How to fix Lock timeout exceeded in PostgreSQL

SHOW lock_timeout;

SELECT
  blocked_locks.pid AS blocked_pid,
  blocked_activity.usename AS blocked_user,
  blocking_locks.pid AS blocking_pid,
  blocking_activity.usename AS blocking_user,
  blocked_activity.query AS blocked_statement,
  blocking_activity.query AS blocking_statement,
  blocked_activity.application_name AS blocked_application,
  blocking_activity.application_name AS blocking_application
FROM pg_catalog.pg_locks blocked_locks
JOIN pg_catalog.pg_stat_activity blocked_activity ON blocked_activity.pid = blocked_locks.pid
JOIN pg_catalog.pg_locks blocking_locks ON blocking_locks.locktype = blocked_locks.locktype
  AND blocking_locks.database IS NOT DISTINCT FROM blocked_locks.database
  AND blocking_locks.relation IS NOT DISTINCT FROM blocked_locks.relation
  AND blocking_locks.page IS NOT DISTINCT FROM blocked_locks.page
  AND blocking_locks.tuple IS NOT DISTINCT FROM blocked_locks.tuple
  AND blocking_locks.virtualxid IS NOT DISTINCT FROM blocked_locks.virtualxid
  AND blocking_locks.transactionid IS NOT DISTINCT FROM blocked_locks.transactionid
  AND blocking_locks.classid IS NOT DISTINCT FROM blocked_locks.classid
  AND blocking_locks.objid IS NOT DISTINCT FROM blocked_locks.objid
  AND blocking_locks.objsubid IS NOT DISTINCT FROM blocked_locks.objsubid
  AND blocking_locks.pid != blocked_locks.pid
JOIN pg_catalog.pg_stat_activity blocking_activity ON blocking_activity.pid = blocking_locks.pid
WHERE NOT blocked_locks.granted;

SELECT pg_terminate_backend(pid) FROM pg_stat_activity
WHERE pid != pg_backend_pid()
  AND state = 'active'
  AND query_start < NOW() - INTERVAL '30 minutes';

SET lock_timeout = '30s';

ALTER ROLE myuser SET lock_timeout = '30s';

-- Bad: Long transaction holding locks
BEGIN;
SELECT * FROM large_table;
-- ... application processing ...
UPDATE small_table SET col = value;
COMMIT;

-- Good: Short transaction with lock
BEGIN;
UPDATE small_table SET col = value;
COMMIT;