From the Archive: The Compound Effect

While reading I recently encountered an idea called the principle of compound effect. The basic concept is that small but consistent habits and incremental changes add up to pay big dividends over time.

For example, putting a dollar a day into a mutual fund might not seem like a big investment. But over time, the accumulated deposits and their interest will add up to something exponentially greater than the initial investment itself.

From my experience, this principle isn’t just limited to the realm of finances or business practices. It applies to every area of life. Your work ethic. Your relationships. Your personal development. Even your walk with God.

Most people tend to take the approach of trying to make large, periodic investments in order to initiate growth in these areas. And usually because they have fallen behind. You get behind on your work, so you wake up every morning at four for a week to get caught up. Your marriage is struggling, so you go to a conference. You feel distant from God, so you rededicate your life.

Sometimes it’s necessary to do these things. But rather than having to periodically overhaul your life to make up for deficiencies, adopting the smallest daily habits might be the best path towards excellence and long-term sustainable growth. Anyone can put in a lot of work for a short amount of time to get their game back up to par. But the people who do this usually slip afterwards because they did not learn to do the small things that could have kept them up to par and moving forward the whole time.

I’ve recently challenged my staff to begin improving their areas of responsibility by just one percent every day. To be one percent better in their communication. Their efficiency. Their performance. And to then in turn challenge the people they lead to do the same.

One percent is manageable, identifiable, and attainable. And it’s a daily increase and deposit that over time will take our church to an exponentially greater level than the work we’re putting in to get there. And without us ever losing a step and having to make up ground.

In your own life, imagine what would happen if you committed to improving yourself by one percent a day every day for the next year. If you committed to improving your parenting abilities. Or the way you love and honor your spouse. Or your eating habits. Or your spiritual disciplines.

Nothing would be drastically different initially. But a year from now you would discover that you would be a completely new person.

And that’s because it’s often the smallest things done consistently that have the greatest potential to change everything.

Originally posted August 12, 2010