The true meaning of leverage

Whatever it is you’re trying to accomplish in your life or in business is more easily realized through the power of leverage. In elementary school there have always been people who complained about having to learn certain mathematical concepts like algebra or high-level geometry, and they questioned why it’s worthwhile for them, and why would learning something so analytical and abstract would matter later in their lives. This is where leverage will come into play: -- it’s the acquired ability to learn a higher concept that trains the brain to think differently, and to cultivate the discipline to tackle a subject.

Leverage is all about using tools and methods to acquire something tangible. Knowledge that has been procured at a young age will most likely last throughout someone’s life. And so the thing you learned at a young age, to play the piano or to speak a foreign language, will allow you to gain greater insight into arts and culture that you would have not gotten without the specialized skill.

In business the art of leverage is everything. Employers leverage their employees. They allow for critical tasks to get done. If you are looking for a job or a place to live, leverage would come into play when you had two or three others help you in the search. More ground is covered. It was American industrialist J. Paul Getty who famously quipped he would much rather have 1% of 100 people’s efforts than 100% of his own. He innately understood leverage. That’s one of the ways he became the richest man in the world in his day and age.

Work smarter rather than harder, the saying goes. Leverage allows you to accomplish amazing things. You can be super industrious with leverage on your side. At my job at the university press we employ student interns to do several mundane tasks. This allows the primary stakeholders to accomplish more of their work, and provides students with work experience and solid understanding of how books are published. The university press takes it one step further by taking time out to explain to interns various nuances of book publishing. We answer their questions. We get to know them as people so we can more effectively work with them. Interns need to be supervised closely, and it is through a process of advanced learning and acquired knowledge that leverage comes into play and makes our department the most efficient. How do we publish so many more titles with only 4.5 staff members? It is good old-fashioned leverage, baby. Qualified students provide the oil for the book publishing machine.

The previous university press I worked at did not employ student interns while I was there and leverage did not exist. This made for a dysfunctional atmosphere in the office. The university administration was in flux as well, and while the new president of the university made lots of flowery speeches about student development and how every department needed to contribute to that, it simply did not happen. They did not practice what they preached. This had a direct effect on my job. I had a good relationship with the art director, and he was able to produce graphics for marketing that were part and parcel to my job. But when push came to a shove and he ran out of time, he made it clear that I was imposing on him. An intern with knowledge of graphics would have solved it. I am great when it comes to producing content for books, I can write and coordinate processes all day long. But I shouldn’t have to do graphic arts or fill out excel sheets for order forms or look up email addresses for primary contacts. An intern can perform these tasks and learn something into the bargain. This form of leverage would have allowed me to concentrate on the things I did best and not got bogged down in minutiae. That university press under performed as a result. Last thing I heard is the administration had that department on the chopping block. A real shame because the books they did were good ones.

The magic of leverage comes into play once you set up the proper channels where everyone can benefit. The business behind Shop.com is the perfect example of the best use of leverage. Because everyone has the same setup and tools and there are 14 different markets that a Shop.com owner can sell into, it is the applied expertise of different team members makes all the difference for everybody. One team member might be an expert on technology and marketing web-based solutions for businesses, and another team member might be proficient in health and nutrition and developing weight loss programs for clients, it doesn’t matter what market the team member is expert in or wants to dabble in, the sales volume is shared 100% from the bottom up—no levels—and everyone benefits from the sales volume generated. Shop.com has a sophisticated tracking system, a state of the art computer program that systematically finds the sales volume within the organization and calculates that sales volume automatically every single week. The system kicks out a check to the owners when sales volume reaches a certain stage. The brilliant thing is that each business is capped at a certain echelon. An owner’s business development center flushes out at that point and starts to accrue again. Each owner develops two lines of distribution—two teams—and only earns significant income when people on their teams produce sales volume, or make money themselves. Shop.com allows owners to help each other by placing volume at the very bottom of an organization, and every active owner gets 100% credit and the ability to earn on multiple streams of volume. This form of leverage expands distribution and everybody wins, the company sells their products, the customer gets a superior product at the best possible price or cost per use, and the owner gets paid weekly for the sales volume generated. Bam boom!

The business of Shop.com was created with leverage in mind. Word of mouth is the most powerful form of advertising. Recommendations from trusted friends is what moves people to buy a product. It doesn’t matter what that product is. When was the last time you recommended a good movie or a good restaurant? People listened to you and they went and checked it out. They spent their money on it. People hate to be sold but they love to buy. As a Shop.com owner, with so much leverage moving through your business you are empowered to solve people’s problems. You help solve a problem for people and then you will have a customer for life. And because of the power of leverage and the fact that you are receiving credit from everyone on your team, and the tracking system is working 24/7 in the background, you only need a small group of customers to service. You do not have to go out and recruit the world. You can concentrate on a select group of loyal preferred customers and give them outstanding service. Leverage takes care of the rest and you end up with an ongoing income that never stops. Set it up correctly one time, teach and mentor others on your team to be optimal customer managers, and the power of leverage will pay you for the rest of your life.

Diversity is the key here. A new person can bring creativity and practical skills to an organization and transform it. In government the effect of leverage is that each branch of government is doing its job and a system of checks and balances is in place. Alternative voices are heard and everything works in a synergistic way together to for freedom and democracy to thrive. When one party takes over all branches of the federal government, as is the case now with President Donald Trump and Congress, then diversity is squelched and an agenda is put forth that damages leverage. This was the case in the first two years of Barack Obama’s presidency. The Democratic Party controlled all branches of the federal government yet nothing got done. They lost their super majority in 2010. Now that the Republican Party is in power in 2017 the same thing is happening. The power of leverage is diminished and the diversity of voices becomes drowned out. And the fact that President Trump has zero experience as a politician in any office whatsoever, and with an authoritarian management style that is only conducive to the boardroom and not public service, any aspect of leverage becomes mute and the government itself begins to stagnate.  The government is so big and so unwieldy it needs the power of leverage to make it work best.

A case in point is the current State Department, where it was reported by AP and other news sources that the top brass at the institution abruptly resigned the other day. It’s not clear whether there was a house cleaning at State by Trump operatives, or if they left because of the transition. Remember, these were career diplomats who had been around for years and knew the inner workings of the department.  So for purposes of illustration, it doesn’t matter if those diplomats were pushed or they jumped, the fact remains that there is currently no Secretary of State, and the nominee Rex Tillerson of Exxon is in the same boat as Trump, he has no experience for the job. If he gets confirmed by the Senate, which appears likely, his lack of leverage at State with so many departures is going to mean a long and potentially dangerous learning curve. Learning on the job is well and good, but when you have no leverage it’s a prescription for disaster.

A good thing is that there will be an election in two years and it’s important for the opposing party in 2018 (the Democratic Party) to unseat the super majority and allow leverage and the diversity of voices to be restored. Meanwhile, we are in for a rough ride in the political sphere over the next two years.  We all have to be vigilant and work to create leverage in our lives and really pay attention to what is going on in our communities and the outside world.

I myself will talk to anyone who will listen to me about the issues of leverage and how people can create their own economies and act on what is important to them and their goals, dreams, and values. It’s always about the other person and how you can help them achieve what they want. As Jim Rohn once said, it’s not the blowing of the wind but it’s the setting of the sail. It’s how you set your sail that determines where you will go in life. And that takes vision and energy. If you can find the right people who understand the concept of leverage and how powerful and transformative it can be, then you can take control of your life and help change the world to be a better place.