How to Lead with Leverage: Unlocking Untapped Potential
Untapped human potential, natural resources, and existing technologies offer vast possibilities for win-win growth.
Leveraged for Success
Leverage is a powerful tool that unlocks growth and innovation across the globe. It is the secret behind the exponential rise of numerous organisations in the digital age, allowing them to scale operations, access vast resources, and achieve remarkable growth without the constraints of ownership.
As business leaders, understanding how leverage operates within successful companies enables us to reflect on untapped potential waiting to be leveraged for global win-win growth, positively impacting our careers, companies, communities, countries, and the wider world.
This shifting landscape is captured by Stephen Denning in his book ‘Reinventing Capitalism in the Digital Age’:
“In the digital age, radically different business models have become possible and even necessary: from markets to platforms and ecosystems; from ownership to access; from workers to co-creators of value, from sellers and buyers to providers and users.”
This insight lays the groundwork to explore the role of leverage and how it can be used to harness untapped potential and growth.
Today’s Big Winners
For exponential organisations (ExOs), those that achieve tenfold growth by utilising emerging technologies and innovative business models, leveraging assets means utilising existing resources without direct ownership or control. Companies like Uber and Lyft demonstrate this by employing car-owning drivers' vehicles to provide transportation services. This approach cuts operational costs and facilitates rapid scaling across different regions.
The value of leveraged assets also lies in their scalability. Assets that can be digitised or transformed into information, such as Airbnb's accommodation listings, can be shared widely and scaled indefinitely. Airbnb demonstrates how leveraging homeowners' assets can offer global lodging options, impossible if the company were to own and manage these properties itself.
Additionally, leveraged assets provide access to specialised expertise and capabilities. For example, open-source software enables companies to tap into the collective intelligence of a global developer community, fostering rapid innovation and cost efficiency.
Fractional ownership, where assets are shared among various stakeholders, is another benefit of leverage. This model, applied to intellectual property or real estate, allows multiple parties to enjoy the benefits and revenues from shared assets.
The strategic use of leveraged assets enables organisations to scale, access specialised resources, and innovate more efficiently. This model has driven organisations toward exponential growth by maximising external assets and capabilities, rather than relying solely on internal resources.
Distorted Gains
It is important to acknowledge that these companies and their business models are not without flaws, sometimes leading to negative consequences, such as the underpayment of individuals providing services like driving. These instances highlight the need for a balanced approach to leveraging, ensuring that growth and innovation do not come at the expense of fairness and equity.
As we learn from these models, it is imperative to refine and adapt leveraging strategies to foster not only economic success but also social responsibility and sustainability. This nuanced understanding of leverage allows for the development of more equitable and sustainable business practices that can serve as robust foundations for future organisations.
Leverage Beyond Big Tech
The benefits of leverage extend beyond Big Tech and can be found in the following examples:
Rent the Runway1: This fashion company leverages high-end designer clothing. By allowing customers to rent, rather than own, designer dresses and accessories, Rent the Runway offers a sustainable and cost-effective way to access quality fashion, leveraging fashion designers' assets.
Turo2 and Getaround3: These peer-to-peer car rental platforms enable individuals to rent out their personal vehicles. By leveraging car owners' assets, these platforms offer a convenient and affordable car rental service to customers.
Open data sets: Organisations, including government and research institutions, leverage open data sets for innovation and value creation. Companies like Mapbox4 use open data, such as satellite imagery and mapping data, to develop customisable, interactive maps for various applications.
Uncovering Underleveraged Opportunities
As leaders, it’s crucial to see: The status quo does not reflect the full extent of what is possible.
More of the world's potential for leverage remains untapped, often hiding in plain sight, like the car in the garage used by Uber and Lyft, or the outfit temporarily provided by Rent the Runway.
Many aspects of human potential, natural resources, and existing technologies are underutilised and often undervalued. The potential for leveraging these assets towards global growth and sustainability is vast.
Exploring human potential, we can consider the large numbers of individuals with high potential, including in underrepresented communities around the world. These are people with skills, creativity, and capacity to learn and innovate, often overlooked due to geographical, economic, or social barriers. Initiatives like remote work platforms can leverage this untapped talent by providing access to global job opportunities, breaking down traditional barriers to employment. For example, Andela5, a company that identifies and develops software developers in Africa, connects them with global tech companies, leveraging untapped human capital for mutual growth.
Mindset Matters
Adopting a new mindset can be a significant challenge for leaders, yet it is crucial for identifying opportunities and creating models that transform underutilised assets into engines of growth and innovation.
In the digital age, scenarios and statistics traditionally viewed as challenges carrying significant economic and social costs can be reimagined as opportunities for crafting win-win solutions. A shift in perspective is all it takes.
Do you see problems or possibility?
Global Talent Pool: Over 5.55 billion active internet users exist worldwide, many of whom represent a vast pool of talent capable of working remotely, on either a project or permanent basis.
Global Unemployment: In 2023, over 435 million people worldwide were unemployed, representing 5.1 per cent of the global population6. This number is expected to grow by two million people in 2024.
Forced Displacement: As of the end of 2022, 108.4 million people worldwide were forcibly displaced7. Onoing wars and conflict indicate this number is set to continue to rise.
Impact of Artificial Intelligence: 300 million jobs are at risk of being lost or downgraded due to artificial intelligence8.
Each number reflects an individual, and each individual embodies an opportunity. Collectively, these vast numbers signify one of the greatest untapped potentials on our planet.
Viewing these global challenges as opportunities, initially as a thought experiment, allows leaders to unlock immense potential for sustainable development, inclusive growth, and, ultimately, a more resilient and prosperous world. Embracing this new mindset necessitates a willingness to innovate, a commitment to ethical principles, and the courage to explore unconventional solutions.
There’s more to the world than what we see. By expanding our worldview, we unlock a universe of possibilities. Vast potential awaits, accessible to leaders with the mindset and ambition to unleash it.
Further Reading:
‘Reinventing Capitalism in the Digital Age’ by Stephen Denning (link here)
‘Exponential Organizations 2.0: The New Playbook for 10x Growth & Impact’ by Salim Ismail, Peter H. Diamandis, and Michael S. Malone (link here)
‘Global Success: See More, Do More’ by Sophie Krantz (link below)
Global Success: See More, Do More.
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In the past, a business leader’s vision was often constrained by the horizon – the literal and metaphorical limit of what could be seen or imagined. Today, the horizon has been digitised, and it’s vast. The scope isn't just your neighborhood or city; it's the entire planet. What drives today's leader isn't a local benchmark; it's a digital goalpost that…
https://www.renttherunway.com/
https://turo.com/
https://getaround.com/
https://www.mapbox.com/
https://andela.com/
https://www.ilo.org/wcmsp5/groups/public/---dgreports/---inst/documents/publication/wcms_908142.pdf
https://www.unhcr.org/about-unhcr/who-we-are/figures-glance
https://www.forbes.com/sites/jackkelly/2023/03/31/goldman-sachs-predicts-300-million-jobs-will-be-lost-or-degraded-by-artificial-intelligence/?sh=58d67c60782b
This article reminded me of complementary partnerships through strengths philosophy. Doesn't matter if your complementary partner is another human being on the other side of the globe, or a technology / tool that you can leverage to achieve your goals, the principles remain the same. Who can do it better? Who has resources that I need to achieve my objective? Who is in my 'coalition of the willing', and what skills / talent / knowledge do they have that I can leverage? Great article Sophie - many thanks!