Managers should be aware of the unintended consequences their actions can bring about

Our search for a new chair has been worth the wait. John Bacon certainly brings us the wow factor. Another benefit - and we hadn't really thought of this - is that players tend to up their game when someone of a higher standard joins. Remember what happened when Dennis Bergkamp transferred to Arsenal? This got me thinking about the law of unintended consequences.

According to Wikipedia, there are three sorts of unintended consequences:

  • a positive unexpected benefit, such as serendipity or a windfall. The unexpected impact of our new chair is a good example;

  • a potential source of problems not originally envisaged;

  • a negative or perverse effect, which could have the opposite effect of that intended.

I thought of an example of the second category on my way to work this morning. My drive to the office takes me 14 miles through the South Downs on a fast road with sea glimpses - yes, I know I am lucky. Lately, I have noticed that there seem to be more people smoking at the wheel. You can spot them because of the tell-tale driver's window opened just a crack, even on a bitterly cold morning, and the vile habit of hurling out glowing stubs at traffic lights.

Perverse effects

I am a huge fan of the smoking ban. It is already having health benefits in Scotland and we will see them in England before long. People we never expected to give up are taking the stop-smoking opportunities on offer. The effort has been worth it. However, if more people are driving to work rather than walking or taking public transport so that they can top up their nicotine levels in the relative privacy of their car, we may have created a problem not originally envisaged.

I also wonder whether driving with a burning object in one hand in a highly flammable enclosed space while inhaling a known stimulant might be as dangerous as using a mobile phone?

Examples of the third type, the perverse incentive, happen all too often in the NHS. They can occur when a national policy is developed but not enough time is allowed to test it properly to see if the impact on the ground is as expected.

I know relatively little about payment by results, as we have yet to fully develop this approach for mental health services. But it would appear that the system was not fully road tested before implementation. The policy led some acute providers to increase staff in clinical coding departments exponentially and bill primary care trusts for multiple treatments in order to maximise income. And who could blame them, given the money they gained was being spent on patient care?

Commissioners then had to expend a great deal of energy and cost in policing the system, taking attention away from developing sophisticated commissioning strategies that would help keep people away from hospital in the first place.

This does not mean that payment by results was wrong, far from it, just that it needed more time for testing and adjustment.

So the lesson is plain - watch out for perverse incentives. The old adage of first do no harm always comes in handy.