The Compound Effect in a Nutshell

One of the ways Darren Hardy defines the Compound Effect:

“It’s the principle of reaping huge rewards from a series of small, smart choices. Success is earned in the moment to moment decisions that in themselves make no visible difference whatsoever, but the accumulated compounding effect is profound.”

Basically it’s leveraging small actions over a long period of time. The small almost insignificant actions compound or add up to a large outcome over time. The key element is here is time.

How do you setup and use the compound effect?

Basically Darren suggests using different exercises (see link later in the post) to translate an ideal outcome into small actions you can take consistently over time.

Listen to the full podcast episode:

Don’t mistake this with goals.

Goals are powerful sure however they have been co-opted by corporations and idealized by businesses as a way to leverage employees to get stuff done they might not otherwise. In that way the Compound Effect is no different except the beauty is in the habits.

The Power of Habits

Habits are like human algos designed to be triggered by certain events like music, time of day, something you eat or place you go and are different for each person. In that sense, habits are idiosyncratic. What you do is up to you to figure out. The more quirky your habit (think personally fun and who cares what the world thinks) the more it’s a part of you and the easier to maintain over time.

If quirky seems forced, do something uber simple. The point is what you use for the habit trigger and formation are what makes sense to you.

Sure it takes some willpower to get habits going but once they are in place it’s an automatic event you can count on. You need the automation while you focus some energy on patience the other critical key to leveraging the power behind the compound effect.

The Need for Patience

You need considerable patience and faith in the longer term outcome. Think of someone writing a book. The average time for writing a novel is hard to pin down but one panel of authors came up with four to ten years.

Regardless of the average time it takes to actually write a novel most consider it a long time. That’s the type of time we are talking about, novel writing time. It seems like with the compound effect you need a similar amount of faith in the outcome because guess what? Any results for your efforts might not show up for years.

This is a critical expectation reset: results for your efforts might not show up for years.

Darren uses the story of three different people who are the same age all having a family. One practices no real change in their life, one practices really small daily changes (example: listening to a podcast), and the other small changes to have more fun (example: drinking after dinner).

The story goes on to show of course that the person who just did small good changes was much better off then the person who did small bad changes. What’s surprising is the amount of time it took to see any measurable outward changes.

“At about month 25, we start seeing really measurable, visible differences. At month 27, we see an expansive difference. And, by month 31, the change is startling.”

A couple of years to see any noticable changes!! You have to be dedicated and patient to see the Compound Effect work for you.

“the person who uses the positive nature of the Compound Effect appears to be an “overnight success.” In reality, his or her profound success was the result of small, smart choices, completed consistently over time…Your only path to success is through a continuum of mundane, unsexy, unexciting, and sometimes difficult daily disciplines compounded over time.”

Mundane. Unsexy. Unexciting. Difficult.

These aren’t popular. Most don’t want any of them. Yet conquering 80% of the core of any skill usually comes down to just a few core elements rather than shooting for 100% (see Tim Ferriss and the Four Hour Chef).

A huge tripping point is not developing consistent automatic habits so that you aren’t having to rely on willpower alone to get to enough time for your efforts to show results.

Let’s face it, a lot of people are likely to give up on a consistent action if they don’t see results after a year.

So do you chalk up the compound effect to being similar to the 10,000 hours rule? A really cool idea but not as practically useful in this day and age as the 20 hour rule?

Maybe and obviously that’s up to you however I think the key is in adding a lot more emphasis upon cultivating patience in addition to whatever you are compounding towards.

Here is what I mean.

Let’s say you decide you want to start using video because it’s all the rage in reaching a niche audience. So you decide to do something like a 30 day video challenge to jump start the process. Yet when you come out of the challenge you feel like there is even more to learn than when you started.

Not to mention your videos still suck. Maybe not as much as before but they still suck.

I tend to think this is all natural. Most skills like video take a huge amount of time to get good at so even though 30 days might seem like awhile, it’s just the beginning. Of course the 30 day video challenge link I gave is a bit different because it centers on a few core video creating habits to get results instead of learning all there is to know about video.

But I am bias because I am running the challenge. Anywho…the point is practicing patience should be automatically applied to any part of the compounding effect process. It may seem obvious but what does that actually mean?

That means alongside whatever you are compounding towards you also want to be listening to people talk about patience such as within the TedTalk playlist here.

Reading about patience with a book (do a search or if you want mostly a kids perspective go here.

Then when you get frustrated about not seeing results step back and look for even the smallest of improvements from your first project (example: video) until now.

It could be anything at all. Even the smallest of details will help you along the road. It might not even be something most will notice but because you are so focused on it, you will notice.

“What’s most interesting about the process to me is that even though the results are massive, the steps, in the moment, don’t feel significant. Whether you are using this strategy for improving your health, relationships, finances or anything else, the changes are so subtle, they’re almost imperceptible.”

Keep track of the start so that you can measure even the smallest of details to help you “see” progress. Then listen to ideas on patience and practice it by slowly adjusting expectations.

The book is written to a business audience so it may turn away people who are tired of motivational, goal oriented style of writing. However you don’t need to read the book to get the core: consistent actions lead to big results over time. Make those actions into habits that help you and you will be surprised by the results. The key is in practicing practical patience so that you get to a tipping point.

Darren created a life formula: “Your life comes down to this formula. Your Choices (decisions) + Behavior (action) + Habit (repeated action) + Compound Effect (Time) = Goals.”

If this makes sense to you, commit to smaller actions over time. Establish a habit around those smaller actions and then mix in regular doses of learning and practicing patience.

Check out the resources page on Darren Hardy’s website for downloadable PDF’s exercise sheets to help figure out your own plan.