I recently listened to a book called “Atomic Habits” by James Clear. The main idea is identifying and managing bad and good habits. Beyond the interesting topic, what caught my attention was the power of compound interest and setting systems vs. goals.
Systems vs. goals – the author notes that people set goals of who they want to be or where they want to be first by seeing the end result. This could be a James Bond lifestyle from the movies or a house in a wealthy neighborhood, certain career, etc. Then they design a path to it whether that is a certain college degree leading to lucrative career or nightly guitar practices leading to a record studio. Many fail. I refer to this as birth by infatuation and death by lack of consistency.
Systems here refer to a combination of strategy, tactics and repeatability or consistency. Many fail because they lack consistency and following through with the strategic and tactical steps they originally planned. This highly applies to businesses that hold annual strategic sessions (and there are plenty who do not...) to create wish lists of what needs or desired to be done but not the processes or systems measuring progress and consistency over time. Many businesses don’t even delineate between long-term goals and short-term ones. Even more do not understand the difference between the company’s mission and vision.
“Atomic Habits” talks about creating systems and routines that would drive achievement of set goals. I first came across such systems by uncovering Danaher’s Business System (“DBS”). This is one of the most powerful tools/frameworks out there that helps setting goals and systems driving performance over time. Tip of a hat to @Wade Trip for introducing me to it some years back!
Another straw of wisdom from the book was the power of compound interest. We all heard Warren Buffett praising it repeatedly. I think it has been overused so much that we started to forget how valuable and cross-disciplinary it is. The core of it is following through the tactical and strategic steps and activities that you planned at that annual strategic retreat with your management teams.
To make it clearer, imagine you go to the gym 4 times per week. You get tired and distracted from time to time and may decide to skip a day or two to recover. The point here is to keep to the schedule of 4 workouts per week. Even if you are not performing at the top of your ability that day, going in and making an effort keeps all the work done prior to that remain and compound over time.
I’m sure you can see how this applies to business. If you’re building a new business, keep on going to the networking events and meet people. If you’re an established business, keep that Tuesday’s 3pm Management Meeting to check-in with everyone and make sure things are getting done and not stalling.
This is the power of setting goals and systems, staying consistent and using the power of compound interest. Don’t postpone the weekly meeting (unless there’s a valid reason… use your own judgement here) because every step will get you closer to the destination you’re after.
Another book I recently picked up from an acquaintance of mine is “Making it Big” by @Mark Moses. Remember I mentioned Danaher’s Business System. Mark took it to the next step by bringing his own experience of strategic thinking, successes and failures to distill what strategic and tactical goals and systems need to be designed to help businesses compete and succeed.
At Assembler Growth Capital we bring years of strategic and tactical hands-on work and experience to the businesses we invest in. DBS and similar systems are what we strive to implement at every business we invest or engage with. One of the Assembler’s executives @Brian Byrne took to the next level by brining decades of strategic war gaming consulting and work performed for very well-known brands across the globe.
-A.G.
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