

What happened at Bed Bath & Beyond isn’t an anomaly—it’s a cautionary tale. When leaders fail to evolve, the ripple effects reach every corner of the organization: 

  • Strategic stagnation: Innovation dries up when leaders aren’t willing to challenge the status quo. Teams become risk-averse, sticking to what’s familiar even if it’s failing. 
  • Cultural decay: Culture flows from the top. If leaders aren’t modeling adaptability, trust, and transparency, a culture of fear, confusion, or apathy will take hold. 
  • The talent drain: High performers don’t stay in environments where they feel stifled. They seek out organizations where their contributions are valued, and growth is possible. 
  • Brand erosion: Customers sense when a company is behind the times. Loyalty wanes, and competitors seize the opportunity to fill the gap. 

Leadership is not about maintaining the status quo—it’s about stewarding the future. That means having the courage to face uncomfortable truths, listen to dissenting voices, and take decisive action even when it’s risky or unpopular. 

Raising the Lid: What Great Leaders Do Differently 

To lift the lid, leaders must first lift themselves. That begins with self-awareness and a willingness to change. Here’s how effective leaders unlock greater organizational potential: 

  1. Create a culture of getting uncomfortable Great leaders know they don’t have all the answers. They build environments where experimentation is encouraged, failure is seen as feedback, and learning is ongoing. Growth comes when you’re being challenged / stretched and when things get hard, and you learn how to work through it. Each time you do that it raises your growth ceiling. 
  1. They invest in strategic clarity. Vision without execution is just aspiration. Strong leaders communicate clear direction, align teams around common goals, and empower others to act boldly. 
  1. They develop other leaders. A high leadership lid is shared, not hoarded. Growing future leaders ensures the organization’s capacity expands beyond the current team. 
  1. They stay grounded in purpose. Especially in times of change, anchoring decisions in the organization’s deeper “why” enables both agility and authenticity. 
  1. They own their part. Effective leaders ask themselves, ‘What can I do as a leader to GAIN better self-awareness?’ They ask their people for honest feedback, either through one-on-ones or 360’s. 
  1. Know their business. Great leaders understand which leadership capabilities are needed at their own organization and which ones are lacking or need to be improved. 

Conclusion: Don’t Be the Lid 

If you’re a leader, the hard truth is this: you are either lifting the organization up or holding it back. The market will continue to evolve, and your people will continue to look to you for direction. What they need is not perfection, but movement—evidence that you’re willing to adapt, to listen, and to lead forward. 

Every time you resist change, avoid a tough conversation, or settle for mediocrity, the lid tightens. But when you step into courage, model transformation, and prioritize long-term impact over short-term comfort, you raise the lid—not just for yourself, but for everyone who counts on you. 

1Peterson, H. (2023, April 23). “Bed Bath & Beyond files for bankruptcy after years of declining sales.” CNBC. https://www.cnbc.com/2023/04/23/bed-bath-and-beyond-files-for-bankruptcy.html 

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