Have you ever worked on a project that produced unexpected results? Unintended consequences are common in business. For example, sometimes when a senior manager makes a request, it causes a cascade of activity that is far beyond what she intended. The classic story (which may be an urban legend) involves a former Chairman of General Motors who casually commented to a staff member that he didn't like the color of the buildings on campus -- and inadvertently triggered an expensive (and totally unnecessary) repainting program.
Anyone who flies regularly experiences this phenomenon firsthand. In order to increase profitability, airlines now charge separately for many previously bundled services -- such as checking baggage, providing seats with leg room, eating meals on-board, etc. And indeed these previously free services have generated substantial incremental revenue for the airlines.
What was not intended was that passengers, to avoid the fees, would change their traveling habits. Many now cram more possessions into carry-on bags, bring more food (and smells) on board, and complain over smaller seats. This has made the flying experience even more difficult, particularly for the business travelers that provide most of the revenue. As Aviation Week explains, while charging for checked bags makes dollars and cents, it also costs airlines in customer satisfaction ratings. Carriers also may be affecting the iron-time departure metrics, as passengers seeking bin space for their overstuffed carry-ons cause delays.
All of us are affected by unintended consequences -- either as victims or unwitting perpetrators. To minimize their negative impact, there are two steps that managers can take:
Plan ahead (as much as you can). Start all projects or change efforts with the conscious realization that there could be surprising outcomes. One way to reinforce this assumption is to engage in scenario planning before pulling the trigger, preferably by engaging people who will be affected by the change. For example, my firm once worked with the operations executives of a large company that planned to shift some of its factory employees from an hourly to a salaried pay program. From the corporate perspective, there was no downside to this change and they anticipated a smooth transition. However when we invited employees to talk about the transition, the executives learned that many workers would strike over this change because they would have to put in full days during times when they preferred flexible work hours (such as hunting season). Knowing this in advance caused management to modify the plan and present it in a different way, avoiding a strike.
Test the waters. Conduct short, focused experiments to see how various parties will react to the change. For example, a team at another company was developing a new sales forecasting process, and started to apply elements of the new approach to one product in one region early on. This living laboratory for the new process gave them a real-time window into the reactions of their sales people, the lead time needed by supply chain, and the information formats that were easiest to use. This information allowed the project managers to modify their plans before rolling it out to the whole company.
Whenever you change something, it's impossible to eliminate all of the unintended consequences. But the more you can anticipate the possibilities, and be ready to deal with them, the greater your chances of success.
How do you deal with the possibility of unintended consequences in your projects?
Author's Note: My colleague Holly Newman contributed ideas and research for this post.
Cross-posted from Harvard Business Online.