#18 The Law of Sacrifice

From the book “The 21 Laws of Leadership” by John C. Maxwell

#18 The Law of Sacrifice - A Leader Must Give Up to Go Up

One of the most dramatic turnarounds in American business history demonstrates the Law of Sacrifice.  It happened at the Chrysler Corporation in the 80’s.  The company was an absolute disaster having fallen from the #2 automaker in 1940 to a looming bankruptcy.  Its recipe for success had been its innovative engineering - Chrysler designed the 1st electronic ignition, hydraulic brakes, and under-the-hood computer. Its cars were know for their high performance and power in the street racing circuit with models including the Barracuda, Dodge Daytona, and Plymouth Road Runner. 


By 1970, the company was in a rapid decline.  Its market share dropped from 25 percent to 11 percent with major storm clouds on the horizon.  In 1978, Lee Iacocca was brought in to lead the company.  Iacocca was an educated engineer that voluntarily started his career in sales and eventually earned his way to HQ with Ford.  During his time there, he led teams who created groundbreaking automobiles - the Lincoln Continental, Mark III, and one of the most legendary cars in history - the Mustang.  

After working for the company for thirty years and serving in the post as President and Chairman, Iacocca left the company with record profits during his last 2 years.  In 1978, Iacocca had a direction for the company to pursue the small car market.  This strategy was not supported by Henry Ford II, who wanted to pursue larger luxury vehicles.  Due to personality conflicts and the struggles with strategy alignment, Iacocca was fired.


Iacocca was just 51 at the time so when the Chrysler board presented him the opportunity he leaped at the challenge.  The current Chairman of the Board, John Ricardo, was not up to the task and recognized strong leadership was needed to execute the turnaround.  In exchange, Riccardo expressed a willingness to step aside in two years time allowing Iacocca to assume both Chairman and CEO.  John Riccardo was willing to sacrifice himself for the good of the company.  


When taking the role, Iacocca had to accept half the pay he was getting at Ford and sacrifice his family time.  In order to right things, he would have to work almost around the clock.  Chrysler had poor financial systems and controls in place, both manufacturing and supply chains were a mess, product quality was poor, and there were on-going turf wars among each of the divisions.  Company and customer loyalty were also the worst among the Big 3 automakers as the firm continued to lose money.  

The Law of Sacrifice says you have to give up to go up.


Iacocca understood that successful leaders have to maintain an attitude of sacrifice in order to turn around an organization.  The have to be willing to do what it takes to go to the next level.  Iacocca fired thirty-three of the thirty-five Vice Presidents during a three-year period.

The US was experiencing a major recession with very high interest rates and oil prices at record levels, and Chrysler continued to lose market share.  Despite all of Iacocca’s work, it seemed as if the Law of Sacrifice wasn’t working.

Iacocca worked harder to rebuild the company by bringing in the very best leaders in the business, many of whom had retired at Ford.  He cut every expense he could and built on the company’s strengths, however, these measures were not enough to lift the company.  Chrysler was headed for bankruptcy and he would have to face his greatest sacrifice of all: He would go to the American government and ask for a loan.  

Congress shamed Iacocca as a living example of everything that was wrong with American industry.    Just the same, it was much better for him to swallow his pride then to close the doors and walk away.  

Iacocca also reduced his salary to one dollar a year while stating “Leadership means setting an example.  When you find yourself in a position of leadership, people follow your every move.”  He followed that action with requests for others to make sacrifices.  He asked for - and received concessions from unions and banks.  For Chrysler to succeed, they would all make sacrifices together.  And succeed they did.  By 1982, Chrysler generated an operation profit of $925 million, the best in the industry.  In 1983, the company was able to repay its Loan.  Chrysler’s success continued as it climbed to 16% market share of US and CAN markets (2 x what it was when Iacocca took the helm).  Iacocca ultimately retired, however, his tenure put the company back on the map because he modeled the Law of Sacrifice.             


Many people today want to climb up the corporate ladder because they believe that freedom and power are the prizes at the top.  They don’t realize that the true nature of leadership is really sacrifice.  


There is always a cost involved in moving forward.  Sacrifice is an on-going process, not a one-time payment.  Anytime you know that the step is right, don’t hesitate to make a sacrifice.  


“When you become a leader, you lose the right to think about yourself.” - Gerald Brooks

The cost of leadership - as you rise in leadership, responsibilities increase and rights decrease.  

If leaders have to give up to go up, then they have to give up even more to stay up.  


“For everything you have missed, you have gained something else; and for everything you gain, you lose something.” - Ralph Waldo Emerson

The Law of Sacrifice demands that the greater the leader, the more the leader must give up.  

EXAMPLE    Martin Luther King

In his last speech, delivered the night before his assassination in Memphis, he said, “I don’t know what will happen to me now.  We’ve go some difficult days ahead.  But it doesn’t matter to me know.  Because I’ve been to the mountaintop.  I don’t mind.  Like anybody else, I would like to live a long life.  Longevity has its place.  But I’m not concerned about that now.  I just want to do God’s will.  And He’s allowed me to go up to the mountain.  And I’ve looked over and I’ve seen the Promised Land.  I may not get there with you, but I want you to know, that we, as a people, will get to the Promised Land.  So I’m happy tonight…I’m not fearing any man.”  “Mine eyes have seen the glory of the coming of the Lord.”

The higher level of leadership people want to reach, the greater the sacrifices they will have to make.  To go up, you have to give up.  That is the true nature of leadership.  That is the Law of Sacrifice.  

Here is a link to obtain this wonderful read. https://www.amazon.com/21-Irrefutable-Laws-Leadership-Anniversary/dp/0785288376

I hope this book provides you with guidance along your journey.