A critical glossary of contemporary management terms XII – leverage

Give me a still point,  and I will move the world, Archimedes is reputed to have said by Plutarch. The idea is that finding a fixed place and using mathematical reasoning enables a relatively small amount of force to move a very large object.

The word leverage (sometimes known as gearing), is originally a financial term meaning to borrow money in order to finance the purchase of an asset. Borrowing to buy allows for a return to investors bigger than the sums involved in financing the debt: it also allows for counting the purchased asset to be used as collateral ileveragen other financial transactions. Anyone who supports Manchester United football team will be aware that this is the financial model that the Glazer family have used to buy the club and pay themselves and their investors large sums of money on an annual basis. But, as an example of the ways in which organisations have become permeated by financial language, it has come to be applied to all manner of management practices. As instances, managers might claim to be able to leverage talent or creativity in their organisations, or perhaps they might intend to leverage knowledge. Recently I heard a colleague say that they were leveraging their relationships with others.

Leaving aside the implied instrumentalization of highly intangible abstract concepts, the idea of leveraging implies two clear intellectual assumptions.

First is the idea of ground. For Archimedes to leverage the world implies a fixed place to work from, what the poet TS Eliot referred to in The Four Quartets as ‘the still point of the turning world’. We might consider the longing for ground as part of the human condition, a yearning which works against the daily experience of being blown about in a world of ceaseless change. Perhaps we all crave some stillness and certainty in our lives as the pace of change gets faster and faster. Ground helps us find ourselves again.

The concept of ground shows up in the world of Platonic thinking, with the idea of pure forms, or as Plato’s highest form of knowledge, mathematics. It also reveals itself in religion, where the still point in the turning world is God; and again in certain forms of natural scientific thinking and reasoning, where one established fact leads in linear and logical fashion to the next. We add, in cumulative fashion, to the stock of knowledge in the world. This way of thinking is sometimes referred to as foundationalism, the idea that we proceed in our reasoning from something fixed and certain. Perhaps naturally enough, the postmodern reaction to foundationalist thinking is anti-foundationalism, the idea that there are no fixed points from which to proceed, no grand narratives in which we can believe: there are only competing truths.

The second clear assumption is the idea of managerial control and a god’s eye view. Somehow the manager is considered to be outside the processes of creativity, or knowledge, or even relationship, and is in a privileged position to act upon them to achieve what they want. In order to instrumentalize something implies fully cognizing what it is one is trying to instrumentalize, along with a degree of predictability and control of the object to be manipulated. The object will behave according to prereflected rules. The predominant theories of management taught in most business schools imply this privileged position, that managers can control and manipulate (to manage – to put under one’s hand) sometimes highly complex and intangible human processes like culture or knowledge using instruments and tools, levers if you like.

If we take away the assumption of firm ground, and the assumption that we are in a privileged position to cognise and manipulate, then what is left for managers to do? If applying ‘levers’ to human affairs is only ever a probabilistic undertaking, then what’s the point of taking an MBA? Taking an interest in complexity and process can indeed be a wounding to the managerialist soul.

One way of thinking about rehabilitating managers and what they might achieve would be to consider that there are more options than having ground or no ground: there could be good enough ground for now. This is sometimes called a post-foundational position, and is one adopted by the pragmatist tradition in philosophy. We might achieve a clear enough understanding of what’s going on in order to take the next few steps together. Once we have done so we might change our minds about what the situation demands. It leads managers to abductive thinking, rather than induction or deduction, a process which starts with surprises of puzzles and draws on the full gamut of human reasoning, including imagination. It does not necessarily assume that reasoning just proceeds in linear fashion from firm ground.

Secondly, to say that managers have no privileged position is not the same as claiming that they have no influence at all. Managers are often highly influential players in the game of organisational life, and what they say and do, and don’t say and do, will affect the way the game is played. Although in no position to ‘leverage’ anything, managers often have considerable power to persuade, to cajole, to reward, to punish, to inspire those for whom they have responsibility. Rather than thinking about these processes of influence as instrumental, levers of power, they are instead rhetorical and processual.


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