Why Small Habits Matter

Every other year, Warren Buffett and some old friends go to Pebble Beach to play golf. Legend has it that in the 1980s, Jack Byrne, who had taken over GEICO, proposed a side bet among the players. If someone put up $10, then made a hole-in-one during that weekend, Byrne would pay that person $10,000.

Everyone else put up the $10. Buffett, however, thought it over for a few seconds and decided not to do it. The odds were just not good enough and it would be a foolish investment.

Just as past behavior is the best predictor of future performance, the small habits we develop, and how we handle the small decisions are powerful indicators of how we’ll behave in more important situations.

That's why an executive who leaves the lights of his office on at the end of the day probably won’t be a good steward of the company’s $1M marketing budget, just as the middle manager who mistreats the waitress probably won't make a good leader.

Small habits matter. Watch them closely.