Unintended Consequences

Although well-intentioned, companies sometimes make moves that have 
unexpected negative effects.

I think it’s fair to say that most of us try our best to do things that will help our organizations. Unfortunately, at times, the best plans can go awry and lead to unintended consequences. Here are a few of the more interesting examples of unintended consequences that I have encountered in working with different companies:

The New Performance Review Plan. One organization spent a great deal of time and money developing what it thought was an excellent performance review system. Documents were created to allow management to capture the critical aspects of an employee’s performance over the course of the year. This was a great idea on the surface, as all employees should know how they are performing so they can work to expand their strengths and improve any areas of weakness, and this system provided a standardized means for achieving this. Unfortunately, the review documents were so detailed and extensive that they required approximately 8 hours for a supervisor or manager to complete for each employee. As a result, supervisors and managers spent a great deal of their time completing these documents, and had less time available to actually work with and develop their employees. The system frustrated many and did not demonstrably improve employee performance.

The Maintenance Department Work Hours Plan. Like many, this company had difficulty hiring skilled maintenance mechanics, especially for second- and third-shift operations. As a result, most maintenance, including much-needed preventive maintenance, was performed on the first shift or occasionally on weekends. Although it was not an ideal arrangement, the maintenance mechanics for the most part were able to keep up with both routine and unplanned maintenance issues. In an attempt to spread the maintenance work over multiple shifts, the company decided to implement a rotating-shift system for all maintenance mechanics, as this was deemed the fairest way to accomplish an around-the-clock maintenance goal. None of the maintenance mechanics were happy with this change in their work hours. Because this company was not the only one of its kind in the area, within one month, half of the maintenance mechanics left to work elsewhere. Equipment downtime soared and preventive maintenance was “temporarily” halted, with the result being an increase in the number of unplanned maintenance incidents (a real Catch-22). Changing work hours to get better coverage produced the unintended consequences of alienating key employees, reducing overall maintenance effectiveness and making it even harder to hire new skilled employees.

The “Super” Production Specialist. This produced custom products in a wide variety of capacities with numerous options. For years, the company staffed its workforce with specialists for each product line. These specialists could build any product within their lines efficiently and with the highest level of quality. When products shipped to customers, they were right. The business was very cyclical, especially between product families. It was common for one line to be producing at a high rate while another was experiencing periods of slow demand. Consequently, some specialists were busy while others were looking for things to do. One of the things some specialists liked to do was build product ahead of time. Either they would work on orders that were not due for a few weeks, or even months, or they would build “on spec” (with “spec” in this case meaning speculation, not specification). This often led to an abundance of unsold (and even unsellable) finished goods inventory. Due to the complexity of the products and the options each could contain, the idea of a production specialist probably made sense at one time. However, the changeable nature of this company’s business contributed to the unintended consequences of unproductive employees and excessive operating costs.

Employee Skills Enhancement. I encountered this example of unintended consequences recently when I was brought into a company to provide training for some of its employees. I was working with two groups of about 10 employees each. Employees were regularly attending the trainings, despite either having just completed a shift or planning to start a shift right after the session. It was a win-win situation for the company and the employees: The company was gaining better-skilled employees, and each employee was increasing his or her individual skills, and earning overtime pay to do so. After some time, however, two of the employees stopped coming to the training sessions, not because of anything they or the company did wrong, but because they were on a path to earning too much money to qualify for government healthcare subsidies. Although no doubt a legitimate concern for each of the employees, this was a very sad example of how a good plan can be undermined by unintended consequences that are beyond a company’s control.

These examples show how any well-meaning company’s actions can have unanticipated or unintended effects. The key is to learn from these consequences and react effectively by taking the necessary corrective actions.