How do you improve the culture in a charity?
How do you improve the culture in a sports club?
To answer this question, we’re looking at two different topics and how what we learn from them can impact on the process of improving the protection and welfare of children being served by charities and sports clubs.
Those two topics?
Compound Interest and… Cycling.
SIMPLE INTEREST - V - COMPOUND INTEREST
"Interest is a sum paid or payable as compensation for the temporary withholding of money.
There are two principal forms of interest: simple interest and compound interest. An award of compound interest means that the interest payment for a certain period is added to the principal sum owed and that sum is treated as a new principal for calculating the interest for the next period. In other words, the creditor-claimant receives interest upon interest.
By contrast, when only simple interest is awarded, the interest is calculated only on the principal owed; the interest owed for a certain period does not merge with the principal and become part of the base upon which future interest is calculated".
Credit: John Yukio Gotanda , “Compound Interest in International Disputes” (2004), Oxford University Comparative Law Forum
In international commercial arbitrations, the issue of whether a party should be awarded simple interest, or compound interest, on a commercial payment dispute, can be the difference of millions of euros.
To give an idea of the power of compound interest, you only have to look at the difference in accumulated value, over time, of money invested with the accrual of simple interest (the red line in the chart) and money invested with the accrual of compound interest (the blue line).
The difference is staggering.
Credit: Don’t’ Underestimate the power of compound interest
This notion of compound interest – of interest piling upon interest in the calculation of the overall sum of money owed by a debtor to a creditor – parallels a process known as the accumulation of marginal gains.
COMPOUND INTEREST AND CYCLING
WHAT’S A MARGINAL GAIN?
"When Sir Dave Brailsford became head of British Cycling in 2002, the team had almost no record of success: British cycling had only won a single gold medal in its 76-year history. That quickly changed under Sir Dave’s leadership. At the 2008 Beijing Olympics, his squad won seven out of 10 gold medals available in track cycling, and they matched the achievement at the London Olympics four years later. Sir Dave now leads Britain’s first ever professional cycling team, which has won three of the last four Tour de France events".
For Brailsford, the concept was about the aggregation of marginal gains.
THE AGGREGATION OF MARGINAL GAINS
Brailsford was interviewed for the Harvard Business Review, in an article entitled How 1% Performance Improvements Led To Olympic Gold
The whole principle came from the idea that if you broke down everything you could think of that goes into riding a bike, and then improved it by 1%, you will get a significant increase when you put them all together
Coach to the most successful GB Olympic Cycling Team of all time
So what type of 1% improvements did Brailsford improve?
- Mechanics of the team truck & its effect on the accumulation of dust
- Painting the floor of the team truck white, to spot impurities
- Improvements in aerodynamics through wind tunnel experimentations
- Hiring a surgeon to teach the athletes about proper hand washing to avoid illnesess
- Bringing their own mattresses and pillows to events to ensure consistency of sleep cycles
WHAT MARGINAL GAIN AGGREGATION LOOKS LIKE
Credit: James Clear, Marginal Gains
THE SIX INCHES IN FRONT OF YOUR FACE
One of my favourite sports films features Al Pacino in the American Football film called Any Given Sunday. You don't have to be a sports fan to enjoy the speech. The context? It's a do-or-die game for the team of which he's the head coach. Everything's on the line: for him, personally; for the team; for many of the careers of the players. His speech - talking about fighting for the 'inches' that make up the difference in the margin for error in professional football - echoes, for me, Brailsford's emphasis on the marginal gains that took his team to the highest level in cycling.
You know, when you get old in life things get taken from you. I mean that's...part of life. But, you only learn that when you start losing stuff. You find out life’s this game of inches. So is football. Because in either game, life or football, the margin for error is so small -- I mean one-half a step too late, or too early, and you don’t quite make it. One-half second too slow, too fast, you don’t quite catch it.
The inches we need are everywhere around us.
They’re in every break of the game, every minute, every second.
On this team, we fight for that inch. On this team, we tear ourselves and everyone else around us to pieces for that inch. We claw with our fingernails for that inch, because we know when we add up all those inches that’s gonna make the fuckin' difference between winning and losing! Between livin' and dyin'!
Any Given Sunday
COMPOUND INTEREST, CYCLING, AL PACINO AND THE WELFARE OF CHILDREN
How does any of this relate to the welfare and protection of children?
Well it’s in the accumulation, the aggregation of the 1% improvements which, when seen in isolation, seem inconsequential; but when they’re all added up, they make the biggest difference possible to the outcomes in your organisation.
The whole principle comes from the idea that if you break down everything you can think of that goes into recruiting a new volunteer, and then improve it by 1%, you will get a significant increase when you put them all together.
2016, Complyfile
Making those 1% changes, fighting for those 1 inches, that’s the difference between accepting a culture in your club or charity of mediocrity, of sameness… and being a trail-blazing leading club or charity in your sector.
So where are those 1% changes? Those 1 inches in front of your face?
Well they’re in every single process you employ in your club or charity.
It’s about identifying every potential 1% for improvement.
And even though those 1% improvement opportunities seem insignificant on their own, it’s about committing to making those 1% changes, in the knowledge that, like compound interst, the improvement builds upon itself, slowly at first, but incrementally at great speed.
Until before you know it, your organisation is radically better than it was before.
SUMMARY
Compound interest, cycling and Al Pacino might not, at first glance, seem the most obvious source of inspiration for someone passionate about improving the culture and practice of the protection and welfare and children or vulnerable adults in their organisation.
But it’s by looking outside of our own zones of reference, by seeking to learn from change-makers in other industries and sectors, that we can be inspired to be the change-makers in our own clubs; or own charities.
What are the 1% changes, the marginal gains, you could make in yours?
This essay is for general information purposes only and does not constitute legal or other professional advice.
Specific legal advice from a firm of solicitors should always be sought on the application of the law in any particular situation.
Whilst all reasonable endeavours have been made to ensure the accuracy of the content, no liability whatsoever is accepted for any omissions or errors or for any action taken in reliance of the information in this essay.
