Monday, June 10, 2013

The Importance of Incremental Change

There is a reason we make most changes in small increments, especially at first. When we attempt larger changes, even on the level of 5 percent at a time, it is hard to imagine what will happen.

The U.S. austerity budget is an example. This 5 percent change, scheduled years in advance, nevertheless has not gone the way most people envisioned. Budget analysts are somehow surprised at how much is being paid in unemployment compensation to furloughed workers, canceling out part of the budget savings. The indirect effects are also larger than politicians predicted, especially when you look at private sector job cuts. We knew that would happen but many are surprised at how large the impact is.

It is the same with almost anything you want to change. With incremental change, you can manage the process of change and make adjustments as you go along. With large-scale change, you instead have to spend an extended period of time mopping up where things went wrong.