Every choice has a consequence. While making a bunch of choices during the day, we think through the intended consequences related to each and navigate through the maze using our fast or slow brain. As we think that we are adept at making certain kinds of decisions, we move those kinds of choices from our slow brain, the analytical one, to the fast brain, the reactive one. The fast brain is good at making simpler choices, but it is the slow brain that is good for making complex choices through a well thought of cause and effect analysis. When we make choices without considering all the variables in the equation properly, we create a situation associated with linear thinking, interesting named “The Cobra Effect”.
The story goes that in British Colonial India, Delhi had a problem with Cobras. It is well known that Cobras are highly venomous, and their numbers should be in check, esp. around living quarters. To solve this problem, the Delhi British Government decided to offer bounties for every dead Cobra produced by locals. On the surface, this appears to be a reasonable solution. The count of Cobras started falling in the city as a result of this bounty program. The locals soon realized that due to the reduced number of Cobras, they are getting fewer and fewer opportunities to collect the bounty. So, they started raising Cobras in their houses and using those to collect bounties. The Government officials realized, after some time, that they are paying far more bounty than they have expected as a part of the program. And, so they stopped the bounty. The locals realized that raising Cobras are no longer beneficial for them and so they left all the Cobras in the wild – exacerbating the initial problem and wasting the funds in the process too!
As budding entrepreneurs, all of us are faced with a bunch of business choices daily. We try to solve them using a bunch of methods – based on our knowledge of the subject, based on our experience, based on others’ past experiences, based on review/feedback from Industry leaders, etc. However, we must still realize that all problems are unique and even though we are taking cues from others, we have curbed the urge to rush to a solution that may seem to solve it but might only be a short-term bandage and may turn into a long-term crisis. It may appear prudent to solve a problem to reduce financial loss or improve financial gain, it is always worth to take a step back and check all aspects of the choice – financial, reputational, social, etc.
If you are faced with any such situation and want our insights, feel free to reach us at firstname.lastname@example.org and we would be happy to attempt to dissect the problem with you.