Let who lead the way?
With this rule, Masello tackles the perennial question of plot vs. character. He points out how difficult it can be to come up with an original plot and reminds us that there are supposedly only a limited number of plots out there. But instead of focusing on the plot, he suggests that a writer might focus on the characters instead. Figure out what it is your characters want, and work out how that will lead to an inherent conflict -- which will, in turn, lead to your plot.
I think it was Henry James who said, "What is character but the determination of incident? What is incident but the illustration of character?" Now, I'm not particularly fond of the writings of Henry James, but he does have a point here. Plot and character aren't as separate as we'd sometimes like them to be. What kind of plot you are going to write strongly depends on the characters you're choosing to write about.
Not always, though. Occasionally, you can just shove a character into a plot. For example, in Ernest Lehman's movie North by Northwest (1959), an advertising executive named Roger O. Thornhill find himself mistaken for a spy and chased across the United States. At first glance, this appears to be a case of a character awkwardly inserted into a spy thriller. On the other hand, a story like this works because the point of the exercise is to show a character dealing with a situation outside of his normal experience.
Next on the spectrum is a work like the J.M. Barrie play The Admirable Crichton (1902). The play is about how a proper English butler, Crichton, becomes the master when he and the family he serves are stranded on a deserted island after a shipwreck. An English butler is not a character who would necessarily find himself on a deserted island, but again, the point of the story was to show the reversal of roles that might occur.
Finally, we arrive at stories that fit Masello's advice about letting the plot grow out of the character. In some ways, these are the most realistic of stories and can be just as gripping. Instead of sending Thornhill on a wild goose chase, what if we sent him to deal with a difficult client and he knows his job is riding on this meeting? Or what if Crichton's conservative views on society were challenged not by an island experience but by seeing his master mistreat a new servant? If you find yourself fascinated by a character, you might try seeing how that character's normal, everyday life can lead into a plot, rather than trying to create outlandish circumstances for that character to face.