Book Summary – The Compound Effect

Reading Time: 9 Minutes

Post By Anna Thiele, Deliberate Directions Leadership Strategist

Anna focuses on writing website content and hosting a “Leadership, No Homework” book club. Anna received her Bachelor of Arts in Communication, with a certificate in Leadership and Human Resources, from Boise State University. In her spare time, Anna enjoys rock climbing, traveling, music, and the Enneagram.

The author of The Compound Effect, Darren Hardy, is a mentor to CEOs and high-achievers. Owning his own company at eighteen years old, growing it to six figures within one year, and still managing to maintain growth, he has a philosophy worth paying attention to; be the exception. He believes that his upbringing taught him all the skills that have led him to succeed. Everything he learned in life thus far, he contributes to an equation that looks like this:

Small Choices + Consistency + Time = Radical Differences

This equation can work towards a persons’ benefit or demise if misused. Small choices over a long duration of time indeed produce results. Using the example of the magic penny, a person can achieve incredible wealth in just thirty days, starting with a simple penny. Consider another angle presented in Hardy’s book, an individual slowly giving in to poor choices. At first, it starts with a good choice of cooking at home. The poor minor choice is finding recipes that include a considerable amount of unhealthy fats and ingredients. The ingredients seem harmless at first, but as they continue to be a part of their diet, life satisfaction declines. Hardy notes this individual’s lack of sleep, a decline in work performance, inattention to their spouse, etc. All from the simple poor choice of not watching their diet. To work towards radical differences that create positive life changes, think of the equation like this:

Small (smart) Choices + Consistency + Time = Radical Differences

Notice the addition of “smart” to the equation. Hardy uses the compound effect for positive and intelligent changes because it works in both directions. While this equation is simple, it does not make it less essential. As Hardy says, “beware of neglecting the simple things that make the big things in your life possible.” Hardy uses five skills to enact radical positive differences in a person’s life through choices, habits, momentum, influence, and acceleration.

Choices

Hardy believes that the key to success is trying for it each day by learning, growing, being challenged, etc. Once a person begins to sleepwalk through their day, the opportunity to be high-jacked by others’ intentions increases. To be the exception, a person has to choose to be 100 percent responsible for their own choices. In with accountability and out with the excuses. Here are a few starting points for choosing to possess life ownership; Gratitude and notepad tracking.

Gratitude

It is easy to point fingers with a “he/she said” type of thing. It is easy to blame a partner for not doing specific tasks, even though doing them would have been easy. It is easy to arrive late and blame traffic rather than leaving home earlier. In each of these situations, we have a choice to make. It is easy to blame other people without self-awareness, which is not healthy for successful relationships. Hardy shares that taking 100 percent personal ownership starts with practicing gratitude. He spent a couple of minutes each day for 365 days, writing down qualities and positive affirmations for his wife; a ‘thanks-giving’ journal. By the end of the year, he and his wife had an exponentially better relationship, and Hardy was able to begin thanking his wife rather than blaming her. A highlight of this journal is sharing gratitude with others. It is not about getting lucky; it is about recognizing the luck that already graces each day.

Preparation (personal growth) + attitude (belief and mindset) + Opportunity (natural occurrence) + Action = Luck

Notepad Tracking

Consider an area of life where you desire success, and notice where you want to be. Now, notice where you are. Keep those two things in the forefront of your mind. Next, discover or bring to attention your motivation for achieving success. Hardy suggests that in order to achieve that success, you obsess. Marry a notepad and share everything on its pages, creating an undeniable awareness of your unconscious decisions. Also, tracking helps lessen impulsivity, reducing the number of dates needed to track your behavior. Track for one week, then after one, try one more. Finally, try for a fourth week. Hardy believes that after three weeks of tracking, you will begin to crave these dates, which is when small positive changes begin to occur. Nothing worthy of a trophy or public applause, but given time, you will be blown away by the results. “Practice makes them [choices] permanent” – Darren Hardy. It is never too late to start something, but the earlier done, the more power the impact has.

Habits

A person can unconsciously dedicate hours, days, or years to habits, so it shouldn’t be a shock when it takes time and effort to unwind and create new habits that serve them better. As already noted, the first step in doing this is to track certain behaviors and become aware of what to change. Once you can visualize just where a fix is needed, determine your motivation for changing that behavior. Then, we can talk about some changes to either eliminate or install habits that guide you to reaching your goals.

Goals

Build a life plan that revolves around where you want a change. If you make goals that look pretty but do not align with where you want your life to lead or with your values, you will certainly be unhappy. When thinking about what motivates you to achieve your goals, run free. Do not restrict a goal to nobility. Anything goes if it is within legality and personal moral code. Think about every aspect of life to set goals for, not limiting yourself to the more common areas of finances and profession. Use this formula when creating goals.

You (your choices) + Behavior + Habits (compounded) = Your Goal

An excellent book for better understanding how behavior impacts habit is, The Power of Habit by Charles Duhigg.

Game Changes

Keep it simple, what are your top three goals? Looking at those goals, write an unlimited number of ways your habits sabotage progress (eliminate) and an unlimited number of habits needed to adapt to reach those goals (install).

Eliminate

Identify triggers from one of the big four; who, what, when, where. Clean house, literally. If it is not in your sphere of influence, you will not be thinking about it nearly as much. Swap it or alter a habit to make it not as harmful. A person can either ease in or jump in. Some need time to say goodbye to their habits, while others have improved by immediately cutting out bad habits.

Vice Check

Everyone has a habit that is not great, but if done in moderation, they are not receiving much harm (a bowl of ice cream, once in a while). More often, a certain behavior can kick a person’s brain neurons to go down a particular brain groove or neural signature. This attention to a specific unfavorable brain groove creates a nasty habit. Hardy suggests doing a vice check every six months to control habits, not the other way around. Take a month off from the habit, and if it is easy to refrain from, you are still in the driver’s seat. Otherwise, consider adding it to the list of habits to eliminate.

Install

Set up for success by finding habits that already work into a schedule and routine that exists. Think about how the new habit adds to life, not how the subtraction can deprive. Advertise a PDA (public display of accountability) and tell the world! Find someone who can share in accomplishments and vice versa. Make it a competition and create some comradery. Lastly, celebrate.

Do not be afraid to fully embody these goals by becoming the person who uses this habit naturally and easily. It can help shift a person’s mindset to be more willing to achieve and get after these goals.

Momentum

Hardy believes in the power of momentum. Once a person can get past the resistance and create incredible routines and rhythms, momentum works in powerful ways. Working like this, a person makes a choice, puts that choice to work, repeats, builds routines and rhythms, and stays consistent. Results naturally come.

Routine

Routines allow a person to have a system of execution. The brain naturally works to do things that have the least resistance. So, creating routines creates patterns in the brain that allow tasks to be done with little thinking – so the brain can focus on solving big problems. Hardy brings up a good point that it is impossible to predict what will happen each day, which is why we should bookend our days. We should create routines, around our goals, for the start and end of each day. The rest of the day will happen, but we have to prepare ourselves for what we can control. Hardy makes gratitude and self-improvement a must for each of his goals. In his morning and evening routines, he has incorporated a way to share gratitude and listen/read/absorb from other leaders inside or outside his sphere of acquaintances.

Hardy finds rhythms that will last for the rest of his life. He believes that a person should find a program that can be done with no renegotiation later. A good base rhythm can make for a fantastic foundation. Remember, the compound effect is about small efforts that, over time, compound to big wins.

Consistency

Routines and rhythms make for great keystone habits, but not without consistency. Think of a water well pump. After beginning to pump, it can be difficult for the water to come through the spout. However, once it gets going, there is a steady stream of water. When the pump stops movement, the water stops coming. Unfortunately, if you realize not enough water was gathered, you will have to start that agonizing process all over again. Think of goals, rhythms, and routines in this way.

Influence

Information from a phone, tv, or surroundings has the power to influence anyone, for better or worse. Hardy encourages the reader to think about those influences, evaluate them, and pick and choose what we receive. It often looks like cutting people or channels out that do not serve you and replacing them with curated information. It is like trying to fight for every civil-rights and protest movement in 2022; the reality is it is impossible. Instead, let the niche anti-whaling passionate residents focus on that, and you focus on your passion. Instead of watching every broad news outlet, be passionate and educated on specific subjects of interest.

Associations

A person is the average of the five people they surround themselves with the most. Hardy shares an activity to visualize others’ influence on you. Separate a paper into three columns, and in each column, write five names of people that fit the theme. The first column is with whom you spend the most time in your professional life. The second column is with whom you spend the most time in your personal life. Finally, the third column is for the acquaintances who most influence your life. The next task is to evaluate and assess each name. Is everyone on the list congruent with your goals? If they are not congruent, strike their name and replace them with someone congruent with your goals. If you experience resistance from others as you limit associations, there may be resistance. Unfortunately, their resistance is not about you but their fear and lack in their own life. Perhaps in a column is a person valued for three minutes of their time, but not three hours. In evaluating, determine if that relationship nurtures or starves, then move forward accordingly.

Expanded Associations

When a person begins to strike names and add them, they may have to think outside of their sphere of influence to add positive names, and they may be people not acquainted well with. A way to focus on people you would want to add, consider a peak performance partner, mentorship, and develop a personal board of advisors. A peak performance partner is someone you can trust to tell you the hard truth and to challenge you often. People love sharing their success; it pays to find a mentor in the area you most want to succeed. A more significant, diverse mentorship is a board of personal advisors. It allows for several different perspectives without exhausting one person’s advice. If you do not know them but want their advice, shoot your shot and give them a call.

Environment

If you end up giving someone a call whom you do not know, you have already worked towards expanding your environment and have gotten out of your comfort zone. Hardy suggests seeing something new and putting your perspective somewhere it has not been. “Dreams may be bigger than where you are; you’ll need to expand yourself” – Darren Hardy. Furthermore, always stay creative with your time. Turn your vehicle into a mobile classroom through CDs, audiobooks, or educational podcasts if you drive often.

Acceleration

“Do you push through the pain or crack like a walnut?” – Darren Hardy

Unordinary

The mentality for most is to give up when things get complicated. However, these are the moments to keep pushing through using the compound effect. Hitting the wall is not an obstacle; it is an opportunity. Think about it, when things are great, they are great for everyone else. The demanding moments when no one is acting is when you should act and push through (potentially suffering). It is essential to go past the expectations every time a challenge arises, even just by a little. Find the one expectation and exceed it, doing more than expected in every area of your life.

Conclusion

What small action can you take today to kickstart your future’s success? Start small, set a goal, track your behaviors, stay consistent, and watch the compound effect start in motion. Happy tracking and may the riches flow!

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