Finding the Leverage That Drives Your Business

Operating leverage is one of those terms that gets thrown around a lot, usually without much clarity. People hear it and think “cost structure” or “margin expansion” or “more throughput on the same base.” All of that’s true. But the core idea is simpler and more actionable.

Operating leverage is what happens when effort and investment don’t scale linearly. You do more without spending more in equal proportion. Or you get better margins because the system you’ve built starts working harder than you do.

The easiest way to find it is to ask a simple question.

What do we already do that we could do more of without increasing cost proportionately?

That’s where the leverage lives.

Sometimes it shows up in your go-to-market engine. Sometimes it’s in the tech stack. Or in a data asset you’ve been sitting on. Or in a process that, if you double down on it, starts compounding its impact. Every business model has a few of these points. The problem is that most companies aren’t organized around them. They’re organized around teams, org charts, product lines, workflows. Not leverage.

And so you end up with teams doing heroic work without material impact. Or new initiatives that suck energy from the parts of the business that actually work. Growth feels hard because you’re not leaning into the engine.

The companies that scale well find these points early and push on them. Google. Facebook. Amazon. Yes, they had massive market timing. But they also understood where the leverage was and built around it. When that happens, growth feels light. Not easy, but natural. Like the flywheel is actually turning on its own weight.

When we come into a business, we don’t start with org charts or budget lines. We start with the question of leverage. Where does the system want to scale? What would happen if we doubled down there? And what’s getting in the way?

Sometimes the answer is technical debt. Sometimes it’s a resource allocation problem. Sometimes it’s leadership focus. But if you don’t name the leverage points, you’re just managing complexity. You’re not creating value.

And that’s the shift we try to make with every leadership team we work with. Stop spreading energy across everything. Start pouring it into what already works. And then build around that.