By the time I was college (2003) IDEO was already a cult brand. They had differentiated based on their innovative design thinking approach, with a focus on human-centered design methodologies. At that time, I was an aspiring graphic designer and a reluctant marketing double-major. My parents' idea. But IDEO came up in both my graphic design and marketing curriculum, and I was definitely a fanboy.

In my graphic design courses, design thinking was the gospel, and the shopping cart redesign was all the rage. While in my marketing coursework, the positioning work that was done, was used as a case study.

There is probably no better example of effective differentiation in professional services than IDEO.

Don't be "better" be "different"

There is a lot of truth in that statement, but what does it really mean? How does a company actually differentiate?

When I ask consulting firm founders "What makes your firm different? Why would a client choose you instead of your competitors?" They inevitably give me a response that references their people, their process, their expertise. And if you look at the homepage of just about any consulting firm, you will see this listed fairly high up on the page, just below a generic statement about how they "solve complex problems".

People and process is a functional differentiator, and there are two issues with this being your answer:

1. It isn't specific enough - every other consulting firm will tout the expertise of their people, and how their process is more effective/efficient. I've written about this before in Your People Aren't Your Differentiator.
2. It isn't based in any relevant context. Even if you make it specific, if you start here, you will likely lose your prospect. They simply won't understand why this is important to them.

Sure, IDEO has lost some of it's luster having gone through several private equity sales and acquisitions, but take a look at their homepage... do you see anything generic about people and process there? Take a look, I'll wait...

The answer is a resounding no. And that's considering that at this point, they have such brand cache, that they could probably get away with it for a while. Their name is quite synonimous with "design thinking". Even their Wikipedia page says so. As does Perplexity.

3 Layers of Differentiation

If IDEO had started touting their design thinking process as their core differentiator, without the context of their belief in human-centered design (the idea that design that empathizes with people, and puts people at the center, can drive real business and societal value) there is no way they would have been as successful as they were. Because, what the heck is design thinking, and why should I care?

We need to reframe how we think about differentiation. There are actually 3 layers:

1. IP Differentiation (frameworks, mothodologies, concepts)

2. GTM Differentiation (sales, marketing, and business development)

3. Functional Differentiation (people and process)

All three of these layers are important, but there is a reason that IP Differentiation is listed first, and Functional Differentiation is listed last. All three of these layers are important, are opportunities for you to really be different, and they are all interrelated:

• IP Differentiation is the critical context for your Functional Differentiation
• Functional Differentiation is the proof for your IP Differentiation
• IP Differentiation is the critical context for your GTM Differentiation
• GTM Differentiation brings awareness and affinity for your IP Differentiation
• GTM Differentiation brings awareness and affinity for your Functional Differentiation

Notice that the context provided by your IP differentiation is critical for the success of both your GTM and Functional Differentiation.

Context is King

Let's play a little bit of pretend here. Pretend that it's 1991, you are David Kelly, one of the founders of IDEO, and you are at an industry coference talking to a prospective client. You introduce yourself, and the person responds with. I've never heard of IDEO, what does your firm do? You say "we are a product design firm, with deep expertise in design thinking". It's possible the person you are speaking with asks you to define what that is, but very likely you've already lost them.

Now let's play this a slightly different way. You introduce yourself by saying "we believe that good design that empathizes with people, and puts people at the center, can drive real business and make a real positive impact on society. Over the years we've really honed our human-centered design methodology and design thinking process, to develop some of the most innovative and impactful products, some of which you likely use on a daily basis." Now there is no way you don't have your prospect intrigued.

IP Differentiation should provide the context for everything else your firm does. It can also guide how you go to market. This context can also help de-risk your functional differentiation during the buying process, because different is often seen as risky. Especially during more turbulent and volatile times, like what we are experiencing right now. Well thought out and presented IP can help people think differently and reframe their pain points and problems. By doing so, it can get them to reframe how they think about solutions as well. It's that context that can make your solution seem less risky.

GTM Differentiation

While GTM Differentiation doesn't really help you answer the original question - "What makes your firm different?" - you can't scale without it, because of the inverse effectiveness curve. The more organizations pursue the same execution, the less effective that execution will become due to your audience being fatigued from it.

But it's not just about doing thigs differently. Context matters here as well. Your IP Differentiation should guide how you do marketing and business development for your firm. Look no further than IDEO. With their firm grip on Human-Centered Design and Design Thinking, they have focused on really owning their IP and leveraging it in their go-to-market approach. They have a whole subdomain dedicated to Design Thinking and they have built out IDEO University with certification programs and everything.

Be Different

Most first I have worked with have IP Differentiation in abundance. The problem is that they are often too close to it, and may not have the ability to extract and synthesize it into a succinct differentiator.

So go back and try to answer that question for your firm. What really makes you different?