Business Drivers vs. Levers
I feel like this is a stupid question, but can someone explain the difference? The best explanation I've gotten so far is that "drivers are the numerical inputs that could go into a model" and "levers are the unquantifiable things that you can change, like marketing." I found that a bit confusing and would love for some insight.
I've been at MBB for more than a year and I can't explain this difference any better than what was given. Not sure I agree with the quantitative/qualitative distinction. May be the "pure" definition, but the words aren't really used that way.
In practice, people talk about "drivers" when explaining a cause and "levers" when describing actions that can be taken to effect change.
For instance, delivery trucks that burn a lot of gas could be a major cost driver. Replacing the fleet with more fuel-efficient trucks is a lever the business could pull to realize long-term savings.
So, there is a quantitative/qualitative type aspect here but it's not as relevant as the cause vs. solution distinction.
Great, thanks!
Drivers implies factors that are currently influencing the situation whereas levers are options or opportunities that can change the current state to a future state. For example, print advertisements is the driver for current marketing whereas digital marketing is a lever for improving marketing efficiency.
I'm with bhat, in turnarounds I see Drivers as what got us into the mess and Levers are what I have to work with to fix it. ie. levers in an empty industrial building are very few (call a realtor, delay tax and insurance payments) whereas levers in an operating factory are many; inventory, ship times, AR, AP, wages, reducing costs, raising prices, etc
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