Are you suffering from the unintended consequences of decisions that were made months, even years, earlier?  Louise Earle reveals how leaders can improve the effectiveness of their decisions

How often have you sat in meetings thinking “haven’t we been here before?” or “I thought we’d dealt with this issue!” If the answer is “surprisingly often”, you’re not alone. Unfortunately, whilst we might discuss issues and make decisions that are designed to deal with them, some decisions do not always achieve the desired result. In fact, many of us have to revisit issues that should have been resolved by earlier measures. Only now, the potential consequences are much worse.

There are two factors causing this phenomenon of unintended consequences. On the one hand leadership plays a key role to ensure that the right decision is made and that it’s followed up with the right course of action. Organisational factors, like where decisions are made, however, can impact the outcome of any decision. In some cases, decisions are made at one level in the organisation, but then
actioned by people further down the hierarchy. For example, budget cuts are often agreed at senior level in broad terms, but others will have to actually implement these cuts.

Decision makers in such circumstances can be accused of lacking any understanding of the practical realities. And if other people in the organization implement decisions, then they may not understand the rationale or intentions behind those decisions.  Even when decisions are being actioned by those close to the decision-maker, the implementation can happen at another time in different circumstances.  Again, this increases the risk of unintended results.

Targets and their unintended consequences
The way organisations (and people) are targeted and rewarded can have a signifcant impact on how decisions are made and implemented. A great example of this is the use of targets by the Labour government in the early days of its drive for public sector reform. The Blair government relied heavily on targets and internal incentivisation to achieve improved services, enhanced efficiency and reduced costs in the NHS. One big drive was reducing waiting times, i.e. patients being seen within 4 hours in A&E.  This, however, resulted in unintended consequences such as patient care being compromised as people were being rushed through. Another drive – enabling patients to see a GP within 48 hours – also resulted in unintended consequences, which were highlighted to Tony Blair personally when a voter confronted him 2 days before an election. She informed him that it was practically impossible for her to make appointments in her local doctor’s surgery more than 24 hours in advance. So government targets designed to improve services were in fact resulting in less flexibility, and unhappy patients. Although it’s rare for a leader to be faced with the unintended consequences of their decisions, a shocked Blair responded by describing the outcome as “unintended”. This use of targets in the public sector illustrates how our well-intentioned actions can actually make problems worse.  And that, despite much rational thinking and thorough decision making, the consequences can be different to those intended.

In some cases, however, unintended consequences are the result of the complete absence of any rational thinking about the implications of decisions. Take the recent problems in the banking sector. In this case, it is not just the challenges of following a decision through, but errors on the part of the decision maker that created the unintended, yet catastrophic, consequences for the global economy. In this case, the bankers simply did not understand the consequences of their decisions because they did not understand the risks inherent in the product, i.e. the ‘structured credit vehicles’ and complex bonds at the heart of the financial crisis, which were packaged from various financial products that included sub-prime loans. This very process of combining various products together into these bonds enabled them to be flagged as low risk, on the basis of very complex calculations.  The complexity of these calculations was such that the low-risk rating attached to them could not be understood by decision-makers. Ultimately, the risk rating turned out to be wrong, and the calculations were so complex that the risks and consequences of those investments hadn’t been understood when the investments were made. Targets didn’t help here either.  As banking and mortgage sales pay are heavily bonus-based and dependent on how much profit and sales is generated now, as opposed to the long term, the system was encouraging sales staff to sell mortgages to vulnerable customers, which encouraged the bankers to generate growth through high-risk lending.  Long term thinking was therefore not encouraged or rewarded.

The above examples demonstrate that different factors can prevent organisations attaining the results they seek from the decisions they make. Therefore it’s vital for leaders to think not only about the impact of their decisions, but how they can ensure those decisions get the desired results.

Improving the effectiveness of your decisions
So how can leaders improve the effectiveness of their decisions? Firstly, during the decision-making process itself, you need to consider the impact – and not just the intended impact, but also the potential knock-on unintended consequences. For example, if we target doctors’ surgeries on waiting times, they may be forced to reduce the flexibility in their appointments system to meet the target and/or sacrifice/compromise patient care. ER Consultants expertise in facilitating decision-making, particularly at board level, can help you structure the decision making process effectively, and explore the practical consequences of your decisions.

Also important to effective decision-making are the considerations of the practical issues. For example, what level of priority is this work to have? What are the key messages to be taken forward and communicated to staff? Whilst agreements may be reached about these practical issues, the subsequent action will probably vary across the organisation.  Different team members return to their own corners of the organisation, and they remember the discussion with less accuracy as time goes on. To counteract this, ER Consultants can track the outcomes of your decisions to find out what has really happened as a consequence through a decision-tracking tool. Decision-tracking involves exploring the implications of a decision through a facilitated process (see opposite). By exploring how a decision is received, perceived, understood and acted upon, unintended consequences can be managed and effectiveness improved. By using decision-tracking, clients are able to gauge the progress of the changes they have set in motion over set periods of time.

Rather than wait until you are revisiting and suffering the unintended consequences of your decisions a year or two down the line, why not save time, money and effort by getting it right the first time round, through our facilitated decision-tracking process?

Decision Tracking
Decision-tracking involves exploring the implications of a decision, for example:

• What level of priority/urgency has been given locally to the decision?
• What do others understand by the decision and its rationale?
• What actions are being taken in different parts of the organization?  Are these actions consistent and appropriate?
• What are the tensions and conflicts impacting on local responses to the decision?
• How has the decision been communicated in different areas? How has this communication been received?

© er consultants Topics Issue 1, 2009