Leverage capabilities

Almost all companies can use additional leverage.  Only the most exceptional have all skills, capabilities, tools and personnel to deliver on all the opportunities available to them.  The key is to understand what capabilities your company needs and the most effective way to leverage them.

There are three broad approaches: 

• Targeted, project-based leverage 

• Transitional leverage 

• Structural leverage

Targeted, project-based leverage

Project based leverage is the right approach when your company has a short term need and lacks the skills to manage on your own.  Classic examples include hiring an outside team to implement a new ERP system, working with a lean operations expert to transform how your factory is organized, or leveraging an external team to facilitate post-merger integration.  You bring on talent to address a need and then move on. 

Transitional leverage 

Transitional leverage makes sense when you are looking to build an internal capability but need results during the interim.  This enables your firm to start improving performance in the short term.  Classic examples include hiring a part-time CFO when your company outgrows your internal finance capabilities or a marketing consultant who can project manage new initiatives while hiring the right marketing leader. 

Structural leverage 

Structural leverage is required when your firm needs an ongoing capability to succeed in the business.  If you can efficiently build it internally, then the right approach is to build your team, usually by hiring a star in that functional area who can lead the effort.  If the skills are very specialized, you may instead choose to outsource that effort via a long term partnership.