The Four Quadrants of Leverage

Leverage is often seen as helpful: get more output from a given input. Yet leverage can also increase difficulty, e.g. a push up with elevated feet.

Organizations that pursue leverage may want standardization, reuse, specialization and separation of concern. Organizations that avoid it may instead reward ownership, tight integration, scrappiness and waiting for no one. Both have pros and cons. Regardless, it would be desirable for the industry to have a vocabulary to discuss leverage.

We should evaluate how leveraging something affects execution and craft:

• Execution: faster/easier versus slower/harder

• Craft: higher versus lower quality

These two dimensions are fundamentally independent, and both can be either positive or negative. We can thus map four quadrants, with craft as the horizontal axis, and execution as the vertical one:

Some organizational cultures assume that leverage is miraculous (top right quadrant) while others think it is catastrophic (bottom left). However, in reality, the most common scenarios are the top left and bottom right ones!

We can make better leverage decisions by considering these tradeoffs. A given project may benefit from quick and dirty execution leverage, and be negatively impacted by the detour of craft leverage. In another project, the reverse may be true. Of course, one should always try to avoid catastrophic leverage.

Get in the habit of asking: what kind of leverage is it?