Are Leaders Ignoring Second Order Effects?

By | December 3, 2020

[December 3, 2020]  A piece of sage counsel was given to me many decades ago.  Sergeant First Class Owen Roberts said, “Sir, please allow me to give you some advice.  Every order you give your men will create action, and every action they take will have consequences.”  It took me years to figure out what he meant.  He might not have called it this, but his advice was a warning about second order effects.

To illustrate, in the United States during the 1980s, politicians and education experts called for more people to attend colleges and universities.  The more education, the more education was deemed an inherent good.  The high cost of higher education was a significant obstacle; something had to change.  According to the “experts,” student loans were the solution, and a Direct Loan Program was signed into law in 1992.

Increased credit supply meant that people who previously couldn’t afford college now could.  That was what we all wanted.  The second order effect was that tuition more than doubled in two decades.  Furthermore, the value of an advanced degree decreased, and worthless degrees, like gender studies, proliferated.  Now, student debt is becoming a massive drag on the American economy.

These second order effects were mostly predictable.  The politics of student loans still reverberates in our economy.  Today, there is a growing political movement to forgive all student loans and make college free (most at community colleges).  Of course, there is a real cost to the college, and someone will pay the bill.  A common argument is that the lower class will pay their higher-status citizens to attend college.  Is that fair?

“Changing some aspect of a complex system always introduces Second-Order Effects, some of which may be antithetical to the original intent of the change.” – Josh Kaufman

 All of us ignore second order effects and often at our own demise.

My grandmother, Bigmama, often cautioned me about the consequences of my behavior.  I planned to have a fun time, to laugh and play with my cousins.  This happy-go-lucky attitude often got me into trouble with the family.  When I was six or seven years old, several of us accidentally set the grass on fire while playing with matches (we were warned), nearly burning down my grandparent’s home.  Ouch, the consequences hurt, but my lesson was not learned until years later.

What is important here for us is that many leaders ignore second order effects.

Author: Douglas R. Satterfield

Hello. I'm Doug and I provide at least one article every day on some leadership topic. I welcome comments and also guests who would like to write an article. Thanks for reading my blog.

21 thoughts on “Are Leaders Ignoring Second Order Effects?

  1. Dale Paul Fox

    Good article. Most folks may have missed your point when you appropriate call it second order effects. To me, it’s just looking into the future to ensure your ideas don’t have unintended consequences that can’t be fixed.

  2. Darwin Lippe

    Good article, well done! Thank you Gen Satterfield. This is the kind of writing that holds my interest.

      1. Darryl Sitterly

        It goes to show that important, made to think, articles like this do generate interest. Many folks never heard of second-order effects and probably never would have if they had not come here today and read this article. To all those who commented today, thank you. It makes for a better understanding of what this is about. Our discussions help clarify.

  3. Purse 5

    Great comments on what my husband would call a “boring subject.” Yet, the ability to learn about these things comforts me that my ways of thinking do work.

    1. Martin Shiell

      And, that is what this leadership website is all about. Good comment.

  4. Otto Z. Zuckermann

    Another excellent article from the plains of intellectual thinking and arm-twisting. Gen. Satterfield makes me think (sometimes it hurts my head and other times it threatens my upbringing with new ideas). This is what a leadership blog should do. Thanks.

  5. Ed Berkmeister

    How can we become better second-order thinkers?
    Here are some suggestions:
    What is the range of possible outcomes?
    What’s the probability I’m right?
    What’s the follow-on? How could I be wrong?
    Asking more questions opens you to thinking about more possibilities.

    1. Jerome Smith

      Good point Ed. Keep up the good thinking. That is helpful. I have another suggestion as well:
      1. Focus your time and effort on forecasts that will prove rewarding.
      2. Unpack problems to expose assumptions, catch mistakes, and correct biases.
      3. Consider the larger category before looking at the particular case.
      4. Revise your beliefs often, and in small increments, to reduce the risks of both over- and under-reacting to the news.
      5. Find merit in opposing viewpoints
      6. Reject the illusion of certainty and learn to think in degrees of uncertainty.

  6. Willie Shrumburger

    Sometimes, the second order effects are more important than the initial consequence.

    1. Dead Pool Guy

      Right, the point is that to make better decisions, and to take better action, we must consider second-order effects.

  7. Janna Faulkner

    Second order effects. Good topic. More articles like this is good, but where is your humor today, Gen. Satterfield? I like your dry humor the best. 😊

  8. Max Foster

    Excellent article on an overlooked problem. Why? Because it is HARD to think and to predict the consequences of our actions. Like you starting a fire when a child, small children cannot predict the future consequences of their actions. That is why we have experiences that we can learn from. Sadly, many adults do not learn very well or, more likely, adopt ideologies that remove common sense.

    1. Ronny Fisher

      Good point Max. The whole marxist ideology that now permeates society is built upon the foundation that everything that goes wrong with us, is caused by some form of racism, sexism, homophobism, etc. and not due to our own oversight of 2nd order effects.

      1. H. M. Longstreet

        Excellent observation.
        “At a high level of generality, the dogma goes like this: Some group has been systematically oppressed not only by the government but by society at large. And that oppression is the sole cause of their disparate plight.” Wokism? Yeah, I just prefer to call it Marxism.

    2. Eric Coda

      Well said, Max. Once again you’ve hit the nail on the head. But what we “see” is not viewed the same by many others. When you get 24-7 propaganda, you start to believe you are fighting against Nazism. They no longer THINK and that will be our downfall.

      1. Yusaf from Texas

        Sad but true. This is what we’ve become. And, I find this mindset mostly in highly educated young men and women.

    1. Len Jakosky

      Ha Ha. funny this morning, are we, Ms. T? Always good to hear from you!


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