Cobra Effect: The Law of Unintended Consequences (Part 1)
There are downsides to everything; there are unintended consequences to everything — Steve Jobs
A few months back, I read about the concept of ‘Cobra effect’, and since then I have been thinking about its implications in almost every aspect of our lives. In this article (Part 1), I will cover some of these implications.
Firstly, a brief about ‘Cobra effect’ which refers to the unintended consequences of our action. It is based upon an anecdote set during the time of British rule of colonial India. As per the story, the British government was concerned about a large number of venomous cobras in Delhi, and so it announced a policy of giving money in exchange for a dead Cobra. What was the impact? The number of cobras instead increased as more people started breeding Cobras so that they could kill them for money. Once the government found out about this, it scrapped the scheme. What happened next? The breeders then set the Cobras free as they were now worthless for them. So, the action taken by the government to reduce Cobra population, actually ended up having an opposite effect!
A lot of problems which we see around us today are actually a result of unintended consequences of some previous policies/ actions. Even if these policies had a good intention, their final outcome could be drastically different from the intended consequence.
Below are a few examples of ‘Cobra effect’ from our everyday lives:
1. Examples of unintended consequences of women-centric policies/ movements
a) The Unintended Consequences of longer maternity leaves:
In 2017, the Indian government had taken a big step by increasing maternity leaves from 12 weeks to 26 weeks. The intention of the government was good, as it wanted to reduce post maternity attrition. However, one report suggests that hiring of women may have actually gone down in the short term due to this amendment. Reason? The Maternity Benefit Act has two provisions which can have an unintended consequence on women employment :
- Almost the entire cost of 26 weeks maternity leaves is born by the employer. While the large companies can afford this cost and they understand that this is a small price of pay in return of a gender diverse workforce; however, it is the smaller companies with low margins which face a huge pressure on finances due to added costs of these leaves.
- The law does not provide any paternity leave, thus placing the entire responsibility of raising a newborn on the mother. This may result in some bias in the mind of an employer against the hiring of women especially when an equally qualified male candidate is available. Not every organization will think like this, especially the ones who genuinely understand the need of a diverse workforce, however a few organizations which are focused on short term goals may hold such biases.
A recent government proposal to partly reimburse the cost of additional maternity leaves is an indication that the government has realized about these unintended consequences and is looking for ways to minimize them. I am personally a big fan of shared parental leaves offered by many Scandinavian countries.
b) Unintended consequences of #Metoo
This is a very sensitive topic as #Metoo theme is a result of an outburst from many women across the world, in response to the incidents of harassment which they had faced at the workplace. The intention of the movement is noble and this movement will definitely play an important role in forcing government and companies to make the workplaces safer for women.
However, some unintended consequences of this movement can be its impact on mentoring of women and team camaraderie since more men may become fearful about unjust accusation or misunderstood comment. Thus, it is important that such movements maintain a careful balance between one individual’s right to express voice against harassment and another individual’s right to be considered innocent until proven guilty.
2. Examples of unintended consequences of our policies/ actions to protect the environment:
c) Odd-Even scheme to reduce air pollution
This scheme has a good intention to reduce air pollution by allowing only limited set of cars ( with number plate ending in either odd or even number) to be driven on road on a given day. However, if this scheme is not supported by a good public transport system, then an unintended consequence of the scheme can be more cars running on the road in the long run, since many people may buy 2 cars for convenience— one car with number plate ending in an odd number and other ending in even number.
d) Banning Plastic Straws:
Recently, some companies have stopped the use of plastic straws and have replaced them with bio-degradable alternatives. While it is a welcome move,however, some unintended consequences of this move are as follows:
- Currently, many retailers are replacing plastic straws with paper straws which can result in increased negative environmental effects due to cutting of trees.
- Some people with disability may rely on plastic straws as a tool of daily life and hence will be impacted by such bans.
3. Examples of unintended consequences of our policies/ actions in business:
Even our business decisions and policies at the workplace cannot escape the impact of Cobra effect. The common examples are mentioned below:
e) Poorly Designed Incentive Structures or Unrealistic Goal setting:
If the incentive structure is not carefully designed or if the performance goals of employees are unrealistic, then it will often encourage people to game the system.
Similarly, a high pay for performance component in a CEO’s compensation structure may result in the prioritization of projects which help in meeting short term targets at the expense of long term benefits
f) Use of Bell- Curve in performance appraisals:
A lot of companies are now moving away from a bell curve based performance appraisal system since it has an unintended consequence of promoting competition within a team, thus impacting collaboration within team members.
Other examples of Cobra Effect:
- Day care fines for late pickups may actually promote this behavior
- Unintended consequences of Green Revolution
- How humans may be responsible for creating the Sahara desert
Thus, we can summarize that Cobra effect is everywhere. While we can never fully eliminate it, we can definitely strive to minimize its impact.
In the next post (Part 2) I will share some thoughts on how we can possibly reduce the unintended consequences of our action.
Note: All views expressed in the above article are my personal views.