U.S. manufacturing knows all too well what unintended consequences can mean. Well-meaning attempts to protect the environment, create jobs, promote worker health, conserve energy, generate taxes or bring about some other public benefit have sometimes had very different, even opposite, effects on our shops and factories.
The typical scenario is this: Policy makers misunderstand or ignore the costs to manufacturers that their laws or regulations might create. Because these costs can directly impact competitiveness and profitability, manufacturing companies must take urgent actions that elected officials or government bureaucrats did not anticipate. Raising the minimum wage, let’s say, might make investing in capitol (buying a robot) more attractive than investing in labor (hiring new people). If automation isn’t enough, then moving production to a low-wage country may become a compelling option. If that resort does not succeed, some companies may go out of business altogether. In the aggregate, the hoped-for gain in worker pay never appears. Jobs disappear. Tax revenue from payroll decreases.
Managers attempting to make improvements can inflict their own unintended consequences. Cost-cutting measures imposed on one process may add even more costs to another, for example. Programs to reward one behavior (such as increasing on-time delivery) may inadvertently create incentives for cutting corners elsewhere (such as sloppy packaging), thus leading to worse, not better, service to customers.
What’s to be learned from unintended consequences? What can be done to minimize their harm? These suggestions may be helpful:
• Recognize that unintended consequences do happen. The world is complex, full of unknown interactions between subtle variables. People can be ornery, tending to act on what they see as their own best interests in the short term.
• Think things through. Loopholes, false assumptions and wishful delusions are traps for which to watch. Do creative role-playing in your mind. Consider what you would do in situations affected by a proposed action. Try pilot programs first.
• Communicate. Talk, listen and take heed. (Nobody is as smart as they think they are.) Be clear about expectations. Confusion upends results more often then contrariness.
• Watch and learn. Pay attention to early results and have a plug to pull.
• Avoid cynicism. Hang on to the good in good intentions. Look to rechannel the positive energy behind them. Unintended consequences should make us wiser, not weaker.
Have a story about unintended consequences in manufacturing that you think others can learn from? Send it to malbert@mmsonline.com.
