An Elephant? What Elephant? Where Is the Elephant? Decision-Making: Actions, Influences, Impacts and Unintended Consequences: 2040’s Ideas and Innovations Newsletter
Issue 75: Sept 29, 2022
In June of this year, we published an article about unintended consequencesand how many organizations, governments and individuals are blindsided by not anticipating the future. Technically, unintended consequences are outcomes of actions in the immediate past or in current times that have unforeseen impacts or influences on the near or far future. Consider a line of dominoes or a house built from playing cards. When one is touched or removed, all the others are influenced and fall into disarray.
Living in the Moment
Although we seem to be evolutionarily programmed to constantly assess our surroundings to ensure safety and security for the long-term, we often react based on the immediate moment. We struggle to understand what seems far off, ambiguous, or outside of our span of knowledge and experience. Furthermore, we prefer to stay on the surface, like skipping stones over water. For many of us, our goal is to stay on the surface and not explore what lies in the deep where things are unknown, perhaps complicated, or uncomfortable. It is hard to contend with the future when we are living in the present and have unfulfilled needs, wants and problems that need to be solved right now. We typically think (or not) and take action to ensure we meet expectations in the present.
Connected Ecosystem
The pandemic disrupted many of the systems we depended on with far-reaching effects. For example, the price of food, cars, and just about everything has escalated because of labor shortages, scarcity of materials and distribution costs. These are external forces that come back to impact us personally and professionally. Markets react to these shifts affecting the value of personal and organizations’ investment portfolios. Then the shortfalls are passed back to consumers and customers with higher prices and even the workforce with longer hours and no pay increases. Everything is connected. And today, we are experiencing the domino effect of over two years of disruption and inability to pivot quickly enough to avoid the unintended consequences of a series of events largely out of our control.
Single Decisions or Actions
Each decision or action we take as an individual, organization or a society is part of an interconnected set of systems in a larger societal system. We influence and impact other parts of the systems, whether we know it or not.
For example, the price of butter is up 25% over the past 12 months. Why?
Let’s look back to early 2020:
Demand for product from suppliers and wholesalers quickly shifted from providing businesses (restaurants, factories, schools, etc.) with products to providing product for individual household consumption.
Suppliers and wholesale companies couldn’t adapt quickly enough operating in a complex system structured to meet near future demand.
The situation was then compounded by a disrupted distribution network contending with the lack of sufficient equipment (trucks, ships, containers) and an exodus of a workforce to operate the equipment.
While the price of raw materials and the cost of labor across production and the supply chain increased.
Now in 2022:
The butter price increase is being driven by supply shortages: The U.S. has the lowest amount of butter in storage facilities since 2017.
Milk production, which apparently usually sees year-over-year growth, recently saw a production decline as increases in underlying costs hurt dairy farmers.
Exacerbating the problem is that as the WSJ explains, butter is actually at the bottom of the milk hierarchy, with milk typically being sold to bottlers, followed by makers of products like ice cream and cheese, before the remainder is churned into butter.
Toss in continuing labor shortages at processing facilities and simply increasing production isn’t an option.
In planning out demand, the timing is especially problematic: The winter holidays are prime baking season, when butter demand is expected to increase. The USDA has said suppliers in parts of the country are worried about being able to meet all the orders from retailers.
The end result is that we are expected to pay more for what we need — if we can even find it. Scarcity leads to highly dependent consequences across most systems. So, to reinforce the concept, we have created a complex infrastructure in which any change impacts the rest of the system. The pandemic reflected this dramatically.
Benefitting from Consequences
As a society, when an opportunity is noted, many take advantage of the situation. Organizations (companies selling products or services) also take advantage of the conditions betting that consumers will eventually accept price increases and therefore raise their own prices for products or services. The market seemingly bears the brunt of the increases which in turn increases profit. Who wants to miss an opportunity like this created from unintended consequences?
What Are Unintended Consequences?
Read the Full Article and Learn What Unintended Consequences are>