Leverage is an often used buzz word when business conversations focus on productivity, growth and profitability. Oxford Dictionaries define it as the exertion of force by means of a lever.
In practical and slightly less mechanical terms — it is the use of resources at your disposal to change the equation that shapes the your status quo.
Leverage is one of the concepts at the heart of the conversation when professional service firms focus on productivity, growth and profitability. How do we gain it? What must we do to maintain it? What can be done to maximize it?
The application of leverage can move mountains. Misuse it, and you can seriously hurt yourself, to the point of lasting damage.
The principle has worked for centuries as human beings, faced with the need to innovate and improve on process, have explored creative ways to apply the principle.
But leverage has a dark side.
When an organization begins to conflate human resources with levers that can be pushed to the limit, and replaced, the pursuit of leverage can tear at cultural fabric. The erosion of characteristics like creativity, a sense of ownership and personal responsibility results in costly, potentially permanent damage.
Manufactured Tension Between the Bottomline and the Human Resource
Let me underscore that I believe the central motivation and most compelling reason for treating individuals as you’d like for them to treat you is that it is simply the right thing to do.
But for a moment we need to address the rationale offered for viewing certain parts of an organization solely through a leverage-lens: that this is a business, after all.
Great organizations and their leaders understand the business reason to guard against viewing an individual as a commodity that can easily be replaced: it diminishes leverage.
This is not a new idea. HR and organizational development professionals have been telling us for decades that individuals are more productive when they are engaged. (Check this HBR article.) If you need more data, talk to your Human Resources team. Here’s what you’ll hear.
To the degree individuals, departments, divisions or classes of an organization feel disconnected from a shared mission, the organization is sacrificing leverage.
This is the real reason Mission Statements have value. It is not so you have a pithy paragraph to post on your website. Rather, a clear articulation of mission enables each member of a team to embrace a personal piece of the vision. Or — in plain terms — this provides the real reason everyone shows up every day.
A measurable stake in a common pursuit is the real fuel of higher productivity.
Take The Law Firm Downtown
For decades the leverage model has been at the heart of how many law firms have delivered their professional service. Inexperienced (and typically young) lawyers in need of real-world experience are engaged by more seasoned attorneys to accomplish tasks demanding lots of time, but not much experience.
With this model, the inexperienced gain on-the-job-training, while making it possible for more senior lawyers to offer their extensive experience to additional clients…which puts more young associates to work…and so it goes.
The glitch comes when younger lawyers begin to believe the firm sees them as little more than replaceable levers in a process. Detached from mission, the younger lawyers seek greener pastures. The cost comes not only in the loss of the resource, but in the absence of the organic development of experience. The sum is the erosion of culture.
While this is perhaps the most visible area where a firm’s culture can result in a costly loss of leverage, it is not the only one. Consider two timely and relevant challenges.
Diversity and Inclusion
For more than two generations the absence of diversity has robbed the legal space of the strength that comes with the perspectives and experiences of an inclusive culture. And while a handful of firms are showing signs of a change in attitude, board rooms heavily weighted with 60+ year-old white men still shape the daily operations of the industry.
Then There Is The Business Side of Things
The bifurcation of a firm — those who attended law school on one side, and everyone else on the other — limits the degree to which the experience and skill sets of all can be leveraged. When this division results in the separation of those experienced in the disciplines of business from the decisions central to how the business runs, the levers of leverage are, in effect, untouched.
Keys To Regaining Leverage
Examples, good and bad, can fill volumes; and the subject warrants far more attention than one article can deliver. But in the interest of conversations that give rise to creative thinking, here are 4 ideas on ways to realize greater leverage in any organization.
1. Be Clear About Why You Do What You Do
You can call it soft and scoff at the idea that an understood and shared mission makes a difference; but I hope you’re in the mood to struggle with cultural disconnect. Great organizations are made up of individuals who buy into the mission, and are clear about why today’s work matters. If your entire team doesn’t know how the work of today connects to the reason you exist, you’re losing leverage.
2. Be Inclusive
Sure…you’re talking about it. Everyone is. But if you’re talking about inclusion because it is the hot topic of the moment, you’re missing the point. Two points, really. The business reason this is an important conversation is that it embraces the broadest perspective and the richest experience inside your firm. It is the way an organization ensures it is approaching a conversation, an opportunity or a challenge with every tool it has access to.
Then there is the fact that it is the right thing to do.
3.Turn Your Team Loose
If you have a team, you likely assembled the various players for a reason. Allow and expect them to perform the jobs for which they were hired. If you don’t, you’ll lose the best of the group. (Side note: if you’re repeatedly searching for “the right fit” in key roles you may not be clear about overall strategy, making it difficult to engage the human resources aligned with your goals.)
4. Treat Your Human Resources Like Human Beings
There are clear business reasons to support and encourage every member of your organization. The most compelling is that the greatest source for creativity and innovation you need to win in today’s market is your team or tribe.
Treat individuals like commodities, and don’t be surprised when you sacrifice leverage at every turn.
But inasmuch as it may seem a forgotten value, it is worth repeating: the greatest return on personal interactions, wherever they might present themselves, is realized when we find a way to pause…and treat others the way we would like to be treated. Why the note to pause? Because we must first see others the way we wish to be seen.