Small Adjustments, Like Compound Interest, Equal Big Change

Looking before leaping ensures you have a good understanding what lies under the surface. This understanding allows you to make small adjustments to meet conditions and improve success.
-Photo by Lucas Allmann on Pexels.com

As a young man, I was approached by an insurance salesman about the miracle of compound interest. The theory is sound. With a little discipline, a little luck, the right investment vehicle, and the right advisor, saving a little on a regular basis with the compound interest added over a period of time, one ends up with a good-sized bankroll. In an earlier post, I introduced the concept of the ten-minute rule; taking ten minutes each day to dedicate to an activity that will make tremendous improvements in your life. The discipline required to dedicate to ten minutes every day is the same as that for saving. Six Sigma and Total Quality Improvement both tout the importance of making small changes to make products and services better. Do you remember the old adage, “Look before you leap”? Small steps may be a better, safer way to descend from or climb up a mountain.

Change is coming. We all know it. Change is at the very heart of leadership. Without change, there would be no need for leaders. Too often organizations make broad, sweeping changes. We all know that a new broom sweeps clean but how many new brooms can an organization afford to buy, use, store, and maintain? Sometimes sweeping changes are necessary like when a wildfire burns down your whole town, your biggest customer goes bankrupt, or your CFO suddenly resigns to move to his new home in the Caribbean purchased without authorization from your company’s funds. Those kinds of changes are rapid and wide-spread. The stimulus for those kinds of changes are difficult to predict. Good leaders should look to the future in order to make predictions and decisions about the future. With a vision toward the future, leaders develop plans to implement changes preparing for the future. People adapt to smaller changes easier. Smaller changes allow leaders to observe responses before fully committing to bigger changes. Small changes are the little peeks before the big leap.

When implemented well, little changes result in big differences that are not often understood at the time of the change. Small, successive changes help leaders understand if their theory is valid. It is easier to take a few steps down a path to see what lies ahead than to blindly start off only to learn you are going the wrong way. Incremental changes allow us to do just that.

Small decisions frequently make the difference between success and failure. The decision by Stark to attack surprised the British defenders near Bennington, VT. Few recognized the importance of this small engagement at the time it occurred. It became the turning point in the American Revolution.
-Engraving of a painting by Alonzo Chappel – http://digitalgallery.nypl.org/nypldigital/id?808641, Public Domain,

An example of small decisions that lead to big results is the battle that occurred outside Bennington, VT in August 1777. The British were attempting to cut off the New England Colonies from the rest of the rebels. Armies were to march north from New York City and south from Canada. The General in NYC thought he had an opportunity to fix and destroy George Washington’s main army after the isolation plan started. He started moving his army to close with Washington without consulting the army from Canada. British and Colonial forces clashed at Saratoga, NY.

Facing dwindling supplies and seeking a way around the Continentals, the British commander sent a small party towards Bennington. The commander knew the rebels established a base of stores there. Additionally, this course presented a possible route around the opposing forces. Word reached the militia commanders John Stark and Ethan Allen. Both independently sent small detachments to Bennington. Stark found the British forces on a hill west of Bennington and defeated them. After a rapid march from New Hampshire, a soggy night, and a muddy, bloody battle, his men were spent. Instead of pursuing the beaten British, Stark reassembled his men to return to New Hampshire.

About that time, Col Seth Warner showed up with his regiment of Green Mountain Boys. After exchanging information with Stark, they decided to pursue the enemy. Instead of finding a bunch of stragglers, the Green Mountain Boys encountered fresh British troops sent to reinforce those sent to Bennington. Warner had the element of surprise and defeated those reinforcements. This small skirmish was later recognized as the turning point of the Revolutionary War. The war moved south, but the Brits never were able to pin down the Americans to obtain a decisive blow.

Understanding levels of complexity helps leaders make incremental changes that allow them to determine if those changes affect the problem in the desired fashion.
-Cynefin Model from Clear Impact Consulting Group.

If we relook at Cynefin Model of understanding problems, we find that simple problems are the only kind that call for the application of best practices. The others call for examination and exploration in order to determine what practices to apply. Complected, Complex, and Chaotic problems require leaders to analyze situations, probe for causes, or take novel action to gain a sense of the problem. In each case, taking small steps allow leaders to determine if they are moving in the right direction or if they have yet to establish a good understanding of the problem and require a different solution. Even when it seems everything is falling apart, small incremental changes allow leaders to test solutions, looking before they commit fully to a course of action. Yes, the time may be short and leaders may only be able to test one or two possible solutions, but they can determine if those actions will work, or if they need to continue to identify better answers.

The world can be a big, scary place, even with today’s advanced technology. Not all problems and change are easy to anticipate and respond. Leaders who understand the principal of compound interest know that series of small actions help determine if something will work or if they need to look for other solutions before committing to a particular course to deal with change. Small steps taken at the beginning of the problem-solving cycle gives leaders opportunities to look on the other side of the wall before jumping over the wall. As a result, s/he knows whether there is a little ledge or a huge drop off on the other side. Change is ever present. It is the key reason organizations need leaders. Most change is incremental, therefore, so should the leader’s response to change also be incremental. Learning these skills helps leaders make better decisions when rapid change occurs. Do not knuckle under the pressure to make a big decision up front. Find ways to make a series of little decisions when confronting a problem. Doing so puts the power of incremental change to work for you and your organization.

References

Clear Impact Consulting Group (2018). Complexity theory: The cynefin model. Clear Impact Consulting Group. Edmonton, AB.

Friends of the Bennington Battle Monument (N.D.) The battle of Bennington: the turning point of the American revolution. The Battle of Bennington Monument, https://benningtonbattlemonument.com/battle.html. Retrieved 25 August 2021

National Park Service (2018). Burgoyne’s campaign: June-October 1777. Fort Stanwix National Monument. https://www.nps.gov/fost/learn/historyculture/1777-campaign.htm. Retrieved 26 August 2021

(c) 2021 Christopher St. Cyr

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