The Law of unintended consequences

The Law of unintended consequences

The terrorists who attacked the Paris satirical media organization Charlie Hebdo hoped to silence its voice. Instead, 3 million issues were printed following the attack, compared to 60,000 before the attack. Welcome to the Law of Unintended Consequences.

Is this law a reflection of human nature or economics? Is there a mystical comic figure guiding our planet? Or, more likely, do unintended consequences emerge from the reality that every action in a system sets in motion a reaction? What I grasp from observation is that when you push something too far you always generate an unintended and undesired response.

A former Oscar Mayer executive told me that the company’s manufacturing leaders, in trying to pull cost out of its ham deli products, created luncheon meat that tasted more like water than ham. When sales plunged, the product managers regained their power in the corporate hierarchy over product decisions.

In response to a seemingly endless number of ads on TV shows, we now record the shows to avoid the ads.

To attract and retain fans, the national football league created rules and a culture that led to player brain injuries. Today, many rational parents no longer want their children to play football.

Political advertising has become so caustic and uncivil that young people drop out of mid-term voting; few people find the ads believable anymore.

The National Rifle Association protects the right of individuals to own the types of guns whose only purpose is military warfare, creating a backlash against an organization that used to be about protecting hunters’ rights. Protecting abortion rights resulted in Planned Parenthood supporting very late-term abortions. This action reduced support for its cause.

Arkansas’ efforts to lower the cost of Medicaid harmed children’s health and lowered their future earning potential and contribution to Arkansas tax revenues. Unhealthy children also drive up healthcare costs.

Moving to the right to win the GOP primary ensured Romney would not beat Obama.

In designing a healthcare bill that handled every single potential consideration and in believing the public sector could do everything better than the private sector, then First Lady Hillary Clinton created a monstrosity that went nowhere.

As to the future?

Wall Street’s efforts to castrate Dodd-Frank (yes, I do think that is the right verb) may give rise to Elizabeth Warren’s presidency, if not in 2016, then 2020.

Efforts by the Koch brothers and other lobbyists to keep climate change legislation from being enacted will lead to future laws with larger adverse impacts on those fighting climate change solutions today.

And the list can go on and on.

As you contemplate actions in 2015, think more carefully about the consequences. Are you pushing for more market share than is healthy for your industry’s margins? Are you squeezing your people at the expense of their loyalty, engagement and tenure? Have you voted for representatives who are so politically polarized that their legislative body can no longer effectively govern? There are many issues – adequate public infrastructure investment and lowering prison costs and recidivism rates among them – that demand an effective legislative body.

Talented leaders stop pushing before a backlash, or they pick a better strategy for achieving their aim, one with fewer unintended consequences. Below are some tools that will prove helpful for assessing your decisions.

Tools to help avoid unintended consequences

Scenario-based planning in which you create three different scenarios of the future based on multiple known and unknown future events that will impact whether your planned action works out well or not. Examine the decision in each scenario.
“And-then” improvisational storytelling starts with one person stating the planned action. Then each person (in turn) adds to the sequence of events to create an unfolding story. Each “and then” must be a logical reaction, but not necessarily the intended reaction to an action.
• Imagine the worst possible outcome of an action and conduct a post mortem of how this outcome came about.
Experiment before committing in one direction.
Identify all the assumptions you have made — explicitly and implicitly — in deciding your chosen path. Also, list all the “facts” supporting the decision. Invite an outsider into your group to decide if your “facts” are actually assumptions. Test the most critical assumptions.

More articles by Kay Plantes

Kay Plantes is an MIT-trained economist, business strategy consultant, columnist and author. Business model innovation, strategic leadership and smart economic policies are her professional passions. She resides in San Diego, California but still considers Madison home. She is the author of Beyond Price.

The opinions expressed herein or statements made in the above column are solely those of the author, and do not necessarily reflect the views of WTN Media, LLC. WTN accepts no legal liability or responsibility for any claims made or opinions expressed herein.