Avoiding the ‘Cobra Effect’: How to implement policy changes successfully

Organisational change is inevitable—whether it involves new structures, processes, or policies. However, even the most well-meaning changes can backfire if not executed carefully. A vivid example of this comes from the ‘Cobra Effect’ during British colonial rule in India. In an attempt to reduce the cobra population, the government offered rewards for dead snakes. At first, it seemed like a smart move, but soon, people started breeding cobras to claim the rewards. When the policy was scrapped, the cobras were released, making the problem worse than before.

This story reveals an essential truth: if policy changes aren’t handled well, they can lead to unintended consequences, often worsening the very issues they were meant to solve. So, how do organisations navigate such transitions smoothly, ensuring that new policies are embraced rather than resisted?

For Pallavi Poddar, CHRO, Fenesta Windows, the answer lies in a feedback-driven approach. Before rolling out any significant changes, Fenesta gathers insights from employees at all levels—from corporate executives to field staff. When the company introduced a new flexible work policy, they first listened to feedback from across the organisation, ensuring the final policy catered to the diverse needs of their workforce. The result? A smooth transition, with employees feeling more engaged and productivity seeing a positive uptick. As Poddar puts it, “The quality of any change lies in its simplicity. Employees need to understand the change for it to work.”

“At Max Life, a ‘grandfathering’ approach was used during a policy transition, ensuring that existing employees retained their old benefits while new employees would adopt the updated policy. This eased concerns and created a sense of fairness, softening what could have otherwise been a difficult shift.”

Shailesh Singh, CPO, Max Life Insurance

Clear communication is another cornerstone of successful change. Shailesh Singh, CPO, Max Life Insurance, stresses the importance of explaining the ‘why’ behind any policy shift. When employees understand the reasons for change, they’re more likely to support it. Max Life Insurance experienced this firsthand when they updated an outdated employee benefit. Rather than imposing the change abruptly, Singh’s team explained the rationale behind the move, helping employees adjust without resistance.

Rishav Dev, head, talent acquisition, Century Plywoods, shares a similar perspective. “When people understand whether a policy is driven by regulatory needs, restructuring, or performance improvements, it becomes their change too,” he notes. Context makes all the difference.

Involving employees early in the process can also help curb resistance. At Max Life, a ‘grandfathering’ approach was used during a policy transition, ensuring that existing employees retained their old benefits while new employees would adopt the updated policy. This eased concerns and created a sense of fairness, softening what could have otherwise been a difficult shift.

“Before rolling out any significant changes, Fenesta gathers insights from employees at all levels—from corporate executives to field staff. When the company introduced a new flexible work policy, they first listened to feedback from across the organisation, ensuring the final policy catered to the diverse needs of their workforce. The result? A smooth transition, with employees feeling more engaged and productivity seeing a positive uptick.”

Pallavi Poddar, CHRO, Fenesta Windows

Another strategy for ensuring smooth policy transitions is piloting changes before rolling them out organisation-wide. This allows for real-world adjustments. Dev suggests starting at the top: “If you want to change a performance system or pay structure, begin with leadership. Once the leaders adopt the change, employees are more likely to follow.” Leading by example creates a ripple effect, turning what could be seen as a disruption into an opportunity for improvement.

Leadership’s role goes beyond simply endorsing change; it’s about fully owning it. As Dev recalls from a previous role, when he introduced a variable pay system, he knew the company wasn’t yet prepared for such a policy. Before rolling it out, he worked on building the infrastructure and culture to support it, ensuring that employees saw the benefits before experiencing the challenges. “People need to see the carrot before they accept the stick,” he says.

Once a change is implemented, measuring its success becomes crucial. Poddar emphasises setting clear metrics early on. “You need to know how a policy will impact the organisation over time—whether it’s three months, six months, or a year down the road.” Monitoring the results helps catch any potential issues before they snowball. She recalls how a financial services firm that introduced a digital tool for customer management saw a spike in customer complaints six months later, all because employees hadn’t been properly trained. Quick intervention saved the situation, but the lesson was clear: continuous evaluation is key.

“If you want to change a performance system or pay structure, begin with leadership. Once the leaders adopt the change, employees are more likely to follow.”

Rishav Dev, head, talent acquisition, Century Plywoods

At the heart of any successful policy change is the idea that change isn’t just about new rules—it’s about creating a shared sense of purpose, ownership, and understanding. Leaders must guide their teams through transitions by fostering open communication, involving employees early, and being strategic about how and when changes are implemented. By doing so, organisations can turn what might seem like a daunting shift into a success story, avoiding the pitfalls of the past while building trust for the future.