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.
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.
#290 | November 4, 2022 | Tom x Midjourney
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.
Which stage is your project in? Image from here
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…