Identify the weakest actor in the chain by analyzing the power dynamics, financial strength, and forward and backward linkage. Then analyze the criteria that is weakest for the particular actor. That criteria is the leverage point in VCA.

The concept of leverage is one of the most powerful in all of science. Archimedes proved the Law of the Lever and applied the law in a variety of inventions. Historian John Tzetzes, writing in the 12th century, wrote that Archimedes said "Give me a place to stand and with a lever I will move the world."

In systems thinking approach to value chain analysis, a leverage point is a place in a system's structure where a solution element can be applied. It's a low leverage point if a small amount of change force causes a small change in system behavior. It's a high leverage point if a small amount of change force causes a large change in system behavior.

Finding the high leverage points for a difficult social problem requires the use of advanced problem solving tools.

How do you Identify a Leverage Point?

In difficult problems, high leverage points resolve root causes. Why this is so is explained in the causal chain glossary entry.

Therefore the only reliable way to find high leverage points is to first find the root causes. Then, and only then, can you start looking for the high leverage points associated with each root cause.

If you haven't found the root causes, then your solutions are pushing on low leverage points in a vain effort to resolve intermediate causes. That's why they're not working.

In science leverage is the ratio of change in output to the change in input. The formula for calculating leverage is:

leverage = change in output / change in input

which is the same as: leverage x change in input = change in output

The equation says that if you want to succeed in solving a difficult problem, then you must study the system so that you can find the high leverage points that will turn your limited amount of change force into enough change to solve the problem. If the equation is true then no other way will work.

Note that pushing on the wrong leverage point will cause the wrong change. So the quality (correctness and efficiency) of the leverage point equates to the quality of the change. Garbage in, garbage out. Quality in, quality out.

Leverage points can generally be found in four different locations in the value chain system Viz. Economic structure, Social structures, Economic incentives, Social incentives.

From above discussion, the leverage point can be identified by understanding the system dynamics, it may be the weakest actor in the chain or a difficult point which can make a grater changes in output, that may be economic and social structures/incentives. Is there any statistical tool or optimization model with the help of which, leverage can be calculated. Like change in output / change in input . In a value chain analysis entire chain and network starting from input supply to the output reaches to final consumer is to be considered, which make us difficult to quantity leverage at each unit operation or actor level. Thanks Drs Dipesh, Kwamina and Lakhwinder Kaur for your kind answer.