How do you avoid the “Cobra Effect” and its unintended consequences?

Let’s go back in time and visualize India under British colonial times. Delhi city was full of poisonous cobras which were causing lots of problems, including death. The British government decided to solve the problem by giving a bounty to everyone who would bring a dead cobra. Initially the number of deadly snakes were dramatically decreased, but later something interesting happened. 

Since the government was handing out a reward for each caught cobra, farmers started to grow them. After the government figured out this scheme, they stopped the payments. So, farmers released the snakes and Delhi had more cobras than before. 

The “Cobra Effect” – unintended consequences

This story sounds almost like an anecdote, but it became so popular that it even earned the name “Cobra effect”, which means that actions of people might have unanticipated or unintended consequences. These days we have many more similar stories, mainly about public policies, but I believe the Law of Unintended Consequences can also be found under the more hidden business curtains. 

After British government’s decision to reward farmers who caught cobras, Delhi had more cobras than before.

Although unintended consequences are usually connoted with negative effects, they might also turn out positive. The recent story of Tesla’s founder Elon Musk presenting his new CyberTruck is a fun example to explore. 

During the presentation Elon Musk asked the Lead Designer to come over on stage and test the “armoured windows” by throwing a metal ball against it. The windows were smashed twice, neglecting the promise of durability. Although it sounds like a disastrous moment for Tesla, they have received an enormous amount of media attention and their order intake of the new trucks seems to be doing very well. Who could expect this after such a big public failure?

Understanding and anticipating unintended consequences in the business environment or public policy setting is crucial. It helps you to identify potential risks before the implementation of your actions and allows you to come up with a mitigation plan. 

Tesla’s story is still being debated whether the break of the windows was intentional or not. I believe this was a well scripted part of their marketing strategy. Most likely they thought through all different possible consequences and decided to take the rather risky move. And it turned out very well.  

So what can we learn here from Tesla and how can we avoid unintended consequences in our environment? 

Structured problem solving process is always a good idea

I think almost all decisions we make in life are like bets, no matter how smart, educated or experienced we are. There is no such thing as a risk-less strategy. Instead you should get comfortable with the fact that you can never be 100% sure. This however doesn’t mean that you need to start gambling.

Structured problem solving approach based on PDCA (Plan – Do – Check – Act) cycle always helps to avoid Oops moments.

As LEAN people would say, follow a structured problem solving methodology, which enforces the use of data and facts from gemba to make at least an educated guess to minimize risks. Once your root cause analysis has shown which actions you need to take, remember the law of unintended consequences.

Think of all possible outcomes

Before implementing your countermeasures, which were directly derived from the root cause analysis, pauze for a moment. Don’t go for short-term gains and try to imagine what your actions might cause in the longer run. It’s great if you saved costs on staff training this quarter, but what will happen next?

In order to facilitate your discussion about unintended consequences, consider using these tips and tricks:

  1. Draw an Issue Tree. Think of all potential issues which can happen if you implement a certain action, and summarize it using the issue tree template. Conduct this exercise together with others to ensure all possible scenarios are captured. Once you have a good overview, try to estimate a probability for each and compare with alternative actions. Finally, don’t forget to identify your mitigation plan which will help you to quickly react if something does go wrong.

  2. Test before going big. Instead of going all-in from the get-go, test your countermeasures on a smaller scale. This will help to minimize risks. Be thoughtful and careful in selecting the right test environment to gain valuable learnings.

  3. Study historical attempts. Try to learn about similar initiatives from others within or outside your organization. If someone somewhere has already done the same or similar, it would be a pity not to learn from their experiences. Don’t be afraid to reach out and ask for advice.  
Inside my sister’s chemistry laboratory, where scientists are working on various experiments every day.

Even though you thought through everything you could imagine, accept that not all things can always be predicted. Sometimes it’s okay to fail and start over again. But it’s easier if it happens fast, as it allows you to quickly readjust by incorporating your learnings. 

Often we need to act like chemical scientists – try hundreds of reactions until you discover the one which works. Good luck and please let me know your experiences with unintended consequences.

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