If we want to get more results from our work, we can either work more, or we can leverage our work. Obviously, more results but not more work sounds very attractive, because it means more value from the same effort.

The essence of leverage is to perform a task once and then to pocket the benefits several times. This leads literally to an explosion of productivity.

This is episode 6 of the podcast Success and Inner Growth. We discuss here the methods behind the concept of leverage, and how we can make it work for us.

Why to Use Leverage?

The short answer is: Work smart, not hard.

If you disdain or ignore leverage, you limit the scope of your life severely. You would have to work much more than the rest of us and get only a fraction of the rewards, because your productivity would be so low. This would make you fair game for everybody else.

But there is one caveat: If you leverage mistakes, destroying instead of creating value, leverage multiplies the destruction. This means before leveraging comes careful testing.

Examples

Leveraging your work means to organize your work in a way that at least part the benefits of your effort materialize again and again, without the need to repeat the work completely. To speak with Boris Johnson: Leveraging allows you to eat the cake and have it.

Leverage by Automation

The fundamental principle behind automation means to spend resources on a tool, and then to use that tool again and again to get more and better results. This basic principle stands behind generic tools like a hammer, but it applies also to very complex set of tools like an assembly line or an IT system.

One example might be a situation where you need to assemble a set of furniture and in that process, you need to fix 50 screws.

You could grab a screwdriver and start to work until all screws are fixed. It takes the hole day and leaves you exhausted with a paining body. (Although you could tell yourself that you did some sports to improve your health)

Or you could get yourself a cordless screwdriver, fix the screws in a fraction of the time, then walk away with the time and energy to perform another task. Or you could just use the remaining time to enjoy life and visit a gym.

Leverage by Delegation

An even better way to handle the task of assembling the furniture would be to call a professional, who knows how to perform the task and has the appropriate tools already at his disposal.

He could assemble the furniture even faster, because he knows how to do it, where to start, where to end, which mistakes to avoid and where to take extra care.

He went already through the relevant learning curve. This allows him to perform the same task faster and with less effort. Finally, his risk of damaging the furniture is much lower.

By calling an expert you use the leverage available to him. You will get your result with ease, although you must pay for it.

Delegation is the most common way to benefit from leverage, because it brings other people’s skills, tools and their refined processes into everybody’s reach.

Leverage by Process

The secret of professionals is, that they follow a template, a proven sequence of steps to perform their special tasks.

This template can be used again and again. It is improving productivity like a tool but cannot be transferred as easily as a cordless screwdriver.

Some of these sequences are publicly available as best practice, sold in the form of books or taught as courses. Others are top secret, like the recipe for Coca Cola. And even others are published and protected as intellectual property.

But all of them, the best practices, the top-secret recipes and the protected intellectual property are the product of an extended learning process. They are built and refined step by step.

If you want to design a template solution for a common problem, you need to do quite a lot of work

You must

  • define the problem
  • look at the problem from all different angles to explore its variants
  • search for people who solved similar problems and look how they did it.
  • add your own improvements
  • put everything together into a repeatable process
  • test your process in different scenarios and for all variants of the problem
  • improve your process, eliminate shortcomings

This is a cumbersome and long way to go, demanding much time and effort. But the reward is huge.

Your Reward is a Process You Can Clone

A functioning process to solve a common problem better than the vast majority is a huge asset.

You can save many people confronted with that problem from agonising, researching, failing and trying again. They can delegate their problem to you.  And you trigger your process, follow your template from A to Z, and wow, the problem is solved.

You saved your client from a lengthy and costly learning curve. This allows you to charge him a price reflecting the much higher costs he would have faced, if he would have had to solve the problem without you.

This is something big: Your process allows you to get paid not for your effort, but for the much bigger effort your client can avoid.

Leveraging the Leverage

Having this wonderful template at your disposal, enabling you to perform a task better and more efficiently than everybody else and to charge for the value you create, not your effort is great. But it is not the end of the story of Leverage.

You charge now more than the cost of the effort. But you are still limited by the fact that you have only two hands and a day has only 24 hours.

Cloning Your Process

To overcome the limitation of 2 hands and 24 hours, it would be nice to copy your template, let others join you. You could share your process, teach your new colleagues how to perform every step and receive part of the extra value they create with your help. Nice?

But to get there, you need to develop more competencies.

You need to find ways to

  • find the right people
  • teach them your process
  • control their performance
  • find more people who want your services
  • collect payments from customers
  • pay your partners or employees

For all those tasks exist standard procedures, also called “Best Practices”.

After moulding those best practices into processes tailored to your specific needs, and finding the right people to perform them, you have now a business.

The secret behind a successful and growing business is a system of processes, organised in a way that they pile leverage on leverage on leverage.

Setting up the processes means that your limit is no longer your time and perseverance. You just busted your physical limitations. Instead the quality of your processes, your ability to monitor everything, to identify failings quickly, to initiate continuous improvements and anticipate upcoming changes determine your success.

From Leverage to Passive Income

Now, that you have reached at least in mind the level of a business owner, you reached the point, where the quality of your work is way more important than the quantity. Your new mantra should be: “Work smart, not hard.”

There may very well come a time, when you cannot do much work anymore.  Passive income must provide at that point for your needs. One way to approach the concept of passive income is the idea to pile up ever more layers of leverage, up to the point where your remaining work is to collect the income the system provides to you. But passive income can dress up in many more styles than income derived from business or financial assets: Just think about taxes and social transfers.

Passive income will be the topic of episode 7. It will be ready by the end of September. I look forward to seeing you again to share episode 7.

This is the manuscript for episode 6 of the Podcast Success and Inner Growth. Here is a link to the manuscripts of the other episodes.


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