The Compound Effect by Darren Hardy - Book Summary
This is my summary of ‘The Compound Effect’ by Darren Hardy. My notes are informal and tailored to my own interests at the time of reading. They mostly contain quotes from the book as well as some of my own thoughts. I enjoyed this book and would recommend you read it yourself (check it out on Amazon).
The compound effect & its main elements
Definition of the compound effect
Small, smart choices + Consistency + Time = Radical difference.
The compound effect is the principle of reaping huge rewards from a series of small, smart choices. Your only path to success is through a continuum of mundane, unsexy, unexciting, and sometimes difficult daily disciplines compounded over time.
Even though the results are massive, the steps, in the moment, don’t feel significant. The changes are so subtle, they’re almost imperceptible. These small changes offer no immediate result, no big win, no obvious I-told-you-so payoff.
Choices are at the root of every one of your results.
Each choice starts a behavior that over time becomes a habit. Choose poorly, and you just might find yourself back at the drawing board, forced to make new often harder choices. Don’t choose at all, and you’ve made the choice to be the passive receiver of whatever comes your way.
Every decision, no matter how slight, alters the trajectory of your life - whether or not to go to college, whom to marry, to have that last drink before you drive, to indulge in gossip or stay silent, to make one more prospecting call or call it a day, to say I love you or not.
Ask yourself, “How many of my behaviors have I not voted on? What am I doing that I didn’t consciously choose to do, yet continue to do every day?” Your biggest challenge is not that you’ve intentionally been making bad choices. Heck, that would be easy to fix. Your biggest challenge is that you’ve been sleepwalking through your choices. Half the time, you’re not even aware you’re making them. Nobody intends to become obese, go through bankruptcy, or get a divorce, but often (if not always) those consequences are the result of a series of small, poor choices.
For most of us, it’s the frequent, small, and seemingly inconsequential choices that are of grave concern. I’m talking about the decisions you think don’t make any difference at all. Whether they’re bone-headed maneuvers, no-biggie behaviors, or are disguised as positive choices (those are especially insidious), these seemingly insignificant decisions can completely throw you off course because you’re not mindful of them. Supersmall, seemingly inconsequential adjustments can and will revolutionize everything.
Step by step, day by day, your choices will shape your actions until they become habits, where practice makes them permanent. Losing is a habit. So is winning.
Examples:
You inhale a soda and bag of potato chips and suddenly realize only after you polished off the last chip that you blew an entire day of healthy eating - and you weren’t even hungry.
You get caught up and lose two hours watching mindless TV - scratch that, let’s give you some credit and make it an educational documentary - before realizing you spaced on preparing for an important presentation to land a valuable client.
To help you become aware of your choices, I want you to track every action that relates to the area of your life you want to improve.
Awareness and positive behaviors compound. Tracking is my go-to transformation model for everything that ails me. Over the years I’ve tracked what I eat and drink, how much I exercise, how much time I spend improving a skill, my number of sales calls.
Carry around a small notebook, something you’ll keep in your pocket or purse at all times, and a pen. You’re going to write it all down. Every day. Without fail. No excuses, no exceptions.
If you’ve decided you want to get out of debt, you’re going to track every penny you pull from your pocket.
If you’ve decided you want to lose weight, you’re going to track everything you put into your mouth.
If you’ve decided to train for an athletic event, you’re going to track every step you take, every workout you do.
When you start, keep it slow and easy. Just track one habit for one week. Pick the habit that has the greatest control over you; that’s where you’ll start. Once you begin reaping the rewards of the compound effect, you’ll naturally want to introduce this practice into other areas of your life.
Consistency over time is the key to success.
It’s one of the biggest pitfalls for people struggling to achieve. Most people don’t know how to sustain it.
It doesn’t matter how smart you are or aren’t, you need to make up in hard work what you lack in experience, skill, intelligence, or innate ability. If your competitor is smarter, more talented, or experienced, you just need to work three or four times as hard. You can still beat them.
Don’t fool yourself into believing that a mega-successful athlete didn’t live through regular bone-crushing drills and thousands of hours of practice. He got up early to practice - and kept practicing long after all others had stopped. He faced the sheer agony and frustration of the failure, loneliness, hard work, and disappointment it took to become No. 1.
The most challenging aspect of the compound effect is that we have to keep working away for a while, consistently and efficiently, before we can begin to see the payoff. Get rid of your “insta-results” expectation. Avoid this type of mistake:
They quit after the 8th day of running because they’re still overweight.
They stop practicing the piano after six months because they haven’t mastered anything other than “Chopsticks.”
They stop making contributions to the IRA after a few years because they could use the cash - and it doesn’t seem to be adding up to much anyway.
“You will never change your life until you change something you do daily. The secret of your success is found in your daily routine.” - John C. Maxwell.
When you start thinking about slacking off on your routines and rhythms, consider the massive cost of inconsistency. It is not the loss of the single action and tiny results it creates; it is the utter collapse and loss of momentum your entire progress will suffer.
Why-power: You’ve got to want something, and know why you want it, or you’ll end up giving up too easily.
Your choices are only meaningful when you connect them to your desires and dreams. The wisest and most motivating choices are the ones aligned with that which you identify as your purpose, your core self, and your highest values.
When the reason is big enough, you will be willing to perform almost any HOW. The power of your why is what gets you to stick through the grueling, mundane, and laborious.
Your WHY must be something that is fantastically motivating - to you. You’ve got to want to get up and go, go, go, go - for years!
Look beyond the motivation of monetary and material goals. Even if you acquire the shiny object(s), you won’t capture the real prize - happiness and fulfillment.
The access point to your why-power is through your core values, which define both who you are and what you stand for.
If you haven’t already clearly defined your values, you may find yourself making choices that conflict with what you want.
When your actions conflict with your values, you’ll end up unhappy, frustrated and despondent.
Decision making is easier when you are certain of your core values. When faced with a choice, ask yourself, “Does this align with my core values?” If it does, do it. If not, don’t, and don’t look back.
Example:
If I was to put a ten-inch-wide, thirty-foot-long plank on the ground and say, “If you walk the length of the plank, I’ll give you 20 dollars,” would you do it? Of course, it’s an easy 20 bucks.
But what if I took that same plank and made a roof-top “bridge” between two 100-story buildings? That same 20 dollars for walking the 30-foot plank no longer looks desirable or even possible, does it? You’d look at me and say, “Not on your life.”
However, if your child was on the opposite building, and that building was on fire, would you walk the length of the plank to save him? Without question and immediately - you’d do it, 20 dollars or not.
Goals - you need to know where you are going.
The compound effect is always working, and it will always take you somewhere. The question is, where? You must know where you want to go. What goals, dreams, and destinations do you desire? Something almost magical happens when you organize and focus your creative power on a well-defined target.
When most people set out to achieve new goals, they ask, “Okay, I have my goal; now what do I need to do to get it?” It’s not a bad question, but it’s not the first question that needs to be addressed either. The question we should be asking ourselves is: “Who do I need to become?”
Influences - your choices, behaviors, and habits are influenced by powerful external forces.
You’ll need to understand and govern these influences so they will support rather than derail you.
There are 3 kinds of influences:
Input: what you feed your mind.
Associations: the people with whom you spend time.
Environment: your surroundings.
Input.
Garbage in, garbage out.
Example: I don’t watch or listen to any news and I don’t read any newspapers or news magazines. 99% of all news has no bearing on my personal life or my personal goals, dreams and ambitions anyway. I have set up a few RSS feeds identifying the news and industry updates that do pertain to my direct interests and goals. I get the most productive information I need when I need it, in less than 15 minutes a day.
Associations.
The people with whom you habitually associate are called your “reference group.” Your reference group determines as much as 95% of your success or failure in life.
Who do you spend the most time with? Who are the people you most admire? Are those two groups of people exactly the same? If not, why not?
Jim Rohn taught me that we become the combined average of the five people we hang around the most.
The people with whom we spend our time determine what conversations dominate our attention, and to which attitudes and opinions we are regularly exposed.
Eventually, we start to eat what they eat, talk like they talk, read what they read, think like they think, watch what they watch, treat people how they treat them, even dress like they dress.
More often than not, we are completely unaware of the similarities between us and our circle of five.
The best way to increase your potential for whatever traits you desire is to spend the majority of your time with people who already possess those traits. The behaviors and attitudes which helped them acquire the success you admire will begin to become part of your daily routine.
Remove people. There are some people you might need to break away from completely. Determine the quality of life you want to have, and then surround yourself with the people who represent and support that vision. I’m constantly weeding out people who refuse to grow and live positively.
Add people.
Identify people who have positive qualities in the areas of life where you want to improve - people with the financial and business success you desire, the parenting skills you want, the relationships you yearn for, the lifestyle you love.
Befriend the person you think is the biggest, baddest, most successful person in your field. What do they read? Where do they go for lunch?
Spend more time with these people. Join organizations and businesses, health clubs, networking groups, toastmasters, charity organizations, symphonies, country clubs, etc. where these people gather and make friends.
You can have almost any mentor you want, if they have gathered their best thoughts, stories, and ideas into books, articles or podcasts.
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Principles to keep in mind when you apply the compound effect
Behaviors never lie.
If there’s a discrepancy between what you say and what you do, I’m going to believe what you do every time.
Look at the list of bad habits you do. That’s the truth about who you are. Now you get to decide whether that’s okay, or if you want to change.
Examples:
If you say self-improvement is a priority, but you spend more time with your Xbox than at the library, I’m believing the Xbox.
If you say you’re a dedicated professional, but you show up late and unprepared, your behavior rats you out every time.
You say your family is your top priority, but if they don’t appear on your busy calendar, they aren’t, really.
Change is hard - embrace the suck.
There is one thing that 99% of “failures” and “successful” folks have in common - they all hate doing the same things. The difference is successful people do them anyway.
If it’s hard, awkward, or tedious, so be it. Just do it.
“The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge.” - Dr Martin Luther King Jr.
You set yourself up for failure by doing too much too soon.
When people get started in a new behavior, they almost always overdo it. Of course, I want you to feel excited about setting up a rhythm for success, but you need to find a program that you can absolutely, positively do in the long term without renegotiation.
I don’t want you thinking of the rhythms you can do for this week, month, or even the next ninety days; I want you to think about what you can do for the rest of your life.
Most of us lead our lives in fits and starts. Examples:
We start up a routine of making ten prospecting calls a day, strike a little gold, and then shift into neutral.
We get hopped up about our new “date night” routine with our spouse, but in a few weeks, it’s back to Netflix and microwave popcorn on the couch Friday nights.
I see people buy a new book, sign up for a new program or seminar, and go like crazy for a couple of weeks or months. Then they stop and end up right back where they started.
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‘The Compound Effect’ also covered more insightful topics. You’ll find them below in alphabetical order.
Bias for action
Suppose you’ve always wanted to play the piano, but feel it’s too late because you’re about to turn forty. If you start now, by the time you’re retirement age, you could be a master, as you’ll have been playing for 25 years. The key is to start NOW.
Extreme Ownership
I always took 100% responsibility for everything I experienced - completely owning all of my choices and all the ways I responded to whatever happened to me.
Avoid finger pointing, victimhood, blaming, and expecting someone else to solve your problems. You alone are responsible for what you do, don’t do, or how you respond to what’s done to you.
If you’ve ever blamed traffic for being late, or decided you are in a bad mood because of something your kid, spouse, or co-worker did, you’re not taking 100% personal responsibility. You arrived late because the printer was busy? Maybe you shouldn’t have waited until the last minute. Co-worker messed up the presentation? Shouldn’t you have double-checked yourself before delivering it? Not getting along with your unreasonable teen? There are countless fantastic books and classes to help you learn how to deal.
Feedback
Questions you can ask others to get feedback:
What do you think my strengths are?
In what areas do you think I can improve?
Where do you think I sabotage myself?
What’s one thing I can stop doing that would benefit me the most?
What’s the one thing I should start doing?
Asking for feedback:
Never ask advice of someone with whom you wouldn’t want to trade places.
Gratitude
Thanks Giving journal:
One Thanksgiving, I decided to keep a Thanks Giving journal for my wife. Every day for an entire year I logged at least one thing I appreciated about her - the way she interacted with her friends, how she cared for our dogs, the fresh bed she prepared, a succulent meal she whipped up, or the beautiful way she styled her hair that day - whatever.
I looked for the things my wife was doing that touched me, or revealed attributes, characteristics, or qualities I appreciated. I wrote them all down secretly for the entire year. By the end of the year, I’d filled an entire journal.
The funny thing was that the person most affected by this gift was me. All that journaling forced me to focus on my wife’s positive aspects. I was consciously looking for all the things she was doing “right.” That heartfelt focus overwhelmed anything I might have otherwise complained about. I fell deeply in love with her all over again (maybe even more than ever, as I was seeing subtleties in her nature and behavior instead of her more obvious qualities). My appreciation, gratitude, and intention to find the best in her was something I held in my heart and eyes each day.
Habits
Merriam-Webster defines habit this way: “An acquired mode of behavior that has become nearly or completely involuntary.”
If you eat healthfully, you’ve likely built habits around the food you buy and what you order at restaurants. If you’re fit, it’s probably because you work out regularly. If you’re successful in a sales job, it’s probably because your habits of mental preparation and positive self-talk enable you to stay optimistic in the face of rejection.
I’ve met with many great achievers, CEOs and “superstars” and they all share one common trait - they all have good habits. A daily routine built on good habits is the difference that separates the most successful amongst us from everyone else.
Example: Larry Bird was one of the most consistent free-throw shooters in the history of the NBA. Growing up, his habit was to practice 500 free-throw shots every morning before school.
On changing habits:
The payoff or instant gratification derived from bad habits often far outweighs what’s going on in your rational mind concerning long-term consequences.
Think about what you can add in, not take out. Instead of saying “I want to stop watching TV for 3 hours a day” ask yourself what you would want to do with 3 hours of free time if you had it. Then focus on this.
Creating new habits will take time. Be patient with yourself. If you fall off the wagon, brush yourself off (not beat yourself up) and get back on. No problem. We all stumble.
Strategies for changing habits:
Identify your triggers. Look at your list of bad habits. For each one you’ve written down, identify what triggers it. Figure out “the big 4’s” - the who, the what, the where, and the when underlying each behavior. For example:
Are you more likely to drink when you’re with certain people?
Is there a particular time of day when you just have to have something sweet?
What emotions tend to provoke your worst habits - stress, fatigue, anger, nervousness, boredom?
When do you experience those emotions? Who are you with, where are you, or what are you doing?
Clean house. Get rid of whatever enables your bad habits. Examples:
If you want to stop drinking alcohol, remove every drop of it from your house. Get rid of the glasses, any fancy utensils or doodads you use when you drink, and those decorative olives, too.
If you’re trying to curb your spending, take an evening and cancel every catalogue or retail offer that flies in through your mailbox or your inbox, so you won’t even need to muster the discipline to walk it from the front door to the recycle bin.
If you want to eat more healthfully, clean your cupboards of all the crap, and stop buying the junk food.
Swap it. Look at your list of bad habits. How can you alter them so that they’re not as harmful? Can you replace them with healthier habits or drop-kick them altogether? Examples:
I love something sweet. If there is ice cream in the house, the something sweet turns into a triple-scoop banana split with all the fixings (1255 calories). Instead, I replace that bad habit with two Hershey’s kisses (50 calories).
My sister-in-law started a habit of eating crunchy and salty junk food when she watched TV. She’d crunch through a whole bag of tortilla chips with little actual awareness. Then she realized that what she really enjoyed was the crunchy sensation in her mouth. She decided to replace her bad habit with crunching on carrot and celery sticks, and raw broccoli spears.
A guy who used to work for me had a habit of drinking eight to ten Diet cokes a day. I suggested he replace them with low-sodium, carbonated water, adding fresh lemon, lime or oranges. He did this for about a month before realizing he didn’t need the carbonation at all, and switched to just plain water.
Learning
The great aim of education is not knowledge but action. (Herbert Spencer)
You don’t need to learn anything more. If all we needed was more information, everyone with an internet connection would live in a mansion, have abs of steel, and be blissfully happy. New or more information is not what you need - a new plan of action is.
Mentorship
The most successful people are the ones willing to hire and pay for the best coaches and trainers there are. Harvey Mackey told me: “I have had twenty coaches, if you can believe it. I have a speech coach, I have a writing coach, I have a humor coach, I’ve got a language coach, and on and on.”
Shared accountability
I have what I call a “Peak-performance partner.” Every Friday at 11am sharp, we have a 30-min call during which we trade our wins, losses, fixes, ah-has, and solicit the needed feedback and hold each other accountable.
This person should be someone you trust, someone bold enough to tell you what they really think about you, your attitudes, and performance. The point is to get (and give) an unbiased, honest, outside perspective.
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