The Two Types Of Leverage Every Professional Needs To Understand

There are two types of leverage every professional needs to understand if they want to work smarter and not harder: operational leverage and organizational leverage. Let’s take a quick look at leverage itself and then each type.

When we think of leverage we want to think of a lever we might use to move something heavy. With some design and engineering, leverage can happen whenever we figure out how we do more with less.

Operational leverage includes money and time. To find points of operational leverage we have to ask where and how our money or time is best spent? Should something be done ourselves or delegated?

Operational leverage is finding ways to work smarter and not harder on a specific job or task.

Think of the hourly rate you earn and then think of the hourly rate it would cost to hire or delegate someone else to do a job or task.* Why does the dentist hire someone to mow her lawn? Because she can make $100 an hour at the office and pay someone $20 an hour to cut the grass.

Organizational leverage also includes time and money, but really focuses on people and purpose. We want to build partnerships, cultures, and communities so that when we combine forces, 1 + 1 > 2. We want to work with people who have shared values and complementary skills.

Organizational leverage is finding ways to work smarter and not harder by choosing the right people and partners.

Think of our dentist again. Let’s assume she really wants to maintain a beautiful lawn. Is she just going to hire based on the lowest price? No way. She knows what she wants. She’s going to hire the best lawn service that shares her values and does as good a job with her blades of grass as she does with her client’s bicuspids.

Here are some key questions to prime the pump for greater efficiency in our professional lives. Think about how to apply operational and organizational leverage to each:

What can I do to drive progress that nobody else can? How can I do more of it?

What’s something I’m doing that someone else I could hire/someone else in my organization could do as well or better?

As our business scales, who needs to be involved and how? What does the most successful version of this team operate like 1, 3, and 5 years down the road?

Find the points of leverage in your professional life and you can move the world. Think in terms of jobs and tasks. Think in terms of people and partners. Think operationally and think organizationally.

Somebody has got to do it (and that somebody is you).

*one easy way to do this is to think about how much you made last year divided by 2,000 (the approximate number of work hours in a year).