Unintended Consequences

“Trade Gap With Mexico Grows as Peso Falls”– Wall Street Journal

“Visa Curbs Send Tech Jobs Down Mexico Way”– Financial Times

Here are two headlines from May 5. The first article began with “President Donald Trump’s tough talk on Mexico might have had an unintended effect.” It went on to discuss how fear of a trade war has pushed down the value of the peso so much that now even cheaper Mexican goods are flooding into the United States, thereby increasing the trade deficit.

The second article revealed how the President’s pledge to clamp down on immigration has led to plans by a number of global Indian tech firms to significantly expand their presence in Mexico rather than in the United States. According to Arvind Malhotra, global head of strategic accounts and Latin America for Tech Mahindra, “We want to ramp up operations in Latin America – especially English-speaking operations – because of the current administration.”

The President merely espousing his views on tougher trade and visa regulations led to rapid changes. Changes diametrically opposite to his goals of decreasing imports and increasing technical capacity in the United States.

The law of unintended consequences at work.

Here’s another example of unintended consequences. Consider the initial responses of Oscar Munoz, CEO of United Airlines, to the horrific video of a beaten and bloody Dr David Dao being dragged off one of Munoz’s airplanes. His comments attacked Dao as “disruptive and belligerent”. He added, “Treating our customers and each other with respect and dignity is at the core of who we are”—certainly didn’t seem that way from the video… Munoz intended to tamp down the incident, but instead, his words set off a firestorm that led to a global public relations crisis for the airline. And for Munoz.

Why do words and actions so often lead to results that are far from what was intended?

It happens all the time in government and in business. Mostly we don’t hear about it. But whether we hear about it or not, the cost of all of these unintended consequences is staggering.

Why does this happen?

The three examples I’ve mentioned all share some characteristics that led to the unintended consequences. First off, the messages went forth without enough, or perhaps any, input from knowledgeable advisors. Experts fully versed about the issues at hand. Experts who could offer the best advice about how to proceed in the most effective manner to achieve the desired results with the lowest chance of unforeseen…and unintended…consequences.

Secondly, all three proclamations were rushed out before enough time was taken to think things through properly. Hubris and self-confidence ruled the day. In the case of Munoz, he certainly needed to act rapidly but not so rapidly that he couldn’t take the time to gather information, consult the experts, and carefully consider the best message to deliver and how it would sound to viewers of the video.

In the case of the President, there was no need for rapid comments about these issues. A few more weeks or even months of careful preparation might have led to results aligned with goals.

President Trump and CEO Munoz operate in bubbles of their own making. They live in echo chambers filled with those who see their job as supporting whatever the President or CEO says. Thus they rarely hear the full range of options and the consequences of choosing those options. Even more rarely do they hear the opposing views warning of the possible unintended consequences that could easily result from their actions.

Those who suffer unintended consequences often don’t learn from them. In Munoz’s case, he had no choice but to respond after the media firestorm erupted over his callous comments. The connection between his initial words and the public response was clear and immediate.

But what about the President? His situation is far more common. The unintended consequences were at a distance from his actions that spurred them on. While the connection was pointed out, there was no immediate video. No easily followed and clear connection. Enough time has passed that he can easily point to other causes.

No acceptance of responsibility means no learning from mistakes and no improvement in decision-making. Unintended consequences continue to detract from expected results. Goals are not achieved.

Think about the times you’ve said or heard “we never expected that.” If you are the decision maker, follow the trail back to yourself. Consider carefully what you could have done differently. More importantly, in the future, take the time to better evaluate possible consequences of your words and decisions. Search out and consider opposing views and expert opinions. The best way to deal with unintended consequences is to do your homework and work hard to ensure they never happen in the first place.

 

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