The Consequences of Unintended Consequences

by Victor Cheng

I have a saying that when it comes to providing financial incentives, they always work all the time.

The tricky part is recognizing that sometimes what you thought you were “incentivizing” is not what you actually ended up incentivizing.

Often, it’s the unintended consequences that cause problems for companies.

Here’s a great post from Marc Andreesen, founder of Netscape, on Rebuilding Hollywood in Silicon Valley’s Image.  It’s a commentary on the current writer’s strike in Hollywood.

While I don’t agree with him on his vision for how Hollywood will evolve to be like Silicon Valley (I don’t think it’ll happen that quickly, if at all), I think his comments on Hollywood alienating  a new generation of TV viewers (or non-viewers in this case) is a serious risk.

More importantly, the post is a great example of thinking through ALL the consequences from a decision and not just the superficial ones.  Hollywood seems to be treating the writer’s strike as an opportunity to negotiate with writers (which it is) and an opportunity to manage expectations downward for the other union contracts coming up for renewal.  What they don’t seem to appreciate (or maybe they do appreciate but don’t care) is the impact it has on their viewers (current and future).

This is particularly surprising when you look at media usage rates, particularly for younger people.  There has been quite a dramatic shift from traditional media (newspapers, TV) to online media… and in 2007 in particular, social media (e.g., My Space, Facebook, etc…).

In a year when social media is “crossing the chasm” (a reference to Geoffrey Moore and his book on how new innovations cross over from early adopters to mainstream markets), there is not a very viable alternative to television media for people to turn to.

At the end of the day, it’s often these unintended consequences that can cause you the biggest headaches.  It’s something worth paying attention to, and getting some diversity of opinions around, before proceeding.

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