Leverage

By using a lever, you can amplify the input force. Think of a see-saw.

Scenario 1: Mental models can be leveraged to apply to the complex problems at school or work.

Scenario 2: A strong personal brand adds more lift and leverage which helps during negotiations.

What is Leverage?

By using a lever, you can amplify the input force. Think of a teeter-totter or a see-saw. Push one side down and the other goes up. Make one side short and the other long, and you can lift heavy objects by applying force to the long side.

A lever amplifies an input force to provide a greater output force, which is said to provide leverage.

History

The first descriptions of lever are found to be amongst the followers of Aristotle at the Peripatetic school. Egyptians used a lever to build The Great Pyramids.

Archimedes is credited for the principles of leverage. While Archimedes did not invent the lever, he explained the concept of leverage in his literature work, On the Equilibrium of Planes. Archimedes designed pulley systems, allowing sailors to use the principle of leverage to lift objects that would otherwise have been too heavy to move.

Give me a place to stand on, and I will move the Earth. — Archimedes

Deep Analysis

Leverage refers to the ability to gain an advantage through the use of a tool, and is measured as the ratio of the change in output to the change in input. Focusing on high leverage activities then becomes important. For small amount of additional input, a large increase in output leads to maximizing our scarcest resource which is time.

Though leverage is a scientific concept, it has many other applications. In complex systems, leverage plays an important role.

Complex System

In complex systems, such as an economy, corporation, living organisms, a city, or an ecosystem, leverage can be earned where a small change in one thing can produce a big change in the entire system. Leverage is clear and specific. For example, how do we solve poverty? A specific and clear leverage can be used such as economic growth. By providing robust jobs, a city can escape poverty.

Whether in system analysis or decision making, you should always think of applying leverage by working on smaller changes which would output a significant and impactful change.

Negotiations

Why do we always pay more for food at the airport, theaters or theme parks? These businesses don't have alternative offerings giving them the ultimate leverage on prices.

Money is not equal for all people. A strong personal brand adds more lift and leverage. One dollar from me may buy a soda from a car dealership, but one dollar from Justin Bieber may get him a Ferrari. And they'd pay him to drive away. — Jarod Kintz

Wealth

Use leverage to build wealth. How can you maximize beyond the hourly input-output?

Leverage.

If you can only earn with your time on hourly basis, the only way to build wealth is with deep specializations in medicine (doctor), law (lawyer), software (engineering), etc.

Using leverage you can go beyond hourly input-output boundaries. When using leverage tools such as money, employees, or products, you can create more value for more people in the same amount of time.

Humans evolved in societies where there was no leverage. If I was chopping wood or carrying water for you, you knew eight hours put in would be equal to about eight hours of output. Now we’ve invented leverage — through capital, cooperation, technology, productivity, all these means. We live in an age of leverage. As a worker, you want to be as leveraged as possible, so you have a huge impact without as much time or physical effort. — Naval
A leveraged worker can out-produce a non-leveraged worker by a factor of 1,000 or 10,000. With a leveraged worker, judgment is far more important than how much time they put in or how hard they work. — Naval
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