“With a lever big enough I could move the earth itself” – Archamedes
What is leverage?
The Definition According to Google is:
1. the exertion of force by means of a lever or an object used in the manner of a lever.
2. FINANCE – the ratio of a company’s loan capital (debt) to the value of its common stock (equity).
1. use borrowed capital for (an investment), expecting the profits made to be greater than the interest payable.
“a leveraged takeover bid”
2. use (something) to maximum advantage.
“the organization needs to leverage its key resources”
What I am referring to specifically is the importance of time and how to get the maximum advantage from your time. Time can be negatively leveraged or positively leveraged.
“The most precious resource we all have is time.” – Steve Jobs
An example of the leverage of time is a meeting in the office. If you call a meeting for a 10 people and have no agenda, no plan, no key results for the meeting, and it becomes something that takes up everyones time and adds no value, this is an example of negative leverage.
In this case the meeting has a negative leverage of 10X. If you have 10 people in the room and they are each paid $100 per hour and by the end of the meeting you’ve added absolutely no value then you are:
It’s not just the money that you are loosing but also the time itself. Not only that, there is an opportunity cost. let’s say each of these people could have spent that hour to make $1000 for the company, now you are in an even worse situation because you are now:
Now what if you had a meeting that added massive value to the sale team? What if you taught them a new strategy or tactic that dramatically improved the quality of their selling. What if by implementing one strategy at this meeting they were able to increased their sales by 5% or by 10%?
Let’s say the average person in the meeting was pulling in $1,000,000 in revenue per year and through the strategy you introduced at the meeting they were now able to bring in $1,100,000 per year. You would have
-10 man hours
+$999,000 for the year
What a difference leverage can make! This is the true power of positive and negative leverage.
In financial terms, debt is also known as leverage. This can create massive gains if it’s working well and horrible losses when it’s not. The lesson I’ve learned from moving from being a top producing sales person to a leader of a team of top producing sales team is that meetings can be the most powerful leadership leverage you have.
As a sales person, I had the belief in the past that many meetings are negative leverage. And then I realized, as a sales leader I now have the power to influence and impact the team in a way that cannot be always be quantified.
As a sales leader this is truly one of the most important and powerful discoveries you can make!
As a top performing sales person I understood the power of leverage. Now that you understand it, how can you use leverage to increase your sales dramatically?
The answer of course is to do more high leverage activities. One of the most high leverage activities I pursued as a sales person was the reading of books, listening to audio tapes, and training programs that would increase my skill levels in key result areas.
Again the highest leverage behavior/habit and highest leverage use of time is learning and investing in yourself. This pays huge dividends now and for years to come. Again the highest leverage activity you can take is investing in yourself and becoming the best version of you.
If you become the best version of you, how many more people are going to want to buy from you?
How many more people are going to love the services you provide if you are performing at your absolute best because of the new techniques and skills you’ve mastered?
Now what else can you do that is high leverage?
Another high leverage activity that is missed or overlooked by many average sales people is the building of systems and processes and the improvement of systems and processes. if your proposal building process takes you 10 hours per week and you spend 10 hours to build a system that brings this down to 1 hour per week, you’ve significantly leveraged your time now and in the future.
The challenge is that most people won’t spend the 10 hours to build the system in the first place and then wonder why their income isn’t taking off.
1) Look at your calendar from last week. What activities are low, medium, and high leverage?
2) What are high leverage activities that you will do more of ?
3) What are the low leverage activities you can eliminate or delegate?
4) Write down your to-do list for next week and write an A,B,C,D or E next to each task using this formula as a guide:
A = Highest Leverage Task
B = Medium Leverage Task
C = Low Leverage Task (Candidate for Delegation or Automation or Elimination)
D = Delegated/Automated Tasks
E = Eliminated Tasks