The Cobra Effect: When Solutions Make Problems Worse Instead of Better

how the cobra effect occurs in business and how to avoid it

In November 1989, Mexico City introduced a car rationing scheme to curb air pollution. The city’s government prohibited 20 percent of the vehicles from plying on the roads between Monday and Friday based on the last digit of their license plates.

Initial studies showed the project was successful. Eventually, the well-intentioned scheme steered out of control. To bypass the restriction, people bought more cars, many of which were highly polluting used cars. The air quality and traffic congestion worsened.

Three years later, the UN declared Mexico City the most polluted city on the planet. Research showed that the increased number of vehicles made carbon levels rise by 13 percent.

This is an example of the Cobra Effect, where an attempted solution to solve a problem leads to unintended consequences that make it worse.

The term originated from an incident during the colonial rule of the British in India. The British administration worried about the number of venomous snakes in Delhi and declared a bounty for every dead cobra. The strategy succeeded initially as people brought in dead snakes in large numbers.

But over time, people began to breed cobras for the income. When the government realized this, it scrapped the bounty. By then, cobra farmers had a decent population of now-worthless cobras. So they released the snakes, leading to an increase in the population of wild cobras.

The Cobra Effect in Business

Companies place a premium on visible action and decisiveness. This obsession makes executives introduce quick-fixes when they hear about problems. But they rarely examine the consequences, many of which have the opposite effect.

Senior leaders impose strict rules to make people work longer hours. This results in people wasting time at work (thanks to Parkinson’s Law). Productivity drops and costs skyrocket. By the time the leadership reverses the rules to save costs, wasting time becomes an integral part of the workplace’s culture.

Companies introduce software without deliberating on the goals of digitization or adequately training people. This results in chaos—even everyday operations become cumbersome. Eventually, companies abandon the new software and revert to their archaic systems, but not without processes turning more inefficient than before.

The obsession with quick-fixes also fuels a culture where people manufacture problems to appear busy and justify their worth. As a result, the workplace becomes a location where the vicious cycle of solving one problem after another plays out like Groundhog’s Day.

Conventional wisdom dictates that to avoid the Cobra Effect, we must make decisions that we know in advance will prove right. On paper, this sounds sensible. But it doesn’t work on the ground because decisions only turn out right or wrong in hindsight.

You can, however, take steps to mitigate damage and increase the chances of reaching favorable outcomes by your decisions.

3 Steps to Avoid the Cobra Effect

It’s common to swing into action when we encounter a problem. But this often makes us confuse the symptoms as the problem. The visible problem gets solved. But everyone knows it’ll occur again or get worse.

The symptoms are not the problem, the underlying reasons behind them are. When we deliberate before we act, we get better at not just solving problems but also preventing them.

Here’s how you can identify and solve the right problems at work:

1. Identify Important Problems

When we cannot identify what’s important, everything appears urgent. And when everything appears urgent, nothing is.

To solve real problems, it’s essential to use data and anecdotal experience to identify the 20 percent reasons that cause 80 percent of your problems. Apply techniques like 5 Why’s to unearth the underlying reasons obvious symptoms.

Then take the next step.

2. Model Your Solutions

how to create models to solve problems at worl

Everything you and everyone knows is an assumption, systems thinker Donella Meadows wrote. This includes models that worked previously because they could fail when reapplied in a similar situation.

Present your model to solve the specific problem. Invite stakeholders to shoot it down, challenge your assumptions, and add their own.

This gives you enough qualitative data to build a test-worthy hypothesis.

3. Test Your Solutions

“The thing to do when you don’t know is not to bluff and not to freeze but to learn. The way you learn… is by trial, and error, error, error.” — Donella Meadows

It’s easy to make brainstorming the proxy for the actual work. The fear of failing makes people go back-and-forth in meeting rooms for so long that the end result is “death by committee.” People get worn out by discussions and take action for the sake of it. Or they resign to living with the problem.

Unless your model ships out the door and gets assessed, you cannot know whether it was right or not.

Collect empirical data on metrics that indicate how effective your model is. Look for signs of things not going right and act on them. Tweak your model or rescind it early to avoid situations from spiraling out of control. Otherwise, you can never put them back to the way they were before.

Summing Up

When impulsive, poorly-designed actions become the norm, the workplace gets infested with problems. Fire-fighting, saving the day, and inaction become the norm. Things never get better. In fact, they only get worse.

But when ideas and decisions get examined, implemented, tested, and tweaked, you can build solid models that work.

The only tasks after that are to maintain and grow.

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