The Quest for Leverage Should Characterize Every Business

Leverage can be simply defined as realizing a greater resultant power than the power necessarily invested to gain it. The only limit to the outcome gain is the size of the lever used in effort to gain it.  As Archimedes said, “Find a lever long enough, and I can move the world.” 

This concept is really not too difficult to comprehend.  It is simply a part of the quest for leverage which should characterize every business. 

Companies Need Highly-Skilled People to Accomplish More

Without revisiting the company’s need to achieve ever-increasing margins as a key to survival in today’s business world, we start from the presupposition that companies need to gain greater outcomes from the limited recognized resources that are available to them.  By recognized resources, I simply refer to the obvious, long-accepted ones that have been necessarily commoditized through time, understanding and use. 

These are energy, as in petroleum, or electricity, land and machinery; and, people, as tools.  Each of these is becoming scarcer and more expensive.  As a result, the only way to realize greater value is to increase the output gained with the utilization of each of these and that, by my definition, will come from gaining increasing leverage from them.  That said, business will need to discover how to realize greater outcomes from a declining number of available skilled people who, based only on their increasing scarcity, are becoming more expensive to acquire. 

In the simplest of models, companies will want to need less people to accomplish more and more.