How to Apply Leverage to Create Outsized Results
Exploring The Missing Half of Archimedes' Story
Yesterday I realised I've largely missed something critically important about one of the most powerful concepts in the universe: leverage. The story of Archimedes has a missing, more nuanced half. Let's go find it.
Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.
Everybody knows the tale of Archimedes' lever, and understands the key takeaway: if you have a long enough lever, your input and effort can be multiplied to generate disproportionately large outputs and results.
Nothing new there. However, here is the crucial part of the story that I've largely overlooked: where you apply the lever is almost as important as how long the lever is.
Think about that for a moment. If Archimedes were to move the world, he would certainly need a long lever, but he would also need to apply it to the right leverage point, specifically at the very bottom of the Earth. If he places it anywhere else his efforts will be in vain, regardless of how long his lever might be.
Furthermore, if Archimedes wanted to move the Earth in a specific direction, he would need an even more fine-tuned approach. A long lever applied at almost the right place will create results that are very different from what he intended. Such a slightly misapplied lever may even do more harm than good, because it can lead you very far and fast in the wrong direction (as everyone who has been financially leveraged and had the market turn on them can attest to).
This is worth keeping in mind as we think of leverage in our own lives and businesses. After all, just creating some random effect or result is rarely what we want – what we're after is effects and results that move us in a specific, desired direction.
Let's move on to a separate point. In addition to where we apply our levers, we must also remember to actually use them. This might seem utterly obvious, but believe me when I say that some people, and some organisations, are much more skilled at creating leverage for themselves than they are at using the leverage they have.
I know this is true, because I myself am one of those people.
Looking backwards, I can see how I've been very focused on extending levers in my life, but much less focused on applying them to meaningful leverage points.
One example could be over-investing in learning new skills (extending a lever), but under-investing in actively applying those skills to opportunities (leverage points) for profit or other benefits.
Another could be saving up capital over time (extending a lever), but not deploying enough of it when promising investment opportunities (leverage points) came along. (This is also true for social capital, by the way).
Yet another could be investing time in writing this newsletter, but not bothering to promote it in relevant channels and forums.
A final example, from the professional realm this time, could be hiring fantastic employees, but failing to channel their energy and effort into what matters most for the business (as I alluded to in my post from a few weeks ago).
All of these examples point to a tendency to invest precious resources in developing options and potential, but then stopping short of actually calling on those options to turn the pent-up potential into desirable results.
This is clearly not a productive tendency for any person or organisation who aspires to create great results. The opposite would obviously be problematic too – if you constantly identify leverage points and opportunities, but never have any available levers or resources at your disposal, you won't get anywhere either. You need both at the same time.
The bottom line is this: don't miss out on the nuanced half of Archimedes' story. Don't go about blindly looking for long levers and fulcrums – make sure you also apply your levers to the right leverage points, with precision and intention. Then push as hard as you can on your levers, and you might just move the world in the direction you want.
Good Strategy, Bad Strategy, by Richard Rumelt (next week's post will be about this book!)
Points to Intervene in a System (Danella Meadows) (I haven't read this yet!)