In the financial world, people use the term compound interest to describe the practice of adding accumulated interest back to the principal sum so that interest is earned on top of interest from that moment on. The power of compound interest is the accelerated growth achieved as you maintain a pattern of regular, consistent investing and gain interest on your interest. In financial terms, the net effect of compound interest on growth is exponential as opposed to steady.
Unfortunately, most companies are missing the fact that compound interest is not solely a financial concept. It is also a critically important idea to apply to your people. Words can have more than one meaning. As always, the key is to ask the right questions.
Here are four big ones:
How much interest do your fellow employees have in their work?
Many companies actually measure the level of their human interest in employee engagement surveys. The challenge arises when a company starts out with low human interest. The problem has been well researched by Gallup who reports that across all industries, seven out of 10 employees are not fully engaged at work. Said differently, there is not as much interest as there could be.
How can human interest compound?
Research also confirms that once positive emotions are introduced, people who are engaged can spread those feelings at work. Specifically, Sigal Barsade has shown that anyone’s engagement can affect the interest of everyone around them. Think of the cascading ripple effect of viral engagement. Engagement is contagious.
What’s the impact?
Research has also proven that highly engaged teams drive the bottom lines (plural) of any company—the triple bottom lines of profit, people, and the planet that leading companies use today as the yardstick of true success. As in finances, the net effect of compound human interest on growth is also exponential rather than steady.
Finally, what can I do about it?
Even those without fancy titles or positions of authority can exercise a powerful influence in an organization. Anyone can be more disciplined, support others, develop insight, live (and work) their values, and create their future.
If you do have some organizational authority you can do the same.
Whether you use the term compound interest, contagious growth, viral engagement, or the ripple effect doesn’t matter. What matters is to first understand that people drive growth, and second, that anyone can light the spark that triggers compound interest.