The Diderot Effect: when an upgrade is the warning, and when it's the foundation.
When a single new addition enters an environment, everything around it feels inadequate by comparison. Whether the cascade that follows is destructive or constructive depends on what kind of addition it is.
In 1769, Denis Diderot received a gift: a scarlet dressing gown so elegant it made every other object in his study suddenly look unworthy. He replaced his desk. Then his rugs, his prints, his chair, his books. He went into debt. He later wrote a famous essay lamenting what the gown had cost him, and called himself its slave.
The pattern has a name now. Anthropologist Grant McCracken coined it in 1986: the Diderot Effect. When one elevated object enters an environment, the surrounding pieces that once felt acceptable begin to feel inadequate by contrast. The first item is not the change. It is the catalyst that reveals the gap between what is and what could be.
The standard reading is a warning. Do not let one upgrade pull you into a spiral of replacements you cannot afford.
There is another reading. And it changes how every new addition to your operation should be evaluated.
Two Cascades. One Mechanism.
The cascade is real either way. What changes is the kind of addition that starts it.
The diagnostic question is not what category of addition it is: technology, headcount, outsourcing partner, process redesign. The diagnostic question is whether it bears structural load.
A point-solution that looks impressive but does not bear operational load will make the pieces around it feel outdated. A load-bearing addition will make the pieces around it capable.
What the Destructive Cascade Looks Like In Practice
An MGA buys a submission intake AI. Three months in, it has surfaced data quality issues their management system cannot cleanly handle. The tool did what it was sold to do: it revealed something. But it cannot fix what it found.
The CTO proposes a migration to address the gaps. Six months later, the operation is mid-transition. Quote-to-bind has not moved. The cascade is running, but in the wrong direction: each new investment chases the inadequacy the previous one exposed, without resolving the structural gap beneath any of them.
This is not an argument against AI procurement. It is an argument against procurement without foundation. The tool is not the problem. The absence of load-bearing infrastructure beneath it is.
What the Constructive Cascade Looks Like In Practice
The COO calls a partner who runs submission operations end-to-end. Within ninety days, the structural inadequacy the AI surfaced is properly resourced. The data quality issue has an owner. The AMS migration is deprioritized because the root problem is being addressed directly.
Three months later, the renewal process feels disorganized by comparison. Not because it degraded: because the standard next door rose. The cascade is running again, but now in the right direction. Each adjacent workflow becomes visible as the next natural improvement, not the next emergency.
The Data Behind the Pattern
of BPO engagements that bear structural load expand into adjacent workflows within 9 months of go-live.
Source: Internal SparrowHawk engagement data, 2023 to 2025
73%
That nine-month window is not a long-tail surprise. It is a near-term, predictable consequence of doing the first workflow well. The keystone does not stay a keystone for long. It becomes the floor from which the next arch is built.
Operations leaders who treat the first engagement as a permanent boundary are routinely surprised by this. Operations leaders who plan for it are routinely vindicated.
The Operating Implication
The question to ask before funding any new addition is not "can this handle the immediate workflow?" Most additions can, at least on paper. The question is: does it bear load, or does it only make the surrounding pieces look outdated?
The robe makes the room feel inadequate. The keystone makes the room capable. Both start a cascade. Only one of them is worth funding.
Tell the keystone from the robe.
Three Questions Before You Fund the Cascade
-
Which AI tools or point solutions in your operation have surfaced problems they did not solve, and what is the actual cost of the cascade they triggered?
-
Where in your workflows is heroic individual effort silently substituting for missing structural infrastructure?
-
For any new addition currently under evaluation: does it bear operational load, or does it only make the surrounding pieces look outdated?
READ FURTHER
Want the 2-page deep dive?
Download the one-sheeter for The Diderot Effect: the principle, the operational application, and the diagnostic frame in a format built for a buying committee conversation.
Josh DeRocco
Executive Vice President
SparrowHawk Group
Schedule a Meeting
