The seal of the United States Department of th...
Image via Wikipedia

I’ve said it before and I will say it again . . . all this talk of regulation as the answer is disturbing.  We have no chance in the US to compete globally unless we realize that more monitoring and inspection is not the answer.  We stand a rare chance of having the same type of crisis as the one we just had.

Seriously, the problem with regulation is expensive monitoring to achieve “gotcha moments.”  It sounds very desirable at the moment, but it is a red herring.  The central issue of targets, incentives and rewards is missed.

Targets, incentives and rewards drive wrong behavior and less profits.  The country of working together has turned into throwing everyone under the bus to achieve stardom and wealth.  This thinking has made us unable to compete on a global scale.

W. Edwards Deming taught us that incentive pay and rewards leads to trouble for any system.  Accompanied by targets we have Machiavellian managers running around creating chaos to hit their numbers while the ship sinks.  Correct the thinking around compensation and the regulation conversation becomes moot.

In my open letter to Treasury Secretary Geithner I asked that he only regulate those banks that had these types of incentive-based compensation systems.  The others wouldn’t require such as their focus would be to improve service and innovation with the focus on the customer and not themselves.

I haven’t heard back from Mr. Geithner and I suspect he has other worries (like AIG among them).  But for the financial institutions caught up in this there is the promise of greater financial reward and profits with different thinking.

Leave me a comment. . . share your opinion!  Click on comments below.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Download free from “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at [email protected].  Reach him on Twitter at or LinkedIn at