Have you ever wondered why does a
certain employee get paid more than the rest? Why do certain products sell more
than others? Why do people follow a certain person and not another? The answer
is something you do not usually hear about. It is Leverage. So what is leverage? The Cambridge dictionary defines leverage as ‘’to
use something that you already have in order to achieve something
new or better”. Think about that for a
minute and look at the picture above. A small stone is lifting many other stones
even though the small stone is relatively lighter. How? Leverage. The wood
platform is the leverage.
The key words you should keep in mind are something you already have and achieve something new or better. You
still do not understand leverage? Think of it like this, you are a great
programmer and among the few who program in a given hard language. Companies
are seeking people like you because you have this skill and can solve their
problems and the company can make millions if not billions. This is leverage.
You have something that people want…you have value. Because you have this value, you have leverage and you can charge
companies whatever amount you want.
Leverage is everywhere. It’s the
ammunition that top achievers and winners use to keep on winning. The losers
say they are lucky or they are genetically gifted or they come from such a
wealthy background. No, it’s leverage. They leverage their skills and make a lot of
money from it. This is because their skills are hard and rare to find.
For instance,
Messi. Messi has
high value as he is the best footballer in the world (my opinion…watu wa
Ronaldo msinisumbue), and therefore has high leverage. Millions of people will
pay to see Messi play and Barcelona and many companies know this. Because of
his high leverage, he gets paid millions as his salary and millions more in endorsements.
Now not all of us can be Messi but we can use leverage to our advantage. And
the easiest way to have leverage is to raise your intrinsic value. What is intrinsic value you might ask. In a nutshell,
intrinsic value is how much you are worth in the job place. Intrinsic value is
based mostly on what you are bringing to the table. If you are bringing decades
of experience and wisdom, you have a very high intrinsic value. Conversely, the
opposite is true. That’s why entry level employees fresh out of University are
paid less than people who have worked for years on end.
However, there are always outliers to this. Even though you
might be fresh out of school, if what you are bringing to the table is of high
quality, then your intrinsic value is higher than someone who has decades of
experience. An example is if you have a certain skill that you have been honing
for a couple of years let’s say A.I. Not
everyone knows what A.I even means let alone how to implement it. Smart
companies see the value of A.I in the future to come and because you know this,
you have high intrinsic value. You have leverage. So it is not shocking to see
your underling being paid more than you even though he is a fresher.
High
Intrinsic Value = High Leverage = Better Pay
So the next time you complain why so and so comes late and
makes more money than you, remember that they have high leverage. They have a higher intrinsic value than you
as they bring more to the table. This is a good thing because it means you have
to get out of comfort zone and raise your intrinsic value. The higher your
value, the more you bring to the table and the more you get paid for. And
that’s your superpower…leverage.
You can also listen to the audio version on my podcast below.
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