During November, we explore four mental models related to transformation and change. By the end of this month, you will have strengthened your innovator’s toolkit with these new principles and ideas. The law of diminishing returns is the first mental model for us to get our teeth into.
Your Snapshot
A quick synthesis of this issue to share
💡 The law of diminishing returns is the economic principle that investing more resources is no longer worth the return after a point.
💡 We can place our projects and innovations on an S-curve which helps us consider the phase of growth and the decline in impact.
💡 Using the law of diminishing returns enables us to be more precise, watchful and strategic in measuring success over time.
What is the law of diminishing returns?
The law of diminishing returns is the economic principle that after a certain point, additional investments in a business or venture will yield progressively smaller increases in output or profits. In other words, there comes the point where investing more resources is no longer worth the return.
This concept is often applied to business and investment but can also be used for education innovation. After a certain point, additional investments in an education innovation may not lead to proportional increases in student achievement or other measures of impact.
This challenges us to think about the change of impact over time. Our new project or pedagogical change may not have a consistent impact as time progresses.
The S Curve of Innovation and Diminishing Impact
The S-curve model is a useful adjacent concept (S is for Sigmoidal). It describes the change in impact (return) over time. As impact gradually diminishes, our project or innovation is on the downward slope of the S-curve. You will notice the S-curve shape on the graphic above.
When do we start thinking about how to refresh or redesign a project? How do you mitigate this decline in the planning and development phase?
We may also consider options for creating something new and closing off the project that has reached the end of its natural life cycle—creating a new S-curve that overlaps and grows something new and which is more impactful than the first.
Examples
When I pause to reflect on specific examples, I get drawn to the time spent planning and designing lessons. I know there is a point when I can begin to over plan. You might experience this too?
This happens when I am designing professional learning sessions and workshops too. I pass an inflection point where more planning and time investment (just one more slide) does not equal a proportionate impact.
Outside of education, a different example of the law of diminishing returns relates to Australian reforms for gambling advertising. New mandatory messaging will mean gambling companies rotate a range of taglines, not just “Gamble responsibly”.
This rotation attempts to mitigate ‘message fatigue’. Another way of saying the impact of the “gamble responsibly” message has diminished. Australia has the highest gambling losses of any country, so reform is much needed.
A final thought
With this mental model in your cognitive toolkit, you are more considerate about continuous and stable impact assumptions. It does not mean we have to change everything constantly, which brings about fatigue. But it enables us to be more precise, watchful and strategic in measuring success over time.
⏭🎯 Your Next Steps
Commit to action and turn words into works
- Assess where you are on the S-curve of impact for your current project or initiative.
- Reframe your thinking about diminishing returns. See it as an opportunity to assess the impact of your work and make adjustments accordingly.
- Make a plan for how you will refresh or redesign your project so that it can continue to have a positive impact.
🗣💬 Your Talking Points
Lead a team dialogue with these provocations
- What signals we are reaching the end of the S-curve for our current project?
- What would it look like to redesign our project so that it can continue to have a positive impact?
- What risks and challenges are associated with making significant changes to a project already underway?