Leverage: A Physicist’s Rant

In business speak, to leverage means to use. You might as well employ, deploy, or utilize. Just say "use", then.

However, in physics, "leverage" has a precise meaning. It's the principle behind clever contraptions such as

• the lever (duh).

• pulleys

• gears

These systems have one thing in common: They translate one physical situation into another and let you choose advantageous trade-offs. For example, with a 3:1 pulley, you can triple the force you can apply to something, but you pay for it by having to travel further: To lift something 1 foot with a 3:1 pulley, you must pull on the other end for 3 feet.

When businesses speak of leverage, this trade-off discussion is missing. To say, "We're leveraging AI" sounds like you get something for nothing. But just like in the Physical context, you rarely get a free lunch. Instead, you're making an advantageous trade-off. So, what is it you're trading in? And is it truly advantageous?

• You can use AI to generate code, or writing, faster. But can you keep quality the same?

• Using chatbots in customer service lets you scale up massively, but you trade in the human touch and connections.

It's essential to articulate what you're trading away and if you're okay with it that Leverage only makes sense if what you gain is more valuable than what you lose.