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What is leverage management? How can it help you increase output?
Activities have different values. So by increasing the leverage of activities, you can increase output. Leverage management uses three techniques to improve team productivity.
Read more about leverage management and how it works.
What Is Leverage Management?
Previously, we looked at the activity term of the managerial output equation. In this chapter, we’ll look at the leverage term. Because an activity value is multiplied by leverage, if you increase the leverage of an activity, you can increase your output by a large factor.
- For example, in the first equation, imagine activity #1 had a value of 10, activity #2 had a value of 20, and the leverage of both was 1, so your output was 30 (10 × 1 + 20 × 1). If you can increase the leverage of activity #1 to 5, your output becomes 70 (10 × 5 + 20 × 1).
There are three techniques to increase output when it comes to leverage management:
Technique #1: Adjust the Number of Subordinates Who Report to You
For maximum leverage as a supervisory manager, you should have 6-8 subordinates so you can give them each half a day of your time per week. (Half a day is ideal because it gives you enough time to effectively monitor but not enough time to micromanage.)
Though know-how managers don’t have official subordinates, they should also aim to influence 6-8 people or 6-8 coordinating or planning groups.
If your organization’s hierarchy doesn’t provide you with the right number of subordinates, you can “act” as a lower role to get the right amount. Here’s where you can consider leverage management.
- For example, if you manage a manufacturing plant, it might be divided into two divisions, engineering and production. This would mean only two people, the leaders of each division, would report to you. You can act as either the production or engineering manager, rather than hiring someone to fill the role, so that you get that position’s subordinates.
Technique #2: For Leverage Management, Increase the Leverage of Existing Activities
We’ve already looked at how to choose effective managerial activities. Now, we’ll look at how to make these activities more powerful, which you can do in five ways:
1. Affect a larger number of people. Often, you can do this by doing activities at the opportune moment—when you’re in the presence of or can influence many people at once.
- For example, finance manager Robin is in charge of organizing Intel’s financial planning process. If she gives all the presenters clear directions on what they should prepare in advance of the first meeting, the presenters and audience (around 200 people) will all have a clear idea of what needs to be done. If her initial directions are confusing and people don’t prepare or bring the right information to the meeting, Robin would have to have individual conversations with people after to clear things up, this would take her a long time and therefore provide low leverage.
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Here's what you'll find in our full High Output Management summary :
- How to increase your managerial output and productivity
- The 11 activities that offer a higher impact on output
- How meetings can be used as a time management tool
