Part II · Chapter 3 · Human Capital · lesson 4
Why one hour of some work is worth a thousand of another
11 min
Builds on The two inputs, and how their shares move
Part II · Chapter 3 · Human Capital · lesson 4
11 min
Builds on The two inputs, and how their shares move
Two people each spend an hour on Tuesday morning writing.
One writes a careful email to a colleague explaining a decision. It is a good email; the colleague understands the decision and acts on it correctly.
One writes forty lines of code that removes a manual step from a process that runs eleven thousand times a day, forever.
Both hours were an hour. Both people worked at about the same intensity. The second hour is worth several thousand times the first, and this has almost nothing to do with the second person being better at their job.
Leverage is the multiplier that sits between your effort and the output your effort produces.
Without it, output equals effort, and income is bounded by hours in a week times the most anyone will pay for one. With it, the same hour is applied to a larger denominator — more customers, more capital, more people, more copies — and the bound moves.
The multiplier is a property of the position, not of the person. This is the single most under-noticed fact about why incomes differ.
Four sources, and they behave differently.
Capital. Your decision applies to a large amount of money. A person allocating a hundred million makes the same kind of judgement as a person allocating a hundred thousand, in about the same time, and a one-percent improvement is worth a thousand times more. The multiplier is the size of the pot.
People. Your work is carried out by others. A decision that changes how forty people spend their week is forty weeks of effect from one afternoon. The multiplier is the headcount, and it is the one with the hardest ceiling — coordinating people gets more expensive per person as the number grows.
Copies. Your output is duplicated at close to zero cost. Software, writing, recordings, designs, processes. The multiplier is the number of copies, and it is the only one of the four with essentially no ceiling.
Position in a flow. Your work sits at a point that everything passes through. The person who sets the default option on a form that a million people fill in has more effect on outcomes than almost anyone else in the building, and usually does not know it.
Predict
A multiplier multiplies whatever you put through it.
The engineer whose forty lines remove a manual step from a process running eleven thousand times a day can also introduce an error into a process running eleven thousand times a day. The person allocating a hundred million can lose a hundred million with the same afternoon's work. The default on the form can be wrong.
This is why leverage arrives bundled with the responsibility factor from the previous lesson, and why high-leverage roles come with review processes, sign-offs and audit trails that feel disproportionate to the work involved. They are not proportionate to the work. They are proportionate to the multiplier.
Not the same thing
How much of yourself the work consumes — hours, attention, physical toll.
How many times over the result of an hour's work is applied after the hour is finished.
Which is which? Put each one on a side.
Writing a checklist that every new hire follows for the next five years
Working a double shift to clear a backlog
Deciding which of forty projects the team works on this quarter
Leverage is not evenly distributed across jobs, and it is not evenly distributed within them either.
The same role in a firm with ten thousand customers and a firm with forty has the same tasks and a denominator two hundred and fifty times different. Neither person chose that. It shows up in their pay, and both of them will construct an explanation involving their own abilities.
Within a single job, tasks differ enormously. Answering one customer's question has a multiplier of one. Writing the answer into the documentation so the question stops arriving has a multiplier of however many people would have asked. Both are the same person on the same afternoon, and organisations frequently measure the first and not the second.
Check
Three of the four multipliers require somebody to hand them to you. Capital has to be entrusted. People have to be assigned. A position in a flow has to be granted.
Copies do not. A thing that duplicates at zero cost can be made by anyone with the time to make it, and nobody has to approve the denominator.
That asymmetry is a whole lesson in the leverage track later in this course. The part worth noticing here is that most of the leverage inside a job is the permissioned kind, which means most of the multiplier in a career is decided by somebody else's decision about you rather than by your own about yourself.