Darren Hardy wrote a great book called The Compound Effect.
The opening lines tell you this is a book about success and what it truly takes to earn it.
In a world where you are bombarded by messages about the quickest ways to get rich, thin, and on top of anything, it can be hard to hear the truth through all the noise.
Darren says the key to success is in harnessing the power of small, everyday choices that compound over time into absolutely incredible accomplishment (or disaster, depending on your choices.)
The compound effect is like gravity in the sense that you can’t stop it, but you can learn to work with it.
What’s most interesting about this process is that, even though the results are massive, these small choices offer little or no immediate result, no big win, and no obvious I-told-you-so payoff.
Given a choice between taking $3 million in cash right now or a single penny that doubles in value every day for 31 days, which would you choose?
If you’ve heard this before, you know the penny gambit is the choice you should go for.
Yet, why is it so hard to believe choosing the penny will result in more money in the end?
Because it takes so long time to see the payoff.
Say you take the hard cash and your friend goes the penny route.
On Day 5, your friend has 16 cents while you are rolling in cash.
On Day 10, it’s $5.12 versus your $3 million.
You’re enjoying the heck out of it, and loving your choice laughing at your friend.
After 20 days, with only 11 days left, your friend has only $5,243.
And that's when the compound effect kicks in.
On Day 31, the same small growth each day makes the penny worth $10,737,418.24, more than three times your $3 million.
"Small, Smart Choices + Consistency + Time = RADICAL DIFFERENCE" - Darren Hardy, The Compound Effect
The primary lesson is consistency over time is important.
Also, starting early is crucial.
Imagine what would happen if you missed the penny deal on Day 1 of the month and only started Day 2, therefore, only had 30 days for it to double.
You would end up with half as much money or a little over $5 million.
Or, imagine what would happen if you started on the tenth day.
You would get just $20,971.52.
The biggest lesson, in case you've missed it, is that it isn’t until Day 30 of this 31-day race that your friend pulls ahead, with $5.3 million.
Day 30!!!
And it isn’t until the very last day of this month that your friend blows you out of the water.
She ends up with $10,737,418.24 compared to your $3 million.
Compounding isn't visible until the very end, be it sport, business or life.
Leadership is the same thing...if you go to the gym, and you work out, and you come back, and you look in the mirror, you will see nothing.
And if you go to the gym the next day, and you come back and you look in the mirror, you will see nothing.
Right?
So clearly, there’s no results, can’t be measured, it must not be effective.
So we quit.
If you believe there’s something there, you commit yourself to the regime, the exercise.
You can screw it up.
You can eat chocolate cake one day, and you can skip a day or two, you know.
It allows for that.
But if you stick with it consistently, I’m not exactly sure what day, but I know you’ll start getting into shape.
It’s not about the events, it’s not about intensity, it’s about consistency.
You go to the dentist twice a year, your teeth will fall out.
You have to brush your teeth every day for two minutes.
What does brushing your teeth twice a day for two minutes do?
Nothing!
Unless you do it every day, twice a day, for two minutes.
Right?
It’s the consistency.
Going to the gym for nine hours does not get you into shape.
Working out every day for 20 minutes gets you into shape.
So the problem is, we treat leadership with intensity.
We have a two-day off-site, we invite a bunch of speakers, we give everybody a certificate, you’re a leader, right?
Those things are like going to the dentist.
They’re very important, they’re good for reminding us or getting us back on track, learning new lessons, but it’s the daily practice of all the monotonous little boring things like brushing your teeth that matter the most.
It’s an accumulation of lots and lots of little things that anyone by themselves is innocuous and useless.
Literally, pointless by themselves.
People will look at little things that are good leadership practices and say “That won’t work,” and you’re absolutely right.
But if you do it consistently, and you do in combination with lots of other little things, like saying good morning to someone, looking them in the eye …"
This is Simon Sinek, nailing the way we love to “fix” problems with intensive eye-catching actions rather than relying on the compound effect.
Isn’t this exactly how so many organizations go about practicing their values?
A quick fix, a blitz of activity and then…nothing.
No follow through.
Intensity is not enough.
Practicing our values is something we need to do every single day.
Quick fixes are the corporate way.
Consistency – keeping those values alive, carrying on doing the small things that matter – is the human way.
"You will never change your life until you change something you do daily. The secret of your success is found in your daily routine.” - Darren Hardy, The Compound Effect
If you ask who is the wealthiest investor of all time, people say Warren Buffett.
People in the financial industry have spent so much time trying to understand how he has done it.
They go into detail about how he thinks about business models, market cycles, and valuations - which are all important topics.
But literally 99 percent of the answer to the question how has he accumulated this much wealth, is just that he’s been a good investor for 80 years.
It’s the time.
And his endurance.
And his longevity.
The math behind 99 percent of his wealth is that it was accumulated after his 50th birthday and 97 percent came after his 65th birthday.
If he had retired at age 60, like a normal person might, no one would’ve ever heard of him.
He would’ve been one of hundreds of people who retired with a couple hundred million.
Warren Buffett didn’t become a household name until the mid-2000s - that’s when the compounding took his net worth to 20 billion, 50 billion, a hundred billion where he is right now.
If you think about how compounding works, it’s always in the extreme end that the numbers start getting ridiculous.
In the beginning, everything is slow and boring.
For 10 years it’s boring.
Year 20 it starts to get pretty cool.
Year 30 and you’re like, wow.
And then year 40, 50, it’s like, damn and it explodes into something incredible.
"It’s not the big things that add up in the end; it’s the hundreds, thousands, or millions of little things that separate the ordinary from the extraordinary." - Darren Hardy, The Compound Effect
When we decide we want something, we often want it really fast.
Pretty much NOW would be the best.
We want to be super fit, super lean, run a marathon, write a book, get our health back, learn a new language, have a successful business, and find the perfect partner.
It is nothing new if I tell you that all this takes time.
And effort.
Each day, we make a multitude of what seem to be “tiny and insignificant” decisions.
However, these decisions compounded over months, years and even decades define the quality and the direction of our life.
Don’t try to fool yourself into believing that mega-successful athletes didn’t live through regular bone-crushing drills, crazy repetitions and thousands of hours of deliberate practice.
They got up early to practice and kept practicing long after all others had stopped.
They faced the sheer frustration of the failure, loneliness and hard work.
James Clear is typing now:
The fate of British Cycling changed one day in 2003.
The organization, which was the governing body for professional cycling in Great Britain, had recently hired Dave Brailsford as its new performance director. At the time, professional cyclists in Great Britain had endured nearly one hundred years of mediocrity. Since 1908, British riders had won just a single gold medal at the Olympic Games, and they had fared even worse in cycling’s biggest race, the Tour de France. In 110 years, no British cyclist had ever won the event.
In fact, the performance of British riders had been so underwhelming that one of the top bike manufacturers in Europe refused to sell bikes to the team because they were afraid that it would hurt sales if other professionals saw the Brits using their gear.
Brailsford had been hired to put British Cycling on a new trajectory. What made him different from previous coaches was his relentless commitment to a strategy that he referred to as “the aggregation of marginal gains,” which was the philosophy of searching for a tiny margin of improvement in everything you do. Brailsford said, “The whole principle came from the idea that if you broke down everything you could think of that goes into riding a bike, and then improve it by 1 percent, you will get a significant increase when you put them all together.”
Brailsford and his coaches began by making small adjustments you might expect from a professional cycling team. They redesigned the bike seats to make them more comfortable and rubbed alcohol on the tires for a better grip. They asked riders to wear electrically heated overshorts to maintain ideal muscle temperature while riding and used biofeedback sensors to monitor how each athlete responded to a particular workout. The team tested various fabrics in a wind tunnel and had their outdoor riders switch to indoor racing suits, which proved to be lighter and more aerodynamic.
But they didn’t stop there. Brailsford and his team continued to find 1 percent improvements in overlooked and unexpected areas. They tested different types of massage gels to see which one led to the fastest muscle recovery. They hired a surgeon to teach each rider the best way to wash their hands to reduce the chances of catching a cold. They determined the type of pillow and mattress that led to the best night’s sleep for each rider. They even painted the inside of the team truck white, which helped them spot little bits of dust that would normally slip by unnoticed but could degrade the performance of the finely tuned bikes.
As these and hundreds of other small improvements accumulated, the results came faster than anyone could have imagined.
Just five years after Brailsford took over, the British Cycling team dominated the road and track cycling events at the 2008 Olympic Games in Beijing, where they won an astounding 60 percent of the gold medals available. Four years later, when the Olympic Games came to London, the Brits raised the bar as they set nine Olympic records and seven world records.
That same year, Bradley Wiggins became the first British cyclist to win the Tour de France. The next year, his teammate Chris Froome won the race, and he would go on to win again in 2015, 2016, and 2017, giving the British team five Tour de France victories in six years.
During the ten-year span from 2007 to 2017, British cyclists won 178 world championships and 66 Olympic or Paralympic gold medals and captured 5 Tour de France victories in what is widely regarded as the most successful run in cycling history.
Have you ever been bitten by an elephant?
How about a mosquito?
It’s the little things in life that will bite you.
Darren Hardy said in his book, "A daily routine built on good habits and disciplines separates the most successful among us from everyone else."
Isn’t it true that what we do daily defines us as a person?
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