The First Consequence Is Rarely the Last

If we lower the price of a product, we'll sell more. That's probably true... and it can also be where the thinking stops.

A lower price doesn't just increase demand. It also reduces the profit made on every product sold. Production may need to increase with all that implies for resourcing that increase. Increased demand may tie up Cash in Receivables and Inventory. Competitors may respond. Customers may begin to think differently about the product. And before long, a sensible decision with a clear outcome has become a lot more complicated.

The first consequence is rarely the last.

Perhaps that's one of the reasons good commercial judgement is so difficult. Most decisions don't produce a single outcome. They change a system.

We see this everywhere.

As parents, our instinct is often to protect our children from disappointment. In the short term that may make them happier (and us too). But if we remove every setback, do we also remove opportunities to develop resilience, independence and confidence? The first consequence may be exactly what we wanted. The longer-term consequences, perhaps not.

Medicine offers another example. Antibiotics have saved millions of lives. Their immediate benefit is beyond question. Yet widespread use has also encouraged antibiotic resistance, making some infections harder to treat in the future. A remarkable medical breakthrough changed the system in ways that nobody wanted, but perhaps should have expected.

Business is just the same. And so commercial judgement often begins with a different question: And then what?

If we improve this measure, what becomes worse?

If our competitors respond, what changes?

If customers behave differently, what happens next?

If this works as we hope, what new problems (or opportunities) might we create?

The interesting thing about business simulations isn't that participants make mistakes. It's that they discover how quickly one decision spreads through an entire business.

A team lowers price and celebrates increased sales, only to discover profits have fallen. Another invests in product development, only to find themselves short of cash. A third cuts costs and improves this year's results before discovering that future quality, staff retention or customer satisfaction have deteriorated.

None of the outcomes were random, they were each the consequence of an earlier decision. And each consequence became the cause of something else. Perhaps that's the real value of simulation. It allows people to experience chains of consequence that might take years to unfold in the real world.

The decisions feel real. The consequences feel real. But the costs of discovering them aren't. Good commercial judgement isn't simply about making decisions. It's about developing the habit of looking beyond the first consequence.

Because the first consequence is rarely the last.