How an organization gains leverage

Auren Hoffman · November 22, 2010 · Short URL:

(and gets more done)

Organizations can accomplish more by increasing the "impactfulness" of their employees.  In general, there are three ways for star employees to have more impact:

   1. Decrease the time needed per project (boost their efficiency)
   2. Increase their available time (hiring and delegation)
   3. Increase the impact per project (automation)

Working on each of these three areas is important for employees to get leverage and accomplish more.  Doing any one of these three things well will massively increase productivity and output.  But doing all three things well will ensure your organization is unstoppable.

To-do listBoost Efficiency (Decrease Time Needed per Project)

There is a lot written about efficiency, tasks management, and more.  We can all be more efficient.  We can manage our inbox better, prioritize our deliverables, use keystrokes instead of the mouse, understand Internet research tools, get better sleep, get rid of external stress, stop doing low-priority tasks, and more.

We all have our tricks.  Mine is to decrease distractions (no alerts when receiving a new email or IM) and work on just one and only one thing for 20 minutes at a time.  These tricks tend to be incredibly personal and may not generalize to the broader population.

Most up-and-coming twenty-somethings obsess about efficiency ... and they should - it works!  The average Ivy League graduate could squeeze 200-300% more output by just becoming more efficient.  That's a gigantic increase.  But by the time many of those up-and-comers hit their 30s, they have improved their processes substantially and implemented most of the easy gains.  For these people, they might only be able to increase their productivity by 20-30% -- substantial to be sure, but the gains are smaller.  While we can all be more efficient (especially as technology waves happen), there is an asymptote for efficiency: you can only get just so good.

efficient womanHiring and Delegation (Increase Available Time)

Another way to gain more leverage is to increase available time for star employees.  In addition to eliminating unnecessary meetings and reducing overhead within an organization, a common way to accomplish this is to hire more people.  You gain leverage by farming out time or expertise to others.

We all do this in everyday life.  People pay contractors to gain leverage all the time: lawyers, accountants, plumbers, mechanics, electricians, technology consultants, barbers, add more benefit because they have a narrow expertise that we need which we are willing to pay for rather than spending countless hours figuring something out.

Unfortunately, as you add more people to solve a problem, communication between those people suffers.  In a two-person organization, there is only one line of communication.  But when you add dozens and then hundreds of people, the number of communication channels goes up exponentially (in engineering, we call this an "n-squared problem").  What happens is that less communication happens which creates a barrier for getting things done.  Instead of freeing time, you add new meetings, and end up consuming more time.  So while a one-person organization might get X done, a 100-person organization might only get 70x done.

Of course, there are ways to mitigate this (like open communication, proximity, and only hiring A-Players so you need less people), but even ensuring the communication is as efficient as possible, people just don't scale linearly.  So while hiring to increase available time is one way to boost leverage, automation can have far more impact.

Automation (Increase Impact per Project)

To truly gain leverage, an organization needs to automate.  Use technology to get things done faster, better, cheaper, and easier.  By automating processes within a company, you can vastly increase the impact per project individuals work on; instead of spending their time on one-off projects, employees can focus on building high-value, repeatable products, and processes.

When looking to automate, concentrate on things that people in your organization repeatedly spend a lot of time on.  If your customers are constantly calling you about help with ABC, it probably means ABC is hard to use, clunky, or buggy.  Instead of hiring more customer service agents to answer questions about ABC, it's better to take the time to make the product better and ensure customers will not have the problem in the future.  Large telcos and cable companies probably have 2-3 times the number of people they need: they should focus on bettering the product and automating the interaction.

Banks introduced ATMs and airlines Leverageintroduced self check-in ... and people got happier.  Consumers love automation done right because part of automation not only saving your employees' time, you are also saving your customers' time.  I still don't understand why I can't self check-in to a hotel and just print out a key (or why they cannot at least check me in on the shuttle from the airport).

This is why great engineers are so important; they have the skills to automate processes for the rest of the organization.  You should focus on making the ratio of engineers to total employees in your organization as high as possible.  Engineers can take on making marketing processes better, help customer service, and even make dreaded expense reports easier.

There are limits to the value of automation, and there are also other ways to boost the impact of employee projects, such as smarter prioritization of work.  But smart automation can go the furthest towards building leverage for employees within your organization.

When looking to gain leverage in an organization, focus on boosting efficiency, freeing up time, and automating processes to maximize the impact of individual work.  Many organizations are very good at one of these areas but only rarely are companies good at all three.

Of course, even more important than gaining leverage is having killer breakthrough ideas.  Gaining leverage on doing something wasteful will still be a waste.  But if you have a killer idea, leverage can help you change the world.

Special thanks to: Jeremy Lizt, Travis May, and Jenny Oh for their thoughts and edits.

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Auren Hoffman

CEO SafeGraph. fmr CEO at LiveRamp. GIS nerd.

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