Leverage in Human Interactions
Leverage refers to the influence gained in interactions through something of shared perceived value. It is based on perception and social context, and its effective use requires balancing pressure to achieve desired outcomes without damaging relationships.
THE IDEA
Understanding where you have leverage
Levers provide leverage. In human interactions, these levers are not purely physical, but instead items or ideas that have a shared, common value. Leverage itself is amoral—neither good nor bad. When the term leverage comes up in day-to-day conversation, it sometimes has a negative connotation—as if having it allows you to manipulate a situation to your advantage. Leverage creates influence, which can be used in different ways. Think of negotiations, where having the leverage increases the chances that you will get your desired outcome. We are taught that by applying pressure in the right place you make it attractive for the other party to move in your direction: It often doesn’t take much force if the leverage is substantial enough. And really, the best way to have leverage in any deal is to not need the deal at all.
Knowing how much pressure to apply in any given situation is critical. Too much pressure breaks the metaphorical lever or takes you out of win-win. No one wants to be forced to do something, and if they are, they won’t think kindly of you which can hurt you in the future. Too little pressure and you might not achieve your objective. Leverage should be applied with conscious thought as to when it’s helping you achieve your aims and when it’s hurting your ability to do so.
Roger J. Volkema, in his book aptly titled Leverage, explains two of the principles of leverage in negotiations. The first is that leverage in human interactions is based on perceptions and second that it is a social or relational construct.1 What this means is that for something to be leverage, everyone has to have roughly the same perception of its value, and this is going to be dependent on social context. It isn’t any good to say, “I’m going to give you this box if you agree to my terms” if the other person doesn’t associate any value with that box. Furthermore, the power of leverage changes. You cease to have leverage if the other party walks away from the exchange.
Leverage is not a binary; something you either have or don’t have. Some people may use their leverage to get X. Some people may have the same leverage and use it to get X, Y, and Z. In order to use leverage to maximize your return, you need to figure out its potential and wield it wisely.
When to use it
In a job interview, you can gain leverage by having another offer, signaling that you have alternatives.
In a business contract negotiation, offering exclusive access or a limited-time discount creates leverage because the other party perceives value in urgency.
As a manager, you can use leverage to resolve team disputes by highlighting shared goals that both parties value.
In personal relationships, understanding leverage helps avoid manipulation by ensuring that influence is based on mutual respect and shared value, not coercion.
FROM THEORY TO EVERYDAY LIFE
In practice
The Box Exchange
In a negotiation, one party offers a box of unknown contents as a concession. If the other party does not value the box or its potential contents, the offer provides no leverage. Leverage only exists when both parties perceive the item as valuable.
Job Offer Negotiation
A candidate with another job offer can walk away from an unsatisfactory salary negotiation. If the employer values the candidate’s skills and wants to hire them, that alternative can increase the candidate’s leverage. If the employer knows the candidate has no acceptable alternative, the balance may shift.
A MOMENT TO REFLECT
Put it to work.
Think of a current negotiation or influence attempt: what do you believe is your leverage, and does the other party perceive it the same way?
How can you create or enhance leverage by improving the perceived value of what you offer without being manipulative?
Recall a time when you lost leverage in an interaction. What changed—did the perception of value shift, or did one party walk away?
Often confused with
References
- Leverage — Roger J. Volkema
CONTINUE THE CONVERSATION
Source texts
- The Great Mental Models Volume 2 Physics, Chemistry and Biology