The Crunch

Whenever you hear the word “leverage,” reach for your metaphorical revolver.

Over the past decade or so, the word “leverage” has spread through the business world like a virus. The trend has caught on in other fields, too, but business is the primary culprit. Here’s just a tiny sample of what you get when you Google it:

  • “building strong brands by leveraging conversational capital”
  • “achieving operational effectiveness by leveraging knowledge”
  • “make your music profitable by leveraging events context and relationships”
  • “3 ways to leverage social interactions into your SEO campaigns”
  • “how to leverage outbound sales”
  • “Discover to leverage Paypal’s new adaptive payments APIs to enable cardmembers to make person-to-person payments”
  • “eBay revamps mobile website to leverage Smartphone innovations”
  • “Develop compelling copy that differentiates the brand, while leveraging the ‘pain-benefit’ value paradigm” (job description from Craigslist)
  • “Leading by Leveraging Culture” (the title of a marketing article in the Harvard Business Review)
  • “leverage your Linkedin profile”
  • “use Squidoo to leverage your writing”
  • “Facebook’s new functions (and how to leverage them)”
  • “how to stay afloat by leveraging any skill you have”
  • “how to leverage hair shows into dollars”
  • “10 irrational human behaviors and how to leverage them”
  • “make money on property by leveraging other people’s money”
  • “increase customer engagement by leveraging secret tricks used in addictive computer games”

As noted, this is a recent phenomenon. In the Google Books archive, the phrase “to leverage” appears in 101,000 publications in the past decade (2000-2010), which is almost double the entire previous century (61,700 publications between 1900-1999). The phrase “by leveraging” appears in 17,200 publications in the past decade (2000-2010), which is more than triple the entire previous century (5,520 publications between 1900-1999).

If leveraging stuff is such an important part of doing business, one wonders how business managed to get along without it until recently!

Many people are annoyed by this leverage mania not just because it’s overused, but because they think it’s used incorrectly.

Some critics object to it on grammatical grounds. They insist that the word is a noun, but business people use it as a verb. For marketers, instead of leverage being something that you have, it’s something that you do. And that’s wrong, isn’t it?

Well, not according to Jackie Henkel, professor of English at the University of Texas, who recently advised us that “There’s no real right or wrong on this issue; what matters is general professional consensus.” And she went on to explain:

 “In the history of the English language, English has progressively lost various markers of grammatical function, with the result that word order has become more important than inflection in determining what part of  speech a word is in a particular sentence. Speakers of English can then use word order to essentially create new parts of speech.  For example, if you put any noun in front of another noun in English, in the adjective position, that is, then the noun assumes an adjectival function:  ‘I like the tile’ versus ‘The tile floor is scratched.’ This process is called ‘functional shift,’ and it means that historically there has been a lot of shifting around in parts of speech, for instance between nouns and verbs.  Usually people have a negative reaction to a recent innovation of this sort (as in ‘I’m going to friend you on Facebook’), but eventually the new function of the word comes to be accepted. In this particular case, as you can discover by consulting the Oxford English Dictionary, the authoritative source on matters etymological, ‘leverage’ as a noun seems to have appeared in the early 18th century (derived from the noun ‘lever’) and began to be used in the 1930s as a verb.  It appears as an adjective (‘leveraged buyout,’ etc.) in the 1950s. However, the source word ‘lever’ itself, reported as a noun in 13th c. Middle English, apparently derived from a 12th c. Old French verb.  So there you have it. The movement between verb and noun has been going on for some time.”

Fair enough. But apart from questions of grammar, it seems that “leverage” is typically used in a pretentious way, to make something seem more sophisticated than it really is, and thus hindering communication. In most cases, a simpler word—use, apply, employ—would probably work just as well.

Our friend Janok Bhattacharya, a McMaster University scientist, has offered a  compromise that seems rather useful:

 “A lever is a mechanical device for producing a large effect with application of only a small force. This is the lever principle. So I would argue that the word leverage be used only when there is a clear transfer in the magnitude of effect desired versus cause.”

So, to use the first Google bullet point listed above as an example, if a marketing expert claims to be “building strong brands by leveraging conversational capital,” then the application of conversational capital (whatever that means!) should be of sufficient magnitude to have a clear effect on building strong brands. If it doesn’t, then the claim of leverage is most likely fraudulent.

So, whenever you hear the word “leverage”…







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