written by
Chris Gardener

Compound Thinking: The Most Powerful Growth Tool You Have

Business Model 3 min read

How many times do you think you’d need to double a £1 coin to reach £1,000,000?

The answer is 20. In fact, if you did that, you’d end up with just over £1,000,000.

Doesn’t sound like much effort, does it? And if you don’t believe me, grab a calculator and multiple the number 2 by itself 20 times. You’ll end up with 1,048,576.

With that in mind, the route from having a single pound coin in your back pocket to becoming a millionaire doesn’t seem that unreachable, does it?

This is what’s known as compounding, and it’s one of the most powerful strategies you can employ with your thinking.

Toppling buildings and growing paper

Getting your head around compounding isn’t easy - particularly when we link it to our thought processes.

That’s why metaphors are so useful. They’re fun, too!

Here’s another one for you. Do you think a single domino could topple a building?

Nah, OF COURSE it couldn’t, right?

Wrong. As demonstrated by Business Insider, if each domino in the chain is larger than the last, the sky really is your limit. It’s why you can go from the push of a tiny domino to the toppling of an entire building.

Ok, one last metaphor. You’ll love this. If you take a piece of paper and fold it 50 times, how thick do you think it’ll end up being? The result will stun you (it did me).

So, you might be asking why not just start with the last doubling? Why not fast-track your way to the last paper fold or hit of the biggest domino?

You can’t, which is the whole point of compounding. That last, massive hit, fold, or leap is only possible because of every other one that preceded it.

With that in mind, imagine what you could do with compound thoughts!

Compounding in business

Short-term thinking versus compounding

I’ve talked a lot about long-term thinking on this blog, but this is the first time I’ve linked it to the word ‘compounding’. However, now we understand what that word means, we can start to apply it to our thoughts.

What’s one of the main barriers you have to thinking long-term?

It’s wanting results NOW, isn’t it? Go on, be honest with yourself; it doesn’t make you any different to anyone - we all want stuff sooner than is realistically possible.

The problem is that, in order to get that ‘thing’ immediately, you’ll have to take ludicrous shortcuts, spend copious amounts of money, or accept that you’ll almost definitely fail entirely. None of those scenarios make for a very nice time as a business owner.

When you instead think long-term by compounding your thoughts, you’ll set a path for that large goal and reach it by hitting every other domino along the way.

So, how do you start compounding your thoughts?

It’s actually pretty easy.

Plan ahead. Break that big project into its constituent elements and lay them out in a logical order. The stuff you’ll need to do at the start will be easy but laborious, but the more consistent your approach, the more the compounding will begin to take affect and the more you can take your foot off the gas.

Don’t stop. Imagine if we removed one of those dominoes from the chain. The entire process would BREAK and that building would never topple.

It’s the exact same thing with your thoughts and plans. If you reach a stage of your thinking that seems impassable, you’ve probably missed something beforehand. Go back and find that missing piece.

Applying compound thinking in the real world

I’m not suggesting this is easy, because it really isn’t. Compound thinking requires an awful lot of determination and consistency.

What’s more, life will get in the way. Unforeseen issues will crop up and knock you off course.

The good news? Compound thinking is absolutely possible. You just need to have a plan to compound and stick to it. And if you need help, we’ve worked out how to do this.

Compounding in business