Ep 73 | 2nd Order Consequences vs Our Decision Making Patterns with Brian Gubernick

Thank you for joining me today. It's Brian Gubernick, and welcome to the No Days Off podcast, where we believe that every single day brings a new opportunity to get better. Let's get into today's topic. Today I'd like to discuss second-order consequences. Now, What is a second-order consequence and why should you care? Here at No Days Off, we talk quite a bit around the decision-making process, how we're making decisions, frankly, how to make better decisions, decisions in terms of business, in terms of our health, in terms of our relationships. And so we spend a lot of time on that subject. However, one thing that we need to be considering when making these strategic moves, making these these very pivotal or significant decisions in our life are the second-order consequences, the things that are not our primary intention but are quite possibly impacted or created as a result of the primary decision being made. So let me, let me define second-order consequence a little bit and then give you some examples. And of course, a focusing question around how to apply this, this new knowledge to your world today. So a second-order consequence refers to an unintended or indirect outcome that comes about as a result of some primary decision or primary action that you take. So when an action is made or a choice is, is made, it has first-order consequences, like you made a decision to impact a specific outcome. And there are very direct and expect— expected effects. Second-order consequences, however, are subsequent effects that may not be immediately apparent or even anticipated. These second-order consequences can have a very significant impact on a situation or a system or a relationship or whatever it may be, and those impacts, they could be positive but they could also be very negative in nature. There's this potential, I guess, ripple effect that could have various impacts or have a less than positive influence on certain aspects of things, things that you may not have ever considered, and it may trigger an entirely new chain of events that was just never intended. So we have to consider second-order consequences when making decisions and when evaluating what the potential outcomes of these decisions may be. So let me give you some examples of second-order consequences, okay? One good example: Prohibition in the United States. So in the 1920s, the US implemented Prohibition, which banned alcohol from, from production, from sale, from distribution. And so the original intention, the primary intention, was to reduce crime and the various social issues that came along with or were associated with alcohol. And so on paper, it might have looked like a decent decision, but it had several unintended second-order consequences. These consequences included a rise in organized crime, a rise of illegal speakeasies and different bootlegging operations. It actually increased corruption, specifically within law enforcement, and there was a substantial loss of tax revenue for the government when it eliminated the legal sale of alcohol. Of alcohol. So the Prohibition era showcased how a well-intentioned policy could actually lead to a range of negative and unanticipated second-order consequences. Another good example along those same lines, the War on Drugs, right? Like, if you grew up in the '80s, you remember, you know, the War on Drugs. And the intention was to combat drug use and trafficking, but this approach, you know, it led to strict drug laws, increased law enforcement, and again, on paper, made it look great. However, the reality is we did not anticipate a second-order consequence that was the exponential growth of the prison population related to drug charges. And this prison population increase had a disproportionate impact on poor communities, minority communities. In addition, War on Drugs created this more lucrative black market, and it took a lot of resources away from prevention and treatment and things of that nature. So again, on paper it looked a certain way, but the outcome, the second-order consequences, I'm not here to say they outweighed the benefits, but there's a lot of downside that was not taken into consideration. Here's a really simple one. This is gonna sound silly, but it just kind of proves the second-order consequence. I'm very guilty of this one, that's why I speak about it. The 5:00 AM flight or the 6:00 AM flight. See, when many of us book travel, specifically work travel, we're like, "You know what? I got to be effective. I got to be efficient with my time. What I need to do is leave super early before the day gets rolling so I can get to my destination and then of course have a full day of work and I don't have any wasted time." Anybody else guilty of that or is that just me? Well, if you're nodding your head, then you know exactly what I'm about to say next. The 5:00 AM, the 6:00 AM flight, It looks fantastic on paper. And in theory, you land in that next spot and you're pretty efficient with your time. I mean, your day gets started alongside everybody else, provided you don't have a super long flight. However, the second order consequence there is we forget that if you have a 5 or 6 AM flight, you're probably waking up at 2:30 or 3 AM. And I don't know about everybody listening, 2:30, 3:00 AM is pretty early for most of us, myself included. And if I do not sleep enough, while I'm more efficient with my time, my mood, my energy, and everything else is impacted that next day. So again, on paper looks great. Second order consequence though is that I have to get up earlier, and getting up earlier jeopardizes my energy and my ability to think the next day. One last example I'll give you that I think is, is an interesting one, and you know I love sports analogies. How about the salary cap in sports? See, many sports leagues like the NFL, like the NBA, they have salary cap systems, and the intention of the salary cap is to create more competition, a more competitive balance between teams. And what it does is essentially limit the amount of money all teams can spend on player salaries. So if everybody has the same amount of money to spend, well then competition, I guess, has got to be pretty balanced. And while there is truth to that, we also got to think about some of the second-order consequences. One consequence is that players move from team to team more frequently than ever And why is that? Well, that's because salary caps create these constraints and it makes it difficult for teams to retain their top talent. So if you think about it, you've got a great player who you've developed and who deserves a higher pay relative to, you know, others performing at their similar level, but you as the team do not have the capacity to pay. Why? Because you're restricted by a salary cap. So while the cap makes things more competitive, it makes teams, you know, look quite different from year to year. So the balance of power within the league, as well as the fans' perceptions and interest in the sport, is actually pretty significantly influenced. So just something to think around. Now, what's the focusing question? What decisions are you making, or do you have to make, where you're focused on the primary decision to be made, but you've yet to really consider the ripple effect. What second-order consequences may come about from the first-order decision that you're about to make today? Have you considered second order? And if not, should you? And based on what you considered, does it influence the primary decision being made? Every day we're making decisions, but oftentimes we are neglecting fully thinking through what that decision means beyond the primary impact or effect it's meant to have. That's all I have for you today. The No Days Off Podcast. Thank you so much for listening, and remember, every single day brings a new opportunity to get better. So let's get after it.