Creating Long Levers
“Give me a place to stand, and a lever long enough, and I will move the world. ”
- Archimedes
Leverage is one of the most powerful forces on earth. It allows the impact of 1 person to be multiplied 100s, 1000s, and even millions of times over. Yet, most do not understand the true power of what leverage can help you achieve. Once you get a taste of working with leverage it is hard to go back to working without leverage.
So let’s begin. What is leverage?
At its core leverage is a force multiplier. Leverage can turn 1 pound of force into 100 pounds of force.
The 3 forms of leverage we will discuss are workforce leverage (employees), monetary leverage (capital), and media leverage (distribution). Each of the three forms of leverage is unique and powerful in its own way.
Workforce leverage. Workforce leverage is the leverage that is created by building a team or employing the work of others. Your team can consist of both humans and computers. Workforce leverage allows you to augment your time. Rather than being able to do only 12 hours worth of work per day on your own, with workforce leverage 10s of thousands of hours worth of work can be done every day towards your enterprise. For example, currently, Amazon has 1,540,000 employees. Let’s say that each employee works 6 hours per day on Amazon. That is 9.2 million hours per day spent working on Amazon. Each day Amazon employees complete the work that would take one person over 1,000 years to complete. Internalize that. That is leverage. This function does not take into account the hundreds of millions of computer hours spent working for Amazon every day.
Monetary leverage. Monetary leverage is the leverage that is created by having capital. Whether the money is from investors, a bank, or a salary. Monetary leverage is the most transmutable. You can transform monetary leverage into either workforce or media leverage. Monetary leverage can be used to acquire companies, hire employees, invest in tools, or generally utilize capital to create positive returns. Cash is oxygen. This is a form of leverage that is always in demand.
Media leverage. Media leverage is access to eyeballs. Influencers can get paid $1 million for a single Instagram post because they have leverage. Jake Paul was able to build Prime Energy from $0 to $ 250 million in sales in 1 year because of his media leverage. Media leverage comes in various forms, but it all comes down to quality access to eyeballs.
So, now on to the meat and potatoes. How can you build and employ the use of levers? Let’s focus on workforce leverage as that is the most immediate form of leverage. Here is the general framework we can use to identify areas that should be leveraged.
Identify where you are allocating your time.
Is this a task that only you are able to complete (ie. can you replace yourself)?
If you had to pay the market rate to accomplish that task would it be a profitable activity?
If you answered yes to both questions then it would make sense for you to continue doing the task (this is rare).
If you answered no to question 2 and yes to question 3 then that is an area that should be leveraged through either humans or computers.
If you answered no to both then it would make sense to stop allocating your time towards it or outsource it to computers.
So, you’ve identified the areas where you can profitably employ workforce leverage. Now what?
There are a few roads to choose from onshore talent, offshore talent, and computers. Onshore talent is the most expensive and computers are the least. Each comes with its pros and cons. Depending on the goals computers tend to be the cheapest and most scalable.
Once you identify the value of the task and have an idea of the type of workforce leverage you will employ the next step is to create a process for the task. Create an easily understandable manual that fully explains each step of the process, the dos, don’ts, and the process for when they run into roadblocks. Essentially you want to condense all of your experience into a document someone can pick up and get right to work with. This is an art form.
Lastly, create a way to keep track of performance. Whether that is monetary, hourly, or impact. Find a way to measure the value this form of leverage is creating.
And there you have it. You now have a long lever.