The Law of Uninteded Consequences

I am sure that many of you have been reading about the upcoming report from the Auditor General of Ontario on the administration of the eHealth file in Ontario. The report is supposed to be released tomorrow morning, but already leaks about the content of the report are to be found in the media (side note: wonder where those leaks are coming from? To quote my favourite sage - Sir Humphrey - "the ship of state leaks from the top").

In anticipation of that report and as a result of the slew of untendered contracts put out by eHealth and others, the Government of Ontario has laid down the law - all contracts, no matter what value are to be competitively tendered. Previously the rule (brought into effect in 1985) was that all contracts over $25,000 had to be competitively tendered. Contracts with a value under this threshold could be sole sourced (with appropriate rules around follow-on work).

So what are the implications of competitively tendering everything? Let me give you an example that I recently heard about. An RFP was sent to a number of consulting firms for work with an estimated value of $1000. That's right, for One Thousand Dollars. In addition, the recipients had to adhere to and send in all the paper work that went along with this RFP. The paper work is basically the same for $1000 as it is for $100,000.

This overreaction leads to unintended consequences.

And from Wikipedia, for those who like definitions: The "law of unintended consequences" (also called the "law of unforeseen consequences") states that any purposeful action will produce some unanticipated or unintended consequences.

This maxim is not a scientific law; it is more in line with Murphy's law as a warning against the hubristic belief that humans can fully control the world around them. Stated in other words, each cause has more than one effect, and these effects will invariably include at least one unforeseen side effect. The unintended side effect can potentially be more significant than any of the intended effects.

The unintended consequences will rear their ugly head in reduced innovation, slower implementation of key initiatives, and more and more red tape. The pendulum has swung to the rules based approach to government with approaches that do not fit within a predetermined and rigid framework are not even considered. The message this sends out is no more innovation, no more calculated risk-taking, just follow the rules.

In 1988, in a report for the Office of the Auditor General (Canada), Otto Brodtrick wrote:

“Well-performing organizations encourage risk taking. They are willing to try new methods when common sense dictates that better results can be achieved by following the spirit of a regulation, instead of the letter. However, staff must hold the values of stewardship, service and results, and they must consult with each other. When their people are governed by these values, the well-performing organizations encourage risk taking as a matter of strategy.”

What Otto put out in 1988 was true then and is even more so today! Let us not lose the spirit of innovation in the stampede to put rules around everything.