Leverage is one of the most annoying modern buzzwords there is. It’s been verbified (“We need to leverage our strengths here”), and had its definition stretched to the point where it’s just a fancy-sounding way of saying “used” (“We leveraged software to make the sales department more productive”).
So when I talk about leverage in this article, don’t leverage your attentional capacity and tune me out: I’m talking about actual leverage, which is the most important concept to understand if you want outsized results from life.
What is leverage?
Long before suffering its recent misuse and abuse, the word “leverage” derived from the use of a lever, defined as “a bar, moving over a fixed point, that when pressed down at one end can move or lift something at the other end”.
A lever, as Archimedes knew and so will you if you’ve taken even a single physics class, allows you to apply greater force to objects than you ever could without it. Think of the most important type of lever in the world – a bottle opener. You can yank at the lid all day and get nowhere, but apply the same force at one end of a lever and it’ll pop right off.
In other words, it magnifies the force you exert in one place, and transmits it to another.
We can think of leverage in the same way in our personal and work lives: it magnifies an effort you make now, by transmitting it through time to produce even greater output in the future.
Low-leverage activities, then, are those that affect only there here-and-now and the specific case in question. For example, take writing a reply to a customer updating them on the status of their order. This isn’t unimportant (you might lose a customer if you didn’t do it), but it lacks in leverage because once it’s done you’re no further ahead with anything else in the future.
High-leverage activities allow something you do now to affect the future. Building on our example, writing a template to deal with all future customer enquiries would be high leverage: it takes time now, but cuts down the amount of time needed for similar tasks in the future.
Leverage matters because everyone has the same amount of time, and roughly the same amount of energy. While it’s possible to perform tasks faster or more efficiently, it’s not going to make a significant difference: you can always work harder, but it’s not like a billionaire works a thousand times harder than you do.
The real difference comes not from working harder or faster, but changing what you do: switching from low-leverage to high-leverage activities.
Types of personal leverage
There are different types of “lever” you can use to magnify the effect of your present effort on the future.
Any task that can be performed by technology instead of your own effort inherently gives you leverage.
Do you spend an hour each week chasing up overdue invoices? If instead you spent three hours setting up a piece of software that automatically sends reminders out for you, those three hours have extremely high leverage as you’ll save time way into the future.
Technology is the ultimate form of leverage because once in place, it can scale infinitely with little marginal cost increase – dwarfing the amount of effort expended in creating it in the first place.
The components of hiring itself (writing a job advert, reviewing applications, interviewing) are low-leverage because each of them will need to be done again multiple times in the future. But the final act of making a hire is extremely high-leverage (and actually, so is the deep thinking about your business required to do the procedural parts of hiring well).
Consider an accountancy practice. Most are started by a single accountant who does every part of the job herself. As demand grows, she makes her first hire so her company can now bill twice as much without her expending any extra effort. Eventually, the company has offices all over the world and is billing millions of pounds per year.
Could she have just worked a million times harder and done it all herself? Clearly not: hiring (plus technology) was the only way.
Introducing a system or process (for yourself or others to follow) produces leverage because it involves making some effort now in exchange for reducing effort every time that process is followed in future.
I benefited from setting up a system when it came to sending VAT information to my accountant each quarter – which was just enough time for me to have completely forgotten how I did it last time. It would regularly take me over an hour.
Finally, I wrote up a simple procedure I could follow in future – and now it takes less than 15 minutes. For extra leverage, I could now give that procedure to someone else to follow so it took me no time at all.
If you have employees or a team reporting to you, any time you spend training those people is a high-leverage activity because in exchange for (say) an hour of your time, you improve the quality of hundreds of hours of future work.
Wait what? Meetings, useful? Yes – because meetings (good meetings, anyway) give you a chance to learn information that allows you to make better decisions, and pass on your own knowledge which (like training) positively affects many hours of future effort.
The higher the number of participants in the meeting, the higher the leverage because you’re affecting more future work – but paradoxically, the lower the chance that the meeting will be productive.
Most people (me included) have an inherent bias towards doing. If ever there’s a problem, the answer is always doing – and if the problem continues, clearly you need to do even more.
That “doing” will be low-leverage. You’d get far more leverage by stepping back and doing some high-quality thinking instead. If you emerge after an hour with nothing more done but an idea for how you can apply another form of leverage to the situation, the return you get on that hour of time will be immeasurably higher than if you’d applied that same time directly to the problem itself.
How to get more leverage in your life
- Become aware of what you actually spend your time doing. For a week, set a timer to go off every hour – during waking hours, obviously. When the timer goes off, make a quick note of all the tasks you’ve performed in the last hour.
I strongly recommend doing this hourly rather than doing it in a batch each evening, because otherwise you’ll forget the small, seemingly insignificant tasks that take up a surprisingly high proportion of your time – and which are prime candidates for adding leverage.
- Categorise your tasks into high- and low-leverage. Take everything you’ve jotted down over the week, and move them into two columns – one for high, one for low.
- Order each column with the tasks that have taken up the most time at the top. So if you spend three hours per day calling customers who are late paying, that’s likely to be near the top of your list. Paying an electricity bill once is likely to be near the bottom.
- Pick one task from near the top of the low-leverage list, and brainstorm ways to add leverage to it. So for calling late-paying customers, it could be
Automate: Implement a piece of software that sends automatic email reminders every week for bills that are overdue.
Delegate: Write up the process of what you do, and pass it to someone else – just checking in with them occasionally to monitor their success.
Eliminate: Explore ways of getting paid in advance, so chasing overdue payments becomes unnecessary.
- Wait until that’s done, then move on to the next in the list. Don’t try to take on more than one or two tasks at once: adding leverage actually takes more time at the start than just performing the task on its own, so you’ll quickly overwhelm yourself if you do too much at once.
- Make a note to repeat the exercise again next year. What will you do with all the time you’ve freed up from low-leverage activities? You’ll fill it up…with a mix of high- and low-leverage activities again. So this isn’t a one-shot deal: audit your time regularly to keep your leverage high.