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CHECKMATE OR STALEMATE: BALANCING INTENTIONS AND UNFORESEEN RESULTS!
Jul 24, 2023
The world of business is ever evolving, with more and more pressure on you as a
manager and leader to make better and quicker decisions. When carried out
without any afterthought, the upshot is unexpected outcomes. These unintended
consequences can have significant impact on your team, organisation, and even
your personal reputation and brand. Understanding and proactively addressing
these unintended consequences is crucial for your success and that of the team
and organisation.
You will explore four types of unintended consequences, and steps that you as
manager and leader can take to counteract or enhance each of them.
RIPPLE EFFECT:
The ripple effect occurs when a decision or action intended to solve a problem
creates new issues or challenges elsewhere within the organization. For
instance, implementing cost-cutting measures to improve profitability may
inadvertently lead to reduced employee morale and productivity. This often
leads to the loss of ‘good’ staff members and therefore, incurs recruitment,
training, and induction costs. Often wiping out any savings.
ACTIONABLE STEPS:
1. Anticipate potential ripple effects: Before implementing any decision,
conduct thorough risk assessments to identify potential unintended
consequences.
2. Communicate openly: Keep your team informed about the reasons behind your
decisions and encourage them to provide feedback and raise concerns.
3. Monitor and adapt: Regularly evaluate the impact of your decisions and make
necessary adjustments to mitigate any unintended consequences.
UNINTENDED INCENTIVES:
Unintended incentives occur when a decision or policy unintentionally encourages
behaviours that are contrary to the intended goal. For example, a sales
commission structure that prioritises individual sales may discourage
collaboration among team members, undermining overall team performance. As with
most sales and operations teams, the sales team sells services or products that
operations don’t have the capability to deliver on. Causing frustrations and
additional expense to rectify.
Actionable steps:
1. Align incentives with goals: Regularly review and analyse incentives to
ensure they are promoting the desired behaviours and outcomes.
2. Encourage collaboration: Foster an environment that values teamwork and
cooperation by promoting joint goals and recognising collective
achievements.
3. Seek feedback: Engage with your team to better understand how incentives
impacts behaviours and adjust accordingly.
MORAL HAZARD:
Moral hazard refers to the unintended consequence of individuals or teams taking
excessive risks due to a lack of personal accountability or consequence. As a
leader, it is important to strike a balance between encouraging innovation and
preventing reckless behaviour. For example, a leader or manager driving their
team to despair with the constant and excessive workload requirements, negative
feedback, and micromanaging, whilst expecting innovative and intuitive results.
ACTIONABLE STEPS:
1. Set clear expectations: Define boundaries and guidelines that encourage
creativity while ensuring accountability for the potential risks involved.
2. Foster a learning culture: Encourage experimentation and provide
opportunities for learning from failures while emphasising the importance of
responsible risk-taking.
3. Provide support and resources: Equip your team with the necessary resources,
development, tools, and coaching to make informed decisions and manage risks
effectively. Whilst developing your own capabilities around ‘Performance
Management’.
FEEDBACK LOOPS:
Feedback loops occur when the consequences of a decision or action are not
immediately apparent, leading to delayed or distorted feedback. This can hinder
the ability to learn from mistakes or make timely adjustments. This occurs when
focus is solely on the performance metrics without considering the individual
circumstances of team members.
Actionable steps:
1. Establish measurable metrics: Define clear performance indicators that can
provide timely feedback on the impact of decisions or actions.
2. Encourage open communication: Create an environment where team members feel
comfortable providing honest feedback and sharing observations.
3. Continuously evaluate and adapt: Regularly review performance metrics and
seek opportunities to refine and improve your decision-making processes
based on feedback received.
It is critical to recognise that unintended consequences are an inherent part of
decision-making and leadership. By proactively identifying and addressing these
unintended consequences, you can enhance your leadership effectiveness and
foster a more positive and productive work environment. Remember, being
attentive, open-minded, and adaptable will help you navigate the potential
pitfalls and turn them into valuable learning opportunities.
It is time to step up your game and lead from the back. Own your career and the
impact and value you bring the team, role and organisation.
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