Leverage

To achieve big things you MUST EMPLOY LEVERAGE in your life. Here's how.


Give me a place to stand, and a lever long enough; and I'll move the world.


Archimedes


Linear Thinking


When we think about productivity of any sort - be it our productivity at work; our ability to get fitter and stronger; the productivity of our saving account; the productivity of our network - casting our net far and wide, to include any type of "output" from more or less anything we do - we tend to fall into the very human trap of thinking linearly.


This means that we tend to think of a linear connection between input and output. The most obvious example of this is work. Take an interior designer, who maybe charges $100 an hour. If she spends 5 hours on a given day on some project, she would earn $500. If she did that 4 days that week, she would have worked 20 hours, earning $2000. Not bad, as far as it goes. But what if she wanted to earn $20,000 that week? This would be impossible - at $100 an hour, she would need to work for 200 hours, and there are only 168 hours in a week. Our interior designer needs to stop thinking linearly, and start thinking in terms of leverage.


Deploy Leverage


Leverage: The mechanical advantage or power gained by using a lever.


What our interior designer needs is leverage. She needs a way to turn her 50-hour working week into a 200-hour working week; without working another 150 hours.


Before we look for the answer, let's fully understand the question. She needs to find a way to use her 50 available working hours, to generate MORE THAN 50 hours' worth of output. In the linear model - ie $100 per hour - this is not possible. So she needs to find some way to generate more than this from the available resource, in this case, time. Put another way, she needs to find a way to make each hour have more impact. Currently, she has a machine called "linear work" - you put in one hour, and $100 comes out. You only have 50 hours, and so the most that the machine can make is $5000. You need to bolt something on to this machine, which will affect its inner workings; such that now, you put in one hour, and $200 come out. Or $500. Or $1000. This bolt-on; this magic widget; is called leverage.


Faced with this linear reality, our interior designer starts to think outside the box. She knows she can't work more hours; so she starts to consider other ways to generate revenue without additional work. She rings up the suppliers she regularly uses in executing interior decoration for her clients, and negotiates a 15% intermediary commission on all goods sold. She starts a website, where she posts photos and articles of and about her recent jobs, packaged as interior design advice and ideas. Advertising on her website generates additional revenue. In time, as her readership grows, she allows her suppliers to post items onto a curated sales page, generating sales commission without ever selling a thing herself.


By being creative about adding revenue streams to her existing 50 hour working week, our designer now is earning on average $300 an hour in total. She still has a 50 hour working week; but now, she is levering her time much more effectively. In Archimedes' example, if her working hour is the lever, she has found ways of making it longer; and it now moves much bigger things. Now she is earning three times as much, is she three times smarter? Is she three times harder working? Are her designs three times better? No. That would be linear. She is three times more levered.


The Leverage Question


Leverage, then, is some way to take your existing input, and allowing it to have a much greater than linear impact. Whilst it isn't always obvious how to do this, the challenge isn't in finding leverage; it is in looking for leverage. Like so many things in life, we suffer not from failing to find the answer; but from failing to find the question.


Leverage is a habit and a way of life. Most people are conditioned to live linearly, and will never know the potential that is right there at their fingertips. The big achievement is to start thinking in terms of leverage. For everything we do, start asking: is this the most levered way to do this? If not, what is?


And, like most things in life, once we get the question right, the answers are easy to find. We can look at how others do things in a levered way; we can solve back, from what would a levered outcome look like (in our interior designer's case it was $20,000 a week). We can simply keep looking for things that add leverage (above it was the website, the intermediary commission, the website merchandising).


There is no limit to how many ways we can add leverage to all that we do; the only constraint is our imagination. To get the creative juices flowing, here are some generic examples:


  • Habit - Taking something you want to do, and forming a habit around it, is a way of creating great leverage in your life. For example, if you want to learn a musical instrument, you might create the habit of practising 5 minutes a day every morning before work. This may not seem like much, but the cumulative impact of doing this every single day will be large. After one year, you will find you have achieved a high skill level, with next to no effort. Why? because the daily cost was minimal - 5 minutes - and the fact that it was a habit means that you never need to think about it, use any discipline or willpower (like you might for say one 3 hour practice session a week). Thus, you employed leverage - a high output for very little input.


  • Delegating - You may find that certain, menial things get done faster and better if you do them yourself; but if you find people who will do an adequate job in your place, let them do it. You will go from something requiring one hour of your time done 100% well, to the same thing requiring 0 hours of your time being done 80% well (ie well enough). Think of the valuable, creative work you can do in that time. Huge leverage.