Friday, January 05, 2007

 

The (other) impact of compound interest

I've had the pleasure this week of attending a seminar by Verne Harnish and the folks at Gazelles, who among other things teach a number of business-building best practices known as "The Rockefeller Habits." If you haven't done so yet, please read the book Mastering The Rockefeller Habits. For businesses big and small, young and old, it offers a great many organizational best practices that will make your business more efficient.

Yesterday, Verne talked about many things business owners and executives can do to make their business run more efficiently, and ultimately grow faster. Many of the things he recommends, however, won't have an impact tomorrow. Might not even have an impact next week.

But over time, and collectively, these changes can have a massive impact on your business. Verne compared it to the concept of compound interest on a general savings account. Initially, and over the short-term, you might not see a big change. But over time, those changes compound into something incredible.

Bill Gates, for example, talks about how he uses three screens in his office at Microsoft. The screen on the left is for his email. The middle screen is for the document he's currently reading or working on. The screen on the right is for his Web browser. Bill claims that his desk efficiency has increased by 30-35%, simply by not having to navigate back and forth between windows on his screen so often.

Will that efficiency impact Microsoft tomorrow? Probably not. If you buy two extra screens for your office, will you make more money next week as a result? Probably not. But if you implement this and other small, simple changes to your business, over time they will have a significant impact on your business - in terms of growth and profitability.

Read more about Verne and his "Habits" here.

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