As a manager will the ‘cobra effect’ come back to bite you?

“The best way to increase wolves in America, rabbits in Australia, and snakes in India, is to pay a bounty on their scalps. Then every patriot goes to raising them”
— Mark Twain – American author and humourist

As a manager will the Cobra effect come back and bite you?

So, what is the cobra effect?

During the times of British Colonial India in the city of Dehli, government officials were terrified by the large number of venomous cobra snakes in the city and sought to solve the problem.

The solution?

The government offered a bounty for every dead cobra. Initially the strategy was successful as large numbers of snakes were killed. However, some of the enterprising citizens of the city began breeding cobras as a source of income. After a while, the government officials began to realise that there were too many cobra skins being handed in, so the scheme was terminated.

What was the outcome?

The ‘enterprising’ cobra breeders on seeing that their snakes were worthless, set them free. This increased the number of snakes, wriggling, loose, wild and free in the city making the initial problem worse.

In French Colonial Indochina a similar situation occurred in Hanoi. The colonial officials deemed there were too many rats, so a bounty scheme was introduced. Not for dead rats, but for their tails. Before long, the officials noticed the city was full of tail-less rats. The ‘enterprising’ bounty hunters didn’t kill the rats, they just cut off their tails and released them back into the sewers. There they continued to breed which further increased the rat catchers’ income.

In more recent times we have seen another example of the ‘cobra effect’. In the 1980s, the USA provided money, military equipment and support to the Mujahideen insurgents fighting to overthrow the Russian army and the Marxist government in Afghanistan. One of the insurgent leaders was al-Qaeda’s Osama Bin Laden. With the fall of the government, Bin Laden was provided a base from where to plan the 9/11 attacks in 2001. This in turn lead to the US invasion of Afghanistan and the subsequent misery and death that continues to this day.

In conclusion what is the ‘cobra effect’?

It’s an anecdote where a problem’s attempted solution only makes it worse through unintended consequences.

As managers how can we take into account the ‘cobra effect’ in our jobs?

It’s important to remember that there is a section of any group of people who have a tendency to take advantage of a solution that tries to effect how people behave, like breeding cobras or cutting off the tail of rats. This may not be intentional, although it often is. They take short-term advantage of the system, even though it may lead to unintended consequences and more complex problems.

In our logistics business we had a major Australian retailer as a customer. They used our services to manage the opening and stocking of their new flagship store. One of the KPIs for retail store managers was sales per square metre. The ‘whiz kids’ at head office deemed that in-store replenishment storage of stock should be negligible as this reduced the sales per square metre. As a result, insufficient space in the new flagship store was allocated to in-store storage. The result was stock could not be replenished in time by store staff, overall sales decreased, and additional staff were employed to manage stock flows into the store. The new store had to be redesigned and modified. We continued to manage an offsite replenishment warehouse of the retailer until the store was reconfigured. Good for our business, but not for the retailer’s shareholders.

How can you prevent the ‘cobra effect’ on your organisation?

It’s easy to have a bright new idea on paper. First order effects are easy to identify, second and further effects require much deeper consideration and are much harder to identify.

When you have a ‘brilliant idea’, I would recommend you get your best and brighest people together and ask them about the possible ‘cobra effects’ before implementing. An idea can be fine-tuned by spending the time as suggested and hopefully any negative impacts will be minimised.

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What is your plan?

boer maak ‘n plan

In Afrikaans, the language spoken by the mainly Dutch immigrant descendants living in South Africa ‘boer maak ‘n plan’ means a ‘farmer makes a plan’.  The deprivations and harshness of farming in a foreign land brought resolve and the need to plan to get around or solve these problems.  Having travelled recently in Southern Africa I came across another similar saying in Zimbabwe where people often spoke about ‘making a plan’.

What does the saying really mean?

Not as it appears literally. The ‘hidden’ meaning is that you have an alternative plan (a plan B) when your first plan fails or is impossible to implement. In other words, you need to be flexible and adaptable to solve a problem.

How does this equate to being a manager or managing a business?

As business owners or managers, we need to plan in the first instance. As the saying goes, ‘if you fail to plan, you plan to fail’

However, having a rigid plan may not work if circumstances change. Let me give you an example?

Many years ago in our third party logistics business we were having difficulty in getting our trucks unloaded on time at a retailer’s distribution centre despite meeting their strict time slots. It was OK for the distribution centre to run late unloading you, however if you failed to arrive at the designated time slot you were ‘fined’. What made the situation even worse was that to make the early morning delivery time slots, trucks had to battle peak hour traffic to and from the distribution centre as well as the loading delays. This became an expensive experience – instead of 3 hours it was taking 6 hours to deliver and unload. It was further compounded by our fixed price delivery charge.

We had many meetings with distribution centre management and despite their assurances that the situation would improve, it did not.

What would solve our problem and be a ‘win’ for the distribution centre? Our Plan B.

Making some observations and talking to the receiving team at the distribution centre a plan emerged. All loads were hand unloaded (rather than on pallets) onto a conveyor with the individual cartons being scanned as they travelled up the belt. The distribution centre had a prime mover that was used for moving trailers around the receiving area.

We asked distribution centre management whether we could trial loading a 40’ container instead of an ordinary tautliner semi-trailer. We would bring the loaded container in early in the morning before peak hour, leave it in the receiving area for the distribution centre prime mover to move onto the unloading conveyor when it suited the receiving team. The empty container would then be picked up on the next early morning delivery. After a short trial, it was found that it was a win/win for both us and the distribution centre. Delivery time halved with a massive increase in margin for us and the distribution centre was able to utilise their receiving area far more efficiently.  

The success of the trial enabled us to purchase two second hand and obsolete hand semi-trailers for 10% of their replacement value and establish a unique closed loop delivery system that was extremely profitable.

We solved the waiting time problem and the peak hour travel problem which initially appeared to be unresolvable. We significantly increased our profits by having a Plan B.

Remember in any situation, you should always have a Plan B like the farmer faced with the unpredictability of the harsh African environment…….