The Power of Leverage by Utilizing Systems

Everyone wants to know what the secret is to successful business practices. They want the quick-fix, get-rich over night answer. And they want it now. Instant gratification has become a must-have instead of a once in a while thing. The truth is, there isn’t one secret that will transform you and your company overnight into multi-millionaires. However, while there aren’t secrets, there are things that are done which work extremely well that many do not know about. Is that considered a secret?

One of the ways that companies are able to expand and keep expenses low is through the power of leverage. Leverage is utilizing another’s strength to benefit from. This can be a win-win situation. Leverage does not equal greed, nor does it mean that it is always used in a negative manner. It can be used for good and help all parties involved. And that is what this article is about.

A great example of leverage is McDonald’s. McDonald’s created a system that was extremely simple, that worked

every time, and was profitable. They then franchised the company, leveraging the system to expand the company and brand. The incentive for franchisees is not only that the brand is popular, but that it works, every time! Each restaurant follows the system, resulting in the same experience whether you are in San Francisco, California or Beijing, China. The company continues to be successful and the system continues to work as it did when it was fist created. The owners of McDonald’s are not flying around the world, working in the restaurants at all hours to make this work. They focused their efforts working on the company, on the system, and on expanding that system throughout the world. They used leverage to expand the brand and the company, while providing opportunities for employment and ownership of a McDonald’s restaurant. They have created a win-win situation where the franchise and the franchisee’s both win.

The concept of a business expanding is quite simple. Create a company and brand around a system that works every time, is profitable, and can be replicated over and over. Some might say that is the corporate world is where everything has the same, dull manner. But create a unique experience, a brand and a mission statement that impacts the world and makes a positive difference, and you have created a culture through your company. The more stores you open, the more you help your clients and customers and help improve the world. No matter what it is that you do, to get ahead, it takes leverage.

A Personal Form of Leverage

Imagine that you want to purchase a house. You don’t have the $400,000 it costs in cash. Instead, you take out a loan, a mortgage, in which you make an agreement to pay each month until the house is paid off. You are using the bank’s money to allow you to buy the home. That is leverage at work.

Web 2.0: Leverage At Work

Now, let’s look at the internet. The internet is a series of websites which all function as systems in themselves. The site is created to guide you through it in a certain way- to get you understand the information it is presenting. At the end, it may ask you to purchase something, donate to a cause, or sign up for a newsletter through email. While people created the website, it is functioning on its own, while the person is free to work on other things. That is leverage! Now, you add in e-commerce, and the website will sell your products or services virtually for you, adding another component to the system, eliminating another task that you must perform. Instead of spending hours updating each site individually, it is done automatically. You just have to manage the system you have created, maintaining your quality and brand.

One step further would be to decide when your social media sites are updated. Now you can control when and what time your updates post. This can create a marketing blitz in and of itself, getting your readers excited about what new information you have for them. On top of having your profiles across the web be updated automatically for you, you can spend the time to design a unique web-experience that is your website. What can you add that will make visitors stay, bookmark your site, your feed, and come back often?

In essence, when you update your blog, your RSS feed will then be sent to update your Twitter account. You can create a system online where you update once, and a message is sent out to multiple feeds, reaching more and more people. This is yet another powerful example of leverage at work. Combining the online and offline systems will create a powerful system that will reach across the world. It is you and your company’s job to manage this system to reach its potential.