The Compound Effect: How tiny actions lead to huge results

We’re often told about the power of compound interest in our finances: basically, where ongoing small actions have a huge effect in the long term. But what if the same principle applied equally to our lives and businesses? That’s the premise of the popular business book, The Compound Effect, by Darren Hardy. In short, the compound effect is all about reaping significant rewards from a series of small, smart choices.

The changes are so subtle they are almost imperceptible. They offer no big win or ‘boom’ moment. But you have to play the long game. As Hardy points out, eating 100 fewer calories per day for an entire year would cause you to lose 5kg. Spending 30 minutes reading each day for a year could lead to dramatic self-improvement and new ideas.

Problem is, most people get tripped up by the simplicity of the compound effect. They quit running after Day 8 because they’re still overweight. They stop contributing to their retirement savings because they could use the cash better today. They look for a new business strategy because they’re not seeing an immediate impact on the current business venture or the bottom line.?

For me, one of the most rewarding examples of the compound effect is the contribution of our IT and business specialist resources in aYo, who work tirelessly behind the scenes for their customers, both internal and external. This team isn’t bringing a new app to market every month. But what they are doing is incrementally improving the back-end and business models that supports a growing micro-insurance customer base across the African continent each and every day. A nip here. A tuck there. And when you look again after a year, suddenly the business has a more robust platform than ever before, with a host of small changes that have made it easier for more than 12 million financially vulnerable customers to access the type of cover that keeps them safe from illness and injury.

The real beauty of the compound effect is the ripple effect a small change has on other parts of the business. A better customer experience means it’s easier for ordinary people to understand, which means more customers. More customers getting their claims sorted quickly and painlessly means a better perception of insurance in general. Which means greater financial inclusion across our continent.

Never under-estimate the power of showing up and doing small things that matter every day. As Hardy says: Small smart choices + consistency + time = radical difference. A toast to the everyday mundane!

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