The Law of Unintended Consequences

Sometimes it takes a stroke of lightning to see the bigger picture. I had this experience when I read about yet a next bunch of failures with large IT projects. Over the years in many of my blogs I commented on how isolated measures in optimizing processes or organizations miss their intended target or even backfire. Only integral decisions, based upon looking at total process chains or business transactions, will work. What I missed was the governing law behind it: the Law of Unintended Consequences.

Although essentially an optimistic person, reality turned me into a life-long believer in the concepts of Murphy's law. Despite the humorous connotation of the Law and its amendments, the naked truth behind it too often surfaces in business life. But with a world becoming ever more complex, I felt the need for another strong concept to explain many of the manifestations of things going wrong on organization. In 1936 sociologist Robert K. Merton published his paper, "The Unanticipated Consequences of Purposive Social Action". Although written 75 years ago to comment on the feasibility of a designed society, it remarkably applies to today's complex corporate life.

Let's plot Merton's five possible causes of unintended consequences on a few business issues:

1. Ignorance
   Since it is impossible to anticipate everything, we accept incomplete analysis before we start. Issue: the biggest reason for failing projects.
2. Error
   Assuming that what worked in the past will still work today and tomorrow. Issue: if you don't innovate and adapt, you will decline and die
3. Immediate interest
   Jumping on short term, often personal, goals which may contradict intended long-term effects. Issue: why most performance based incentive programs fail.
4. Basic values
   People react to things based upon ingrown, empirical and "safe" values. Change may prohibit or distress these actions. Issue: why most change projects fail since change of basic values requires a long-term effort.
5. Self-defeating prophecy
   Finding solutions before the problem occurs and when the problem not occurs we are surprised. Issue: many implemented procedures to mitigate risks are more expensive than the actual risk. 

Well, Merton’s ideas seem to cover many of today’s over-complexity, failure and self-deception seen in many organizations. The only thing that I’m missing is that managers are sometimes aware that they have areas of ignorance. But in trying to resolve this they miss out other less obvious risks. So to adapt Merton’s thinking I would add another 2 causes:

6.      Insurance trap
It is a common approach hire consultants or specialist to cover the obvious risks. Their mitigation of course narrowed down to their level of expertise.  Issue: many sound technical advices fail to be implemented because of organizational incompatibility. 

7.      Non-decisiveness
In looking for perfect solutions or all encompassing compromises, the window of opportunity will vanish and (new) counter powers will flourish. Issue: committee based and over-communicated investigations and decisions will never result in the initial set goal.

All in all the Law of Unintended Consequences is for me a topic to address around any business decision. Not to create absolute certainty but at least to look before you leap.

Hans.van.nes@results2match.com