Your professional success is proportional to the leverage you have. How much of that do you have? But what is leverage? The dictionary provides the following definition —
Leverage (n): “influence or power used to achieve a desired result.”Merriam-Webster dictionary
So, to succeed in a given field, you need to find as much influence (or power) as you can. In other words, leverage is that specific knowledge that you have that the world would love to reap its value from in exchange for some form of compensation.
I’m a great fan of Naval Ravikant’s insights. He discusses three broad types of leverage: (1) labor-based, (2) money-based, and (3) products-based, specifically the products, with no marginal cost of replication. (Source: The Almanack of Naval Ravikant)
First, labor as leverage
For example, you’re a people manager or a leader with consulting services personnel under you. Now, you have an advantage of how to deploy human resources for a gain.
However adept you’re at this, there are several risks. Firstly, humans, their emotions, interactions, and actions change over time. Hence, it’s not that easy to satisfy your resource pool all the time. Also, the level of your influence declines by resource pool configuration — from a factory-type setting to a creative one (knowledge workers). Secondly, even for a factory setting, there are risks related to strikes and revolts.
No doubt that labor is a leverage. It’s an art if you can master it. But, it’s the lowest form of leverage. If someone is following you because you are their boss (or their boss’s boss), your success has its limits. Ideally, you want to tap into intrinsic motivations and inspire, rather than top-down mandates.
Second, money as leverage
For example, investment managers or General Managers of the business (units) who have P&L responsibilities.
This one has its complexities, but at a higher order than the labor option. If you master how to allocate capital for greater returns, you’re in the mix with some of the greats. In the enterprise setting, you still need to influence people to make your capital work effectively.
Key’s here: (a) having a solid capital allocation strategy that’s agile for you to pivot, but also (b) having the discipline and perseverance to let the strategy play out. The latter is the more difficult in trying times. But that’s the expertise you’re bringing to the table.
Third, No Marginal Cost Products
Most important of these options, per Ravikant, is producing products with no marginal cost of replication. If you can produce something where it takes one time effort to build it. Then, replicate it as many times as needed at little or no cost — that’s golden.
Think about what product or service society wants but does not yet know how to get it. You want to become the person who delivers it at scale.Naval Ravikant (Book: The Almanack of Naval Ravikant)
What kind of products?
- Coding is a great asset, including data and analytics. Can you build something that solves a need for you? Perhaps others with the same need can purchase it from you.
- Can you write? A book, blog, thought leadership articles. Note that ‘specific knowledge’ is the key phrase for gaining leverage. Are you providing value to others and building your brand?
- Can you use Twitter effectively? Twitter is a great platform if you know how to use it for your niche/interests.
- What about Youtube videos? This is an underappreciated platform as a learning resource vs. an entertainment one.