Rethink the Repercussions
Why do sometimes well-aimed actions yield exactly opposite to desired results?
Why one only has control over actions & not over results?
Why do some plans, policies, strategy, crafted from the Ivory tower Boardroom fail as soon as it hits the ground?
I count him braver who overcomes his desires than him who conquers his enemies; for the hardest victory is over self.
These were famous words of wisdom from the Great Greek Philosopher (who was not perceived as great until he was poisoned to death) — Aristotle.
Human life, human form, and human evolution are synonymous with desires. As life comes into existence, from the very early days, the life and the caretaker of the life, both start witnessing desires, a series & sequences of endless desires, cravings, and ambition.
To fulfill these endless desires, one creates an award and reward mechanism, believing that these will constantly motivate one to keep moving, keep delivering and keep performing, thus achieving what one has set an eye to.
Every motivational talk, every strategist, every self-help book will encourage one to plan and plan and plan to avoid setbacks. These plans also have a starting point and milestones. To achieve the milestones one creates incentive structures whether material like money, gifts, or immaterial like promotions, positions, corner offices, etc.
But what if the plan that has been laid as per strategy, and incentives that have been rolled as per the procedure backfires?
It happened with Britishers in the early 19th century.
Sometime in the 19th Century, When Britishers were ruling India, a unique phenomenon was witnessed. Britishers who had subjugated large territories of India through the Crown controlled the city of Delhi, as well.
Britishers believed that the City is infested by Cobras (poisonous snakes). They believed that these cobras existed everywhere from the railway stations to markets to gymkhanas (where these Britishers visited regularly).
With limited choices and a lack of understanding of Indian topography, a set of smart British senior officers rolled out a scheme to curb the cobra population. They announced that whosoever will bring the dead Snake Skin of Cobra shall be paid a handsome sum of money.
The plan worked and lots of people made a bounty by bringing dead snakeskin. Post 6 months, neither the snake population reduced nor the people bringing dead snakeskin came down. No one could make sense of it. An Indian working for British ICS Services was appointed to find what the ground reality is.
The Indian Officer working for the British figured out that smart, entrepreneurial & creative residents of Delhi & neighboring areas have started breeding snakes to make the bounty (It became a profitable business for Indians in a world where Wealth was being plundered by Britishers). The same was reported to British masters.
The Britishers at once abolished the scheme. Frustrated & angry People of Delhi didn’t have an idea that this is coming through and were taken aback. Not knowing what to do with breaded snakes, they released them (a larger population of snakes) in by lanes of the city, thus leading to exactly the opposite of what was planned.
This phenomenon is also known as The Cobra Effect or Law of Unintended Consequences. A German economist Horst Siebert first mentioned about this in his book Der Kobra-Effekt.
Whether it’s Life, Investments, Profession, or work, the human reaction is to solve the immediate problem at hand taking a short term quick-fix solution ignoring the 2nd or 3rd-degree repercussions.
This is true for humans, organizations, institutions, governments, or countries.
In 2008, Mexico city which was grappling with severe Air pollution (very high levels of AQI) allowed certain weekdays with car numbers ending with certain digits. For example on Mondays during day time, Car plates ending with 5 & 6 were not allowed to ply on the city roads. Similarly for Tuesdays, Wednesdays & so & so forth. The city administration put severe penalties for forging number plates which acted as a deterrent.
Initially, people tried managing this by using more public transportation, which anyways was overcrowded. Left with little choice, most people bought another car — second hand or third hand with different number plates which were cheaper in cost as they were old, more polluting & less energy-efficient, thus defeating the end objective of the regulation completely.
This phenomenon too holds good in the Corporate World.
For Corporate India, Appraisal time is here in April. Every employee, whether one works for a small organization or a large corporate conglomerate is being appraised & evaluated for one’s performance for the year gone by.
It’s a Universal feeling: Every manager in the world wishes to have an obedient & efficient team member or members.
Team members who are self-motivated, self–driven, self-disciplined, and know their larger purpose in life, continue to and will continue to deliver & progress well, irrespective of the feedback or appraisal outcome.
For ones, who have been performing average as compared to their potential, or rather should I say, where managers believe the performance has been average — the feedback & appraisal is targeted to make the person count things that have not been done by one during the year or has been done poorly as compared to the peers.
Post the appraisal, one walks out of the meeting, completely dejected & demotivated.
Next month, the individual (the appraise) works relentlessly to find another opportunity (job) with just a little more salary (optical hike).
If one gets very little, the person moves on, pushing the firm or the organization to re-initiate the process of hiring, training, educating & delivery again.
If the person stays back, one starts finding one’s area of interest beyond work, which in mid-life is fitness, which in early life is friends, which in late corporate life is traveling or starting one’s new venture.
The entire process of appraisal just receded the enthusiasm, energy, motivation & joy of working & growing, exactly opposite to what the appraisal was meant for.
The Cobra effect has its fangs open in Investing as well.
In Financial Services, brokers are incentivized on brokerage or commissions they generate. Most clients are made to believe by brokers, that constant churning & trading of portfolios can get them good returns.
The irony is, that neither the client nor the broker knows in which direction the market will head next minute or the next day, both tend to pretend that their predictions will come true.
A free market is determined by forces beyond one’s imagination and hence impossible to predict consistently with perfection. Despite this truth, the broker keeps enticing clients with short-term calls, as the broker’s payout is linked to brokerage generated.
In the process, the client loses money or ends up making insignificant returns. The client exits the firm completely and ensures that in formal or informal gatherings he spells his or her angst against the broking outfit thereby creating bad publicity for the firm.
Also, it’s a known fact that it takes anything from 5X to 25X cost depending on the industry to get a new client rather than service existing clients or deepen relationships.
However, Broker firms incentivize their employees so that revenue and profitability can grow for the firm, leading to exactly the opposite outcomes.
One of the most famous verses of Shreemad Bhagawad Gita, that has reiterated that fact from the earliest days of humanity is, “
कर्मण्येवाधिकारस्ते मा फलेषु कदाचन ।
मा कर्मफलहेतुर्भुर्मा ते संगोऽस्त्वकर्मणि ॥
Meaning: One has a right to “Karma” (actions) but never to any Fruits thereof. One should never be motivated by the results of one’s actions, nor should there be any attachment to not doing one’s prescribed activities.
Thus Siddhartha Rastogi says,
“Whether it’s life or Profession, Set your goal, set your target, set your destination in your sub-conscious mind & keep working every day, every week, every month with patience & perseverance without looking for external gratification, being galvanized from within, thus enjoying the performance of action itself, rather being consumed by the outcome.
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