24 June 2009 • 8:05 am

SUVs and the Law of Unintended Consequences

SUVs have become an icon for the regret some of us share for our recent history. Their inefficient use of fuel has increased U.S. dependence on foreign oil, and shrinking demand has pushed the once mighty U.S. auto industry and economy to the brink. SUVs were popular because people felt safe in them. But they were wrong.

Back in 2004, Malcolm Gladwell (staff writer for the New Yorker and author of The Tipping Point, Blink, and Outliers), published an article in the New Yorker called Big and Bad – How the SUV ran over automotive safety. Gladwell is one of my favorite writers; he is able to present obscure and arcane research in a way that is interesting, understandable, and relevant, and Big and Bad is no exception. I saved the article and have occasionally referred to it in client workshops and speaking engagements, to illustrate how our gut beliefs can be far from the truth. But recent circumstances have made his article even more relevant as an illustration of the law of unintended consequences.

The article relates facts and observations that aren’t necessarily well-known or understood:

  • Since SUVs are classified as trucks, they don’t have to comply with two key sets of regulations that apply to cars, fuel efficiency and safety.
  • Because trucks don’t have crumple zones and unit-body construction (Gladwell describes the Ford Expedition as essentially a Ford F-150 pickup truck with an extra set of doors and seats), they are far easier and cheaper to build than cars.
  • Despite an estimated manufacturing cost of only about $24,000, Ford introduced  the Expedition at $36,000, and demand was far higher than Ford anticipated. By the late 1990s, Ford’s Michigan Truck Plant had become the most profitable factory of any industry in the world.
  • Focus groups revealed that consumers liked SUVs’ elevated driving position, and that buyers thought that big, heavy vehicles were safe.
  • But SUVs aren’t as safe as other vehicles. Minivans, with their unit-body construction, do far better in accidents than SUVs. And with their greater weight, SUVs are far less maneuverable than smaller cars, and thus less able to avoid accidents in the first place.
  • In a small car, a driver is constantly reminded of the necessity of driving safely and defensively. In an SUV, the driver is above the road and therefore less cognizant of road hazards, resulting is riskier and less defensive driving.

In short, SUVs became popular because people felt safer in them, and that popularity was very profitable for car manufacturers. But that safety was an illusion. Intrigued? Dubious? Read Gladwell’s article here.

The law of unintended consequences tells us that any purposeful action will produce unexpected outcomes and impacts, and the history of SUVs sure illustrates that. At the micro level, drivers who intended to drive safer cars wound up in cars less safe than the alternatives, and paid more for their transportation.

But there have also been profound unintended consequences at the macro level. Auto makers who sought and obtained the truck exemption to fuel economy and safety standards, got massive short-term profits and long term vulnerability (to the point of bankruptcy for GM and Chrysler) from their excess dependence on SUVs for corporate profits. The U.S. government, seeking to bolster the U.S. auto industry by providing the exemption was instead complicit in bringing that industry to the brink of collapse in the wake of higher fuel prices, economic downturn, and evaporating demand for SUVs. And the government’s intent to reduce vehicle emissions created a vehicle class that pollutes more per passenger mile than automobiles. And the resulting demand for fuel has certainly had unintended consequences on the U.S. economy and its foreign policy.

The law of unintended consequences is inescapable, but organization leaders and strategists should heed the lesson. They should carefully examine their strategic objectives to answer the question, “What else will happen as a consequence of our success with this objective?” Those leaders should frequently measure and monitor the result of change in their organizations to quickly identify and respond to those unintended consequences.

Do you have an example of the law of unintended consequences in your organization? Please share it in your comments below.

Comments are closed.