Cobra Effect – the law of unintended consequences!

All views are personal. Sources are cited. Feedback is welcome.

Cobra Effect – the law of unintended consequences! / 074, 29 Apr 2023

It is an interesting anecdote which gives this article its unique name. In19th century India, there were a lot of cobras in and around Delhi, and deaths due to snakebites were common. To improve the situation, the British authorities announced a bounty for every dead cobra brought in. At first, it seemed to work well, with lots of dead cobras being brought in. With time, the number of cobras being brought in by people should have reduced in proportion to the surviving population. Yet, the number of dead cobras being brought in increased week after week. The authorities were at first confused, and then suspicious. They investigated and found that people had started breeding cobras to make extra money; in fact, many cobra farms had mushroomed in and around Delhi. Since it was easier to kill captive cobras than seek them out in the open, most of the cobras being brought in were actually from the farms, and not from the open streets.

On nearly every parameter, whether eliminating the open dangers in the street, or in controlling the cobra population, or in reducing the number of snakebites, the bounty had the exact opposite consequences of what it had been designed for. This gave rise to the Cobra effect – the law of unintended consequences, where we get totally opposite results to what we plan for. This theory was first introduced by German economist Horst Siebert in the 1950s. In short, the Cobra effect is a phenomenon in which an attempted solution actually worsens the original problem. It is a reminder for all of us to take the time to think through and understand the full implications of our decisions, however well-intentioned they may be. History is rife with such examples where well-intentioned decisions have actually worsened the original problems:

• To reduce the number of cars (and traffic) on the roads, in 1989, Mexico City announced a scheme whereby all cars had to stay off the road on one day of the week, using their license plate ending numbers (0 and 1 weren’t allowed on Mondays, 2 and 3 on Tuesdays, and so on). The Cobra effect was that the number of cars on the roads increased because well-off people simply bought another car with a different number plate to drive on the off days. It also created a social divide, because those less well-off could not buy a second car, and hence could use their only cars on certain days.
• In China, in the late 1950s, it was identified that grain production was falling due to sparrows that were eating away at the crops. A nationwide campaign to ‘smash sparrows’ (and other pests) was rolled out, which was extraordinarily successful, and the sparrow population had almost become extinct by 1960. But this meant that locusts bred unchecked in the absence of their natural predators, the sparrows, and grain production was severely damaged, leading to the Cobra effect of the Great famine in China. The authorities took corrective action by importing sparrows from the Soviet Union to restore the ecological balance.
• In the USA, prohibition was introduced between 1920-33 to check crime and improve public health. Instead, it led to an increase in organised crime and created extensive crime syndicates who managed the illicit bootlegging of alcohol. This actually increased gang wars and crime in urban areas, resulting in a Cobra effect of having the opposite results (breakdown of law and order, instead of improvement). I guess this inspired that all-time classic, The Godfather by Mario Puzo.

In business too, we see the Cobra effects of decisions all the time! Some examples readily come to mind:

a. We give high Sales targets without considering the Mfg. capacity, or we may give Mfg. targets without looking at the market situations. Unaligned Targets in an organisation have the cobra effect of causing internal conflicts and causing customer dissatisfaction!

b. Cutting deemed ‘unnecessary’ costs such as training, travel, if not judiciously implemented, can have the cobra effect of creating low employee and company performance!

c. For senior management, it is important to have some long-term targets, because focusing on short-term targets may create the cobra effect of endangering the long-term future of an organisation!

So how do we prevent such Cobra effects in our organisation? It is not difficult, but requires patience, though. A few points from personal experience:

1. Develop a 360-degree view by taking diverse opinions. Play the devil’s advocate, think through potential scenarios, and anticipate likely problems and challenges. Try and look around corners!
2. Continuous monitoring is essential. Even the best of plans cannot anticipate all the variables and reactions of people concerned. Keep taking stock of micro impacts and do necessary course corrections in time!
3. Learn from past history. Most of what we are doing today has been attempted already, by someone in some context. Engage deeply with experienced persons, learn why a similar initiative did not work well in the past, and implement the fixes in the present.

While careful consideration may result in some delay, it will save time and effort in the long run. Coming back to our story of the Cobras, it didn’t have a happy ending. The British authorities, on finding that people were deliberately breeding cobras, abruptly scrapped the bounty. The people, well, didn’t find the cobras lucrative anymore, and so they just released them into the open. Thus, creating an even bigger problem than before! And so was created the parable of the Cobra effect, which, metaphorically, finds resonance in every aspect of our lives, personal, societal, economic, or political.

I hope you enjoyed reading this one, and as always, I request you to share your own thoughts and experiences in the comments section. Let us build a conversation on this topic!

Warm regards, Krishnakumar.

?

?

Image courtesy:

The cobra effect - Sketchplanations

References:

Perverse incentive - Wikipedia

Systems Thinking and the Cobra Effect - Our World (unu.edu)

Goodhart's law - Wikipedia

The Cobra Effect: Lessons in Unintended Consequences | OddFeed