leverage
LEH-vuh-rij
/ˈliːvərɪdʒ/
To use something to maximum advantage; the exertive power of a lever.
Leverage implies using a relatively small asset or force to achieve a massive, disproportionate result.
The story behind the word. Based on the physical lever, a simple machine that allows a person to lift incredibly heavy objects with minimal effort. Archimedes famously said of the lever: 'Give me a place to stand on, and I will move the Earth.' The business world adopted the term in the 20th century to describe strategic amplification.
Word relationships
- exploit: Exploit can have a negative, unethical connotation of taking unfair advantage, while leverage is purely strategic and positive.
- capitalize on: Capitalize on means to take advantage of an opportunity, while leverage emphasizes using an existing tool or asset to multiply your strength.
- weakness: Weakness is a lack of strength or advantage, whereas leverage is the amplification of strength.
Commonly confused with
- use: Use is a neutral term for employing an object, while leverage specifically means using something to multiply your power or influence.
Word family
- leveraged (adjective): Using borrowed capital or strategic assets to increase potential return.
- leveraging (noun): The act of using resources to gain an advantage.
Collocations
- leverage assets
- gaining leverage
- financial leverage
- strategic leverage
Example sentences
- "We can leverage our strong brand reputation to enter the European market." Business Strategy
- "The firm used financial leverage to acquire the competitor's assets." Financial Investment
Memory hook
Think of a lever lifting a massive rock with just one finger—that is leverage. Use a small tool to lift a heavy load.
When not to use
Do not use when simply using an object in a basic, non-strategic way (e.g., you don't 'leverage' a pen to write a note).
Fun facts
- In finance, 'leverage' refers to using borrowed money to increase the potential return on an investment, which also increases the risk.
Explore more words
agency, clout, outmaneuver, synergize, take advantage of, influence
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