“Compounding”-Force Multiplier you are missing out on !!

Fantasy One:

Everybody wants to be successful without having to tattoo their eyebrows with sweat beads. If you are like majority of people, here are some of your money making strategies : you want to be born rich, win a lottery, chance upon a treasure map or just somehow have your bank account beep on fortune’s GPS.

You would love to acquire comforts of life quickly, retire fast and then enjoy them as your full time, day job. Prince Charles of UK is your guiding apostle and an abiding role model.

So “born to be a celebrity” is the state where you only make the effort of showing up. World owes you the riches for the grace of your presence. I do not know about you but being a “Natural Celebrity” and having a  “Soul-Mate” are my top two votes for any, human fantasies countdown.

However that we are blindsided by this entitlement narrative is not totally our fault.

Popular media knows our dream manifest and reinforces its validity, incessantly. It obsesses on acknowledged celebrities and their lifestyles thus making it all large and accessible. If one can touch glamour with fingertips, who cares whether it is all tinsel. You are being programmed by the halo effect.

So if a “4 hour work week” success fantasy is global yet apocryphal, can we find another countervailing narrative which is more accurate. Yes of course, and that brings me to the next approach or the “fantasy of hard work or long effort”.

Fantasy Two:

In stark contrast to a celebrity plot-line, this is how typically the” Inner Calling” fantasy plays out. You work diligently for 20 years without realizing it is work. You show up every day, day after day. You keep up with your “work hard ethic” irrespective of indisposed health, inclement weather, indifferent co-workers and then all of a sudden, out of no-where, you get lucky. You get your first big break.

You re-double the efforts, put in double shifts, eat, dream, cream the opportunity and it scales. Since you have perfected the process with a long solitary internship so when the stage and scenery behind you changes, you find yourself arrived. You did not move. You grafted. World around you became a spotlight, to amplify your presence.

John Paul Getty though adds systematic interruption of circadian rhythm, as another element in this “work hard get lucky” formula, when he avers: Rise Early, work hard, strike oil.

So the moral of this fantasy is that unless you are driven and passionate to actualize “an inner calling” the chances of arriving to a large@life are mediocre.

Ground Reality:

Mediocrity then brings us to the default reality where most people, who do not have any abiding “entitlement” or “inner calling” fantasy, actually subsist. It is the terra firma or popular foraging area for the mass of humanity. They show up for work often enough, work just enough to keep continuity of food on the table, go with the tide wherever it is headed and watch the popular soap on the prime time slot in the night. They follow the “work enough ethic” wherein they put in indifferent effort to reap insignificant returns. They undergo what is called a wage slavery, where  life happens to them, largely, outside their work area. Their existence is segregated in compartments of work and pockets of fun as they, minimize the first, maximize the second and hit the bar at 7 clock.

Big Picture of Work-Scope or Effort Vs Reward Dynamic:

So to map the overall human work landscape, there is one sprawling default reality which is occupied by “work enough ethic”. Devoid of a dominant fantasy but highly aspirational, it occupies almost 90% of the area of the people vs effort, bell curve, if that was ever to be plotted.

It is hemmed by two fantasy lands on its either side. On left side is, no work all play meadow with its “entitled jack ethic” which houses roughly 5% of population and on the other side is “work is play” garage with its “hard work ethic”.

To summarize, people play with one of the three strategies when they are working or navigating effort vs reward curve, namely:  1) “entitled jack ethic” 2) “work enough ethic” 3) “work hard ethic”

Why should you play with “Work Hard Ethic (WHE)” Strategy?

Having traversed the landscape of how most people contribute efforts, I want to delve on why “work hard ethic (WHE) ” is better strategy for success and why fantasy of hard work or “long effort” is what you want to actualize in life.

Now choice of strategy that people make, sets up their alignment, with an underlying universal operating principle (UOP).

Universal Operating Principles (UOPs):

To define Universal Operating Principles or UOPs, they are objective, standard laws that govern the structure of the universe. To restate, UOPs are structural laws of universe and govern its dynamic unfolding. Science is all about discovery of various UOPs. Physical laws like conservation of energy or momentum, are UOPs of the natural world. The most celebrated UOP in biosphere is evolution by natural selection.

Now since nothing in universe seems to have a choice, as they are tied with Goldilocks knot, so they are all 100% aligned with their operative UOPs. In other words their strategies are fixed (hard coded) so their UOP based outcomes are foregone. Universe seems to be All In for a sure thing. Event Horizon of a black hole will stand guard and not let matter pass back to the physical world, time will have an entropy vector, life will sequentially seek single-celled to multi-cellular transport.  There are no exceptions to these alignments between elements and their operative UOPs.

With humans and their “choice in actions” (strategies) alignment with UOPs, however becomes a matter of understanding and adherence. If your strategy is good in aligning you with the relevant UOP, your outcome is bumper otherwise the there is always a dumper.

The Universal Operating Principle (UOP) which bears most relevance to the work/effort related outcomes is called The Compounding Effect (CE)

The Compounding Effect (CE):

The Compounding Effect posits that small increments, sustained over an extended period of time, cumulate to create an exponential result. In mathematical terms, it means that the relation between effort and outcome is not linear but exponential.

You can work hard but initially results will not accrue (that being a non linear or a logarithmic relation) however sustained over time, with continued inputs, the outcomes will scale tremendously ( again not related to the little output that you will give then). So till a point you keep working and nothing tangible happens. Then all of a sudden a tipping point is reached and its flood time.

The most popular application of this UOP is in the financial world and Warren Buffet with his forever holding period horizon of any investment, is its most celebrated exponent. He does not care about daily stock movements but has compounded his wealth at the rate of about 30% for a period of 45 years to reach where he is. In other words, by letting go of his today focus, his strategies have become best aligned with the operative UOP of the compounding effect.

However compounding effect, though most heard in terms of its financial application, is pertinent to all human endeavors. In fact life history of all geniuses is a compounding effect testimony.  Also when you examine sundry human events, habits are compounded daily routines, epidemics are compounded infections, chiseled physiques are compounded daily workout sessions , genealogical maps across generations are compounded individuals and if my speculation is correct, universe itself is a compounded fractal.

The 80/20 rule (Pareto principle) or other power laws are also a manifestation of underlying compounding effect.

Dr Andres Ericsson’s mastery rule (popularized by Malcolm Gladwell in his book Outliers) of 10000 hours of deliberate practice leading to expertise in any complex cognitive task, is another manifestation of achieving UOP alignment.

Hard Work Ethic or Long Effort as your Dominant Strategy:

HWE or Long effort ( LE) strategy aligns you perfectly with the compounding effect UOP.

HWE is a strategy which if you choose, has two dimensions: Intensity and Sustenance. You work hard and you work long. As you work diligently and durably, you start to get aligned with the compounding effect UOP. Over time as this rapport gets deeper the compounding effect, starts to manifest and begins to build up your rewards. Then finally when you get a landfall, it is massive.

So formula which captures best, the compounding effect(CE) UOP is :

HWE*TIME = EXPONENTIAL RETURN.

Challenges for HWE (Hard Work Ethic) implementation:

Now if it is that simple and compelling a course, why is that HWE or LE not the universally dominant human strategy. Instead, why does most of the working population end up choosing the “work enough ethic” or “entitled jerk ethic” strategy.

In my view there are three major challenges which contribute to HWE or LE not being the preferred work/effort strategy.

First challenge, as mentioned above is that media reinforces the entitlement fantasy thus indoctrinating misleading information about the nature of the game. We have an availability heuristic (whatever is present is disproportionately compelling) which gets triggered when one is continually fed the same images. So we end up believing the distorted picture of instant fame and give up on long effort or refuse to pay the actual price of success. So we are systematically programmed by mainstream media away from our alignment with the compounding effect UOP.

Second challenges to CE (compounding effect) alignment or adoption of Long Effort strategy, is our cognitive blindness.

Since, all our life, we have been primed to observe causal linear relationships; the exponential relationships do not register naturally on our cognitive schemas. If we have to take cognizance of them we have to make a neo cortical effort. The initial outcomes in any exponential relationship are very small. Since we do not understand their guiding structure (Compounding effect) we are lulled into a wrong belief that we will get small outcomes or no outcomes and then subsequently we adapt to them. We end up resigning to “work enough ethic” because we learn (erroneously) that we will  get only small outcomes and thus define ourselves accordingly. Consequently our long efforts taper off and we fall out of alignment with the compounding effect.  It is a case of learned mediocrity.

If we were to understand that initial small results, inspite of best efforts, is how the universe rewards through its compounding effect, we will be able to contextualize that feedback and can then sustain efforts for long without relinquishing our abundance expectations. With sustained effort as its base compounding is the secret sauce of genius.

Third challenge to CE adoption lies in the duration of the effort. To stay with something for a long period of time, we need to be strongly motivated. Unless we are motivated enough, existential entropy finds a way of tripping us and luring us out of CE alignment. Motivation, as we will soon discuss, is one bird, which is not easy to cage.

In summary, to paraphrase Buffet, the patron saint of all compounders, adoption of Hard Work Ethic (HWE) as your dominant effort strategy, is simple, but never easy.

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