I just now realized that I had titled this post, but never wrote it. Since I initially numbered it 15 in an 18-part series and subsequently numbered another post as 15, we'll call this 15a.
What is leverage? Basically it's the ability that you have as a manager to influence your employees. It's how you get them to do things. It's also the amount of work that you can accomplish by convincing multiple employees to do things in quantities that you could not do if working by yourself. Let's look at the how first.
Most amateur managers know that they have the power to fire their employees. This is the most basic, crude and rudimentary leverage that you have. Most employees understand this instinctively and will follow a manager's direction, even when they don't want to, disagree with it, or just think it's stupid, because they know that refusal to obey the boss's will can result in an opportunity to find a new job. The problem with this, from a manager's point of view, is that even though you will get compliance, you won't get enthusiasm and you certainly won't get independent action or innovation. To refer back to an another article in this series, you will have employees forever stuck at Levels 1 and 2. Some managers are satisfied with this, and are happy with just basic, mindless obedience. They'll never get their people to Level 3, let alone 4 or 5, and may have to settle for Level 1.
I got my real-life lesson in leverage when I was an assistant store manager. I had been schooled in the wisdom of the Five Levels, of monkeys and left- and right-leaning trapezoids, but hadn't really learned how to properly leverage my employees. As an assistant store manager, I had a lot of responsibility. I often describe the unofficial job description as "All the stuff that doesn't fall into anyone else's job responsibility". All that responsibility, however, didn't come with any matching authority, not any official authority anyway. I threw my weight around, waved my title in people's faces, but no one was impressed. I wasn't making any serious attempt to gain leverage by winning these people over, and I lacked the foundational piece of leverage: the ability to fire someone, and everyone knew it. I hadn't made an effort to convince people to do what I wanted them to do, and they knew I had no real authority (my store manager at the time was a "nice guy" who undermined me quite often, so I had no reflected authority from his support). It was after a few incidents where run-ins with employees that resulted in a reprimand from my boss that I began to employ the lessons that I had learned years before and little by little began to gain leverage, not from blunt force, but from precision use of tried and tested management techniques. I have to admit that I was given a new lease on management life when my nice guy boss was replaced by a guy who more of a bull in a china shop than I was. This enabled me to start fresh and stop my attempt to bludgeon people into obedience.
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