Going for gold
Sir Dave Brailsford infamously took Britain’s elite cyclists from also-rans to gold medallists, citing the power of marginal gains as the cornerstone of their success.
A sceptic might say that striving for marginal gains could drive competitors so far as to push or even bend the rules, but there’s no doubt attention to detail & a commitment to endless improvement can deliver stunning results over time.
It’s hardly a new idea, even in sport – I can recall Steve Waugh talking about “doing the one percenters” during Australia’s 1999 Cricket World Cup preparation – but how can we apply the concept practically?
Why bother striving for marginal gains at all? Because over time the aggregated gains begin to add up to make a huge difference (and if you let standards slip, then the cumulative declines become punishing too).
The concept of incremental improvements is far from new – in Japan the term kaizen, for which there is no directly equivalent English word, has long described how businesses strive for constant & neverending improvement.
Marginal gains in practice
As an investor I’m a big picture type, yet the concept of marginal gains should always apply to your portfolio, such as minimising transaction & management costs, taxes, consciously managing risks & your emotions, and using the right structures.
To continually improve the quality of your day-to-day life, you need to hold yourself to a higher standard. Study the typical day of a successful person closely and you’ll likely find that they rise early, start the day with an easy win (e.g. making the bed), and set themselves for a productive day with a nutritious breakfast.
From a business perspective, here are five ways you can aggregate marginal gains:
(i) Time management skills – how can you become more efficient? Take a speed-reading course, check emails twice per day instead of endlessly refreshing your inbox, or limit meetings to half an hour?
(ii) Automating processes – my daily blog email is automated, & so are my monthly management accounts; much other stuff I delegate. What processes can you automate to improve the operation of your business?
(iii) Training – normally I like to take a new Diploma or qualification every year, although this year I’m doing a presentation course. What skills or knowledge can you improve upon to give yourself the edge?
(iv) Split or A/B testing – compare two versions of your webpage, marketing material, or sales pitch. Which version works best? Use it, keep tweaking it, & repeat
(v) KPIs – consider how you measure the success of your business carefully – your performance indicators should be relevant, balanced, understandable, & shared.
The nature of marginal gains implies that you should challenge assumptions & look for small advantages in areas that others have dared not to tread.
Keep racking up those gains, for over time those seemingly small improvements will surely make all the difference.