"Give me a long enough lever, and a place to stand, and I'll move the earth." - Archimedes
We live in a century where the quality of our decisions is increasingly important since each decision has “leverage”.
The leverage concept is a fundamental mental model that helps us create disproportionate advantages. Being able to create more results, with less effort.
The essence of this concept is to find the angle which will make everything easier by lifting it in a specific way.
The term leverage comes from the Proto-Indo-European “legwh” which describes something light, agile, or easy. It also comes from the Latin word ‘levare’ which means “not heavy”. But the word absorbed in 14th century English from Old French, where ‘levier’ which referred to lifting something.
In life we have a lot of problems, but have to find ways to solve it in a clever way.
When facing a hard problem ask yourself where the leverage lies. Because that point can make a big difference.
Leverage points provide ideas to build new solutions. Identifying the leverage points helps us to:
- Develop a greater awareness of those things that can cause difficulties before there are obvious signs of trouble
- Find out what is causing difficulties
- Use our resources effectively.
- Create new courses of action
If we find leverage we can take small, well-focused actions that can produce significant and lasting improvements.
“It is easier to conquer than to manage. With enough influence, one finger could turn the world over. ” — Jean-Jacques Rousseau
By observing problems and looking for ways to “leverage” in different situations, we can completely change the rules of the game.
The most important resource that we have to create leverage is time. So how we spend our time will depend on the leverage we could create.
We can leverage our time to invest it creating:
- Skills (specific knowledge leverage)
- Creating business relationships (partnership leverage)
- Reputation (brand leverage)
- Raising capital (capital leverage)
- Hiring employees (labor leverage)
- Reading (knowledge leverage)
If you spend your time creating yourself. The combination of leverages will make you an asset.
Leverage grows responsibly and taking risks. We create leverage by chasing asymmetric opportunities (where the advantage is unlimited and the disadvantage is almost negligible).
When you start a business, you are creating a replica of yourself. The result is to create an asset, which can create unlimited leverage.
The job of the entrepreneurs is to design vehicles that create leverage. They build machines that turn labor, capital, and products that creates financial and time leverage.
Software and media create leverage because it creates robots that work for you while you sleep.
We can find leverage in negotiations by being:
- Able to walk away, because having options is leverage
- Becoming irreplaceable
- Knowing the numbers
If we are not looking at where to create leverage, we are losing time and missing opportunities that could help us turn upside down the problems.