Making High Leverage Decisions

January 25, 2021

Good business owners and entrepreneurs thrive on making high leverage decisions. With so many aspects of business to attend to on a daily basis as a founder, it can be quite time consuming having to continuously make decisions. The goal for every entrepreneur should to focus on activities that maximize efficiency and effectiveness. 

This is where the idea of high leverage decision making plays a vital role. But first, let’s take a look at high leverage activities. 

What are high leverage activities?

High leverage activities are those whose results are energy multipliers or those unique activities that can only be done by you. 

For example, if you are a podcast host, recording an episode of your podcast with a guest is a high leverage activity. It is something only you can do as the host. It is also an energy multiplying activity, in that it has the potential to yield a great Return on Investment (ROI) based on your audience and distribution channels. For one hour of a recorded episode, this could be listened to by 10,000 people. 

On the other hand, low leverage activities are those activities that can be easily outsourced within your business or when the energy put into them is less than or equal to the results. 

Harnessing Leverage

You’ve probably heard of the Pareto Principle or, the 80/20 rule. It states that 80% of the effects come from 20% of the causes. This appropriately means that 80% of the results in your business and life, come from only 20% of the tasks that you do.

Once you recognize this it can be quite eye opening. However, it also means that around 80% of your effort is being put into the low leverage activities we spoke about above. 

Your high leverage activities will be different to others’, so conducting an analysis of your daily activities in order to assess those which yield the highest leverage is a very helpful exercise. 

This process is less about creating new resources and activities and more about understanding how better to prioritize the activities and resources that you already have at your disposal. 

As Archimedes said:

“Give me a lever and a place to stand and I shall move the earth.”

Your ability to harness leverage and make high leverage decisions will allow you to create efficiency of scale as an entrepreneur. Once you analyze the daily activities that produce the best return on investment for your time, allocate more energy towards focusing on these and outsourcing those that don’t require your focus.

When you have a better grasp on the activities that yield the best ROI, you also get a better handle on being able to make better, high leverage decisions.

Making high leverage decisions also helps with decision fatigue and leaves room for workflow optimization in your daily life.

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