Second and third order consequences

Think about the downstream ramifications of your actions

Photo by Linus Nylund on Unsplash

The goal is to accurately weigh the true cost and benefits of a proposed solution.

What are second and third order consequences?

Zoom out to see non-obvious ripples effects

Second and third order consequences aren’t always obvious at first glance.

Examples of second order consequences are all around you

  • Trying to save time in one department → creates more work for another department. The sales team makes a change, but it creates a lot more work for the product and engineering teams.
  • Making changes to the product → made things worse. You added a product feature because customers said they wanted it. But it ended up making things worse and now there are even more complaints.
  • Adding a new offering → unintentionally created cannibalization. You saw a competitor offered a free version of their product, and you thought, “We should do that too!” Then realize this cannibalizes your paid products.
  • A solution makes sense in the moment → but makes things harder next year. There are plenty of ways to hit your sales quota. But some tactics make it harder for you to do it again a month from now.

How to identify second order consequences in your daily work

  1. Who else might be impacted?
  2. What parts of the business might be affected?
  3. What new problems might this solution create?

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Wes Kao

Marketing | Product | Strategy | Prev: altMBA, Seth Godin HQ, Flite (acq by Snapchat), Gap Inc. @wes_kao | weskao.com