Making Group Rules & Avoiding The Cobra Effect

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Here’s a nightmare story for you. What would you do if your hometown had a dangerous snake problem? Well, in the late 1800s, this is exactly what many towns in India faced. Giant poisonous King Cobra snakes were reigning terror on humans everywhere. 

Large venomous snakes took over entire cities!

Wanting the Cobra problem gone, the government offered cash rewards for dead Cobras. From a progressive leadership perspective, you’ve got to applaud the decentralized approach – BRAVO!

But, there was more than meets the eye here. 

Citizens began redeeming cash for their dead Cobras just like the government intended. That is until the cash incentive created an underground market of Cobra breeders who would breed Cobras for cash. 

Once the government caught wind of the Cobra breeding racket, the payment program stopped. Naturally, at the end of the program the breeders let their Cobras out of captivity and the result was a worse Cobra infestation that before. 

This is where we get the Cobra Effect term. It describes any misaligned incentive structure that yields the opposite result of what’s intended. 

The spirit of a rule is not always the way a rule is followed. 

Leaders and organizations are faced with the paradox of policy, rules, and incentives all the time. In the past, for example, DEUCE made a “daily duty” policy for staff to comment on the daily blog. The spirit of the policy was to foster conversation and engagement with the topic of the day and encourage others to do the same. The result? Staff started “ticking the box” with unremarkable, unauthentic “comments” that had the opposite effect. Ultimately, the policy was scrapped because the comments were unengaging and uninspiring. 

We believe that groups have remarkable untapped wisdom. This begs the question, what misaligned incentive structures have the opposite of the intended effect in your organization? 

1. REFLECT. Mine your organization for incentives that are yielding ineffective behaviors. Be explicit. Results here will depend on the container of trust and willingness built for your team. 
2. GROUP EXPERIMENT. Get back to the spirit! Brainstorm ways to create incentives that realign with the spirit of the original policy. Most teams know what incentives can be gamed and how they are broken.