Strategy

30th April 2014

Thoughts on Leverage 2 by Ian Kinnery

Last time we looked at the first of three useful definitions of leverage, “achieving ever more from ever less”. Today’s thoughts on leverage focus on the second definition, which is “divide to multiply”.

What this refers to is our ability to multiply the output by breaking a task down (dividing) into its smaller constituent parts, and improving each one of them by a small amount. The resulting overall increase is a multiplication of all of those small improvements.

In one of my seminars you will see how we break any business down to five parts. Lead Generation, Conversion Rate, Average Pound Sale, Number of Transactions and Margin and I will show how you can turn a 10% increase in each of those parts into a 61% overall increase. That is leverage at its best. It is both simple and easy and the secret to success.

Often there are big gains to be made. Other times the gains are much smaller.

At the 2012 Olympics, Dave Brailsford, the man behind Team GB’s stellar cycling successes over recent years attributed the team’s most recent successes to thousands of tiny improvements. A tiny improvement in the slipperiness of the helmets through the air, for example, would probably not be noticeable; but when that improvement is multiplied by better nutrition, more aerodynamic clothing, lighter bikes, better sports science, better mental preparation and all of the other tiny improvements they are capable of becoming the difference that makes the difference.

Leverage refers to the multiplication effect that all improvements, no matter how marginal they may be individually, have when compounded together.

A business without leverage is hard work.

We can increase the leverage in any business by understanding how it divides up into smaller, constituent parts, measuring our starting point, implementing improvements and measuring the outcome.

We will be looking specifically at the marketing leverage chart referred to above and other similar, simple, but oh so effective strategies to build a better, more profitable business whilst generating a better lifestyle in our next free seminar. Why not come along and hear for yourself.  Click here for details

Please note the change of date to 21st May.