The power of a percentage point.

There are people whose “name is their resume” and there are people who are very accomplished in our professional line of business and inspire many of us to try to emulate their success.

Bill Gates, Warren Buffet, Einstein etc., fall into the former category while many successful young entrepreneurs, people who rise up from the ranks rapidly in an organisation and feature in ‘30 under 30’ or ‘40 under 40’ lists… fall into the later category.

As a researcher, data analyst and a technology professional, the most interesting question to ask, for me, is

“What makes the later category people tick and perhaps transform few of them into the former category legends if they continue on the trajectory!”

The answer to my question turned out to be a ‘simple percentage point’

Statistically a majority of professionals should have heard the power of compounding with respect to their 401k contributions or Structured Investments or pension funds.

Equally, many of them fail to grasp the importance of the same principle in the personal and professional development.

Let me give a quick illustration to provide more context in terms of personal development using the accretive principle.

Consider a group of three people with similar IQ, EQ.. academic qualifications and professional designations and job levelling. All three have been given an identical daily plan for the next 365 days.

On a daily basis, you have executed your routine and you have given your 100% to it.

Let’s call it as – “you gave 1.0 to your daily planning” ( be it work, creative arts, education, sports… you get the point? )

Your colleague under same strategy, gave it 101% or… gave 1.01 on a daily basis. Another colleague of yours gave 0.99 or 99% on a daily basis to the execution of the same plan.

After 365 days..

  • Your accretive result would be 1.0^365 which is 1.0
  • Your colleague one’s accretive result would be 1.01^365 which is 37.78
  • Your colleague two’s accretive result would be 0.99^365 which is 0.025
As you can see very clearly … a percentage point spread around the median resulted in a quantum of around 1500 times accretive output over a period of just 365 days.

For a person doing 99% of what is needed on a daily basis, a 101% may look like a minor difference.. but over a period of one year, it results in a difference of 1500 times. Imagine what would be the difference over multiple years !! Even for a person giving his 100%, a simple percentage point would result in significant gains over a long period.

That is what creates the differentiation between achievements and disappointments

Disclaimer: Author’s views are entirely his personal and should not be considered or attributed as representative or approved or authorised by the firm he is currently employed with.