Undeniable truth

Following is reprinted from our client newsletter, "The Pointe." Based on the high direct response rate, we're posting a copy to share more widely. Thanks for continuing to read, JG.

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Lost within the AIG bonus and big banking mess lies an undeniable truth. You can't dictate proper behavior.

Rules don't create an incentive to do things. Penalties provide a deterrent but only when enforced, which hasn't been the case for a while now. Rules or laws create boundaries, which lead to limits, which have been extended now more than ever by a system that many believe to be gamed to benefit the rich and powerful. When those limits cross the highly discretionary line of good vs. bad, well, you get outrage -- followed by dust-ups -- followed by settling -- followed by more of the same with the cycle repeating over and over.

More often than not, rules create a set of unintended consequences that fall so far outside the lines that we're left scratching our heads as to why. Enter the highly charged pinata issue called executive pay. Whether it's a deified CEO or his/her underlings, outrage over excessive compensation has no limit. Yet every time the government offers up a new rule or reform, you can almost see bands of brothers heading underground to devise new ways around the rules.

Compounding this situation are so called leaders who feel the need to impose their will on others vs. doing the hard work that they should be doing: Aligning beliefs and values of diverse constituencies to create better modes of behavior. We could throw the whole lot of politicians and their appointees in this pool and try to drown them, but that seems a little over the top. They think more laws and regulations are the fix when history shows that approach rarely works. Dov Seidman, author of "How", sums it up this way: "Laws tell you what you can do. Values inspire in you what you should do."

Back to Earth, or Main Street. It's a leadership responsibility to model proper behavior within our companies and organizations. Simple enough, right? Well, not exactly. But it's generally where the buck starts and stops -- not whether another policy can be jammed down people's throats.

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