Guru Review: The Compound Effect

An interview with Darren Hardy, author of The Compound Effect, an new book about how to jumpstart your life.
November 01, 2011

When your resume includes owning a $50 million company by age 27 and being the publisher and editorial director of magazine called SUCCESS, it's a good bet that you know a thing or two about the subject. Of success, that is.

And when you've spent years interviewing to uncover and share the secrets behind the extraordinary success of countless leading experts on human performance and achievement, top CEOs, revolutionary entrepreneurs, superstar athletes, entertainers and Olympic champions, it probably makes sense to take everything you've learned and write a book.

That's exactly what Darren Hardy, accomplished entrepreneur, publisher and editorial director of SUCCESS magazine, has done. His new book, out today, is The Compound Effect: Jumpstart Your Income, Your Life, Your Success. I had the opportunity to pass a few questions by him.

Q: What's the "Compound Effect"?

A: It is based on the principle that you can reap huge rewards from a series of small, smart choices. In other words, your present reality is the outcome of the little, seemingly innocuous decisions that have added up to your current bank balance, waistline, business success or relationship status. Success or failure is earned through the consistent habit forming practice of making smart choices over time, culminating into what Einstein called the 8th wonder of the world: compound results, or The Compound Effect.

Q: Significant success from lots of very small changes, rather than one big swag, is a theme people are gravitating toward more and more. How does it work?

A: You will remember Newton's First Law, also known as the Law of Inertia: Objects at rest tend to stay at rest unless acted on by an outside force. Objects in motion tend to stay in motion. For most people, it's that first step that's the hardest. To take a step, even a small one, requires someone to come to a decision. The small step is taking action on that decision. Once there is forward motion, even if it is small, breaks the inertia and redirects the trajectory of all steps from that point forward. Then we see one behavior change begets another and the ripple effect continues to compound.

Q: What's the best way to stay focused and consistent in whatever we're trying to do?

A: If I were to boil down the number one trait responsible for any unusual success I have experienced in life, I think it would be this: unyielding and relentless commitment to consistency. It is also the same principle for why the tortoise always beats the hare. It's not how fast you start; it's how long you can remain consistent. I believe it's the biggest reason why people don't end up with the results they want and the life they seek. Most people operate in fits and starts—a great flurry of activity that then flames out. Most people don't have a problem starting. Everybody easily gets excited, joins, signs-up, starts and begins. Millions of people make New Year's resolutions, start diet programs, join gyms, buy personal development books, go to seminars, hire coaches, etc., but their life doesn't change. Because success is not defined by how you start, but by how you continue...over a long period of time.

Q: So how does someone turn all that around?

A: Here are a few ways. First, perform what I call a Public Display of Accountability, PDA. Put yourself in a fish bowl for the whole world to watch, with all the social media available. As a result of the many eyes of scrutiny, you become far more responsible and disciplined. Tell your family. Tell your friends. Tell Facebook and Twitter. Get the word out that there's a new sheriff in town, and you're in charge.

Second, find a "success buddy." There are few things as powerful as two people marching toward the same goal. To up your chances of success, get a buddy, someone who'll keep you accountable as you cement your new habit while you return the favor. You might seek out a success buddy for regular dates at the gym, or to meet to discuss and trade personal development books.

Third, get competition, in a good way. There's nothing like a friendly contest to whet your competitive spirit and immerse yourself in a new habit. VideoPlus, the parent company for SUCCESS, held a step competition using shoe pedometers. Employees organized into teams and competed to see which team could accumulate the most steps. Because of the competition, people who didn't exercise regularly found ways to increase their activity. Yet a month after the competition was over, the step count dropped by more than 60 percent. When the competition was reorganized; it shot right back up. A little competition, it turns out, gets people motivated and nurtures a wonderful sense of community.

Q: Can you talk about the Thanksgiving Journal you did for your wife, and explain how others can use the approach in different areas of their life?

A: I use Thanksgiving to hand write cards to the people I care about and tell them how grateful I am that they are in my life. But when I went to write my wife's card I was having a hard time because of a tiff from earlier that day. Looking past the incident, I focused on all the reasons why I really was grateful for all that she is. This change of perspective immediate changed my feelings for her. That change how I interacted with her the rest of the day. We had a wonderful day and that is when a new idea was born—what if I could do this every day?

From that day I kept a "Thanks Giving" journal for my wife. I looked for the things my wife was doing that touched me, or revealed attributes, characteristics or qualities I appreciated and wrote them all down secretly every day. By the end of that year, I'd filled an entire journal.

When I gave it to her the following Thanksgiving, she cried, calling it the best gift she'd ever received. What was interesting is the gift and process effected me more than her. Because I was consciously looking for all the positive aspects about my wife instead of things I might have otherwise complained about, I saw them and experienced them. The key lesson here is that when you change how you look at a situation, the situation changes. And that means to that it's the viewer who is responsible for the situation.

Q: What is your best advice for breaking a bad habit or developing a new one?

A: Aristotle wrote, "We are what we repeatedly do." A large percent of everything we feel, think, do and achieve is a result of a learned habit. We're born with instincts and develop bad habits over time. The key to breaking habits is awareness. I do this by tracking the behavior I want to change. I learned the power of doing this the hard way, after I'd acted like a colossal idiot about my finances. Back in my early twenties, making money selling real estate, I met with my accountant. "You owe well over $100,000 in taxes," he said. "What?!" I said. "I don't have that kind of cash just lying around."

After explaining that I had foolishly spent all of my money, the accountant gave me two choices. Dig a financial grave or get a grip on my spending. I was advised to keep a running tab on every single cent I spent for 30 days. Keeping a money log brought an instantaneous awareness of the many unconscious choices I was making that resulted in money pouring out of my pockets. I resisted buying some things just so I didn't have to go through the trouble of recording the purchase.

This tracking exercise changed my awareness of how I related to my money. It worked so well, that I've used it many times to change other behaviors. 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, even the improvement of my relationships with family, friends or my spouse. The results have been no less profound than my money-tracking wake-up call.

Q: What's a Rhythm Register, and how does it work?

A: When people get started in a new endeavor, they almost always overdo it. The excitement creates an unrealistic pace toward a goal. What we need is to find a program that can we can absolutely, positively do in the long term without renegotiation.

The "Rhythm Register" is a chart I created that helps keep track of the rhythm of a new behavior. If you want to, for example, drink more water or take more steps each day or acknowledge your spouse more affectionately, you'll want to track it to make sure you're establishing a rhythm while you move toward your goal. In the end, the chart aims to create behaviors that will stay with you for the rest of your life, not just for this week, month, or year.

(Note: You can download a free copy at

Q: So why is it that people who succeed in one thing often fail miserably at something different?

A: Mostly it is because people end up chasing the dreams and value systems defined by society, their peer group or their parents, instead of discovering and living in alignment to their own definition of what's important to them in life. Having to live up to someone else's expectations can become an insatiable obsession that can cause an overemphasis in one area of life—usually financial, status, title, identity pursuits, etc.—to the sacrifice of others...usually relationships, health, contribution, spirituality, etc. Identifying your true core motivation and values is essential to finding passion and life's zest.

Q: How can people set themselves up for more well-rounded success?

A: We often see people who have become successful in one area of life, but are utter disasters in many other areas. Tabloid magazines are full of this kind of drama, with headlines of bitter divorces, drunk-driving arrests, family feuds, racist rants, bulimia, drug rehab, depression and suicide attempts. Many of these same people, the ones many Americans idolize, are some of the most unhappy, insecure and depressed people you will find. Why? Their focus on succeeding in one area of life created a great imbalance with the other areas.

Here is an important distinction, before you build your business plan, build your life plan. Figure out what kind of life you want to have first—where you want to live, what type of people you want to be surrounded by, whether you want to work nights and weekends, whether you want to travel, whether you want to be home for dinner every night, if you want a short commute, what type of environment you want to go to each day, how you want to dress, etc. Then build your business or professional plan around these criteria. Be wary of the price the rest of your life has to pay for the success in one area of your life.

Q: You have strong views on media consumption...can you briefly share and defend them?

A: Our minds operate as simply as a computer. Computers are complex systems, but how they work is rather simple. What you input is what it outputs. It doesn't judge or discriminate; it simply acts on the input. That is also how your mind works. It does not judge or discriminate the information you feed it; it simply acts on the input. I am sure you have heard the axiom "Garbage in, garbage out." This is true for computer programming, and for the information you allow to program your mind.

It's like this, imagine you invited a new friend over for a visit. While preparing the meal they were in the other room talking to your 8-year-old little girl. Now imagine you walked in on the conversation and they had your little girl spellbound with stories, photographs and video images of murder, rape, abuse, scandal, wars, disease threats, impending terror attacks and other such lewdness. What would you do if you saw this? I'm sure you would promptly escort them out and never invite them back right? That visitor is in your home every night talking to your whole family that way...and talking to your own brain that way.

Your brain is as impressionable and susceptible as that of an 8-year-old. Why would you invite someone to feed it with fear, anxiety, terror, worry and helplessness? That is what you do every time you flip on the 6 o'clock news, listen to radio news during your commute, and read through the salacious headlines in newspapers and magazines.

Q: Last question. What's the one thing you want people to take away from The Compound Effect?

A: That too many of us have lost sight of the simple but profound fundamentals of what it takes to be successful, and that we need to go back to, and master, the basic truths and core fundamentals of what it really takes to succeed.