Transcript
Welcome to Iconoclast Insights – your podcast for straight talk, critical thinking, and change with conviction.
I'm André Daus – coach, consultant, and someone who enjoys swimming against the current when that current is obviously flowing in the wrong direction. Today we're tackling a topic that's been haunting me for years – professionally, personally, and politically:
The belief that better rules create better behavior.
I think this is one of the biggest misconceptions of our time. And I want to show you today why it's not just naive, but often produces exactly the opposite effect.
The Reflex for Rules
Whenever something doesn't work in our society, the same thing happens: "We need new rules!"
Whether it's about economics, environment, education, or technology – the first impulse seems to be: "There must be a law against that!"
And at first glance, that sounds reasonable. Rules provide guidance, create order, establish fairness.
Or do they?
I say: No.
Because this reflex completely misunderstands how people actually function.
Rules Appeal to the Brain – But Incentives Drive Behavior
People don't follow the spirit of a rule. They don't follow the noble intention that a piece of legislation formulates.
People follow the reward.
Or to put it differently: We don't do what's right – we do what pays off. And this has nothing to do with laziness or malice. It's simply smart energy economics. We're programmed to weigh effort against return. And we do this even when we actually want to do something good.
A few examples?
- Students don't learn for life – they learn for grades.
- Sales teams increase revenue – even when profits suffer.
- Finance departments shuffle expenses between CAPEX and OPEX just to make the numbers look better.
- Engineers optimize for benchmarks – not for actual usage.
And this isn't because of the people. It's because of how we measure, what we reward, and what we align our systems toward.
Every Rule System Creates Its Own Loopholes
Now you might say: "Then let's just make better rules – ones that prevent exactly that."
But that's where the next misconception lies. Because:
Every rule automatically creates a loophole.
This isn't a bug – it's a feature. Because people are creative. And because they don't use systems as they're intended – but as they work best.
A practical example: MiFID.
A European regulatory framework designed to protect customers when buying securities. Sounds good.
What happened?
Banking practices barely changed.
What did change: The documentation. More forms, more disclaimers, more mandatory fields. So much that no normal person reads or understands it anymore. Customers are supposedly better informed – but actually overwhelmed. The goal was protection. The result: bureaucracy. And nobody is really safer.
Rules Don't Make Things Better – They Make Them Narrower
Or take urban traffic as an example:
In many major cities, parking spaces and car lanes are removed so people will switch to public transport.
The idea behind it: "If driving becomes more inconvenient, people will switch."
But reality is different.
The cars don't disappear.
They clog other streets, block driveways, park on sidewalks. As a result: Traffic gets worse – not better.
Why? Because humans don't make rational optimization decisions, but emotional and practical ones.
If the car – despite traffic jams – is more comfortable and predictable than bus or train, nothing will change. Rule or no rule.
Another Example: Tech Regulation Between Environment and Progress Brake
Another example of well-intentioned but ultimately counterproductive regulation is the handling of technology – especially under the label "environmental protection."
Electric mobility is massively promoted. Conventional vehicles are more heavily taxed. Charging infrastructure is missing in many places.
The ecological backpack of lithium, rare earths, and battery production is rarely fully considered.
But it gets even more absurd with small electronic devices – like smartphones or laptops.
The EU has legally mandated which connector a device must have: USB-C.
That sounds sensible at first – less electronic waste, fewer chargers.
But when a law specifically names a particular connector, it means in practice: Technological advancement in this area is legally blocked.
Apple, for example, can no longer use its own Lightning connector – even though it wasn't technically inferior. And anyone who would develop a new, better connector technology couldn't use it in Europe as long as the law isn't amended.
This is regulation as progress prevention. And it comes dressed in green – under the guise of environmental protection. But actually, it's often about control rather than innovation.
The Equality Trap: Why One-Size-Fits-All Fails
There's another reason why so many people believe so strongly in rules: They want to create equality with them.
Everyone should be treated the same. Objectively. Neutrally. That sounds fair. And it sounds inclusive.
But in reality, it doesn't work.
Because: People aren't equal. They're different – in abilities, prerequisites, perspectives, needs.
And rigid rules ultimately favor only a few – namely those who happen to fit exactly into the framework.
If we really want inclusion – and not just as a buzzword – then rules can't treat everyone the same, but must enable flexibility.
The fear of supposed unequal treatment shouldn't lead us to treat everyone equally badly.
Yes, this creates loopholes. And yes, there will be situations that don't appear "fair" in the formal legal sense.
But honestly: Isn't it better to have a solution that works for most people – than a rule that brings the most disadvantages for all people?
A Personal Example
At my children's school, there used to be no fixed mobile phone rule. Usage wasn't encouraged, but usually handled situationally.
Then the student council decided: There are now clearly defined phone zones.
What happened?
Teachers were happy about the clarity – finally a rule!
At the same time, they now had to enforce every violation.
The atmosphere became more rigid, conflicts increased.
Before, pedagogical discretion was possible – now there's the rule and that's it.
What was lost here was relationship. Trust. Maturity. And this happens everywhere rules replace thinking.
What's the Alternative?
I don't believe rules are fundamentally bad. But I profoundly believe they're no substitute for thinking. And certainly not for responsibility.
Good systems don't ask: "How do we prevent misconduct?" But rather: "How would a smart, lazy person exploit this system?"
And then they build mechanisms that:
- Distribute rewards in a differentiated way
- Don't delegate responsibility, but demand it
- Convey principles instead of making detailed specifications
What we need are clear principles, not detailed regulations. We need responsibility instead of abandoning thought. And we need genuine discourse instead of symbolic regulation.
The Real Question We Should Ask
Here's what I want you to take away: When you're in your company, your team, your organization, and you're currently trying to improve behavior through new rules – please ask yourself:
- What is actually being rewarded by this rule?
- Which doors are being closed by it?
- And how could a system look that relies on trust, responsibility, and principles instead of control?
The question isn't whether we need rules at all. The question is: Do our rules recognize how humans actually function? Do they account for the fact that people optimize for what's measured and rewarded?
Or do they assume people will magically follow the spirit of the law while ignoring the structure of incentives?
My Challenge to You
If you want thinking to happen again in your organization instead of just compliance, if you want people to take responsibility instead of hiding behind regulations, then start with this question:
"If I were clever but lazy, how would I game this system?"
Build your incentives around that answer. Create multiple, independent metrics that balance each other out. And remember: The goal isn't to prevent all possible abuse – it's to make the right behavior easier than the wrong behavior.
Closing
That was Iconoclast Insights. If you enjoyed this episode, please share it. Or better yet – discuss it with someone who's currently about to introduce a new rule.
Because change doesn't begin with paragraphs – but with a thought. If you want thinking to return to your organization instead of just following orders, I'm happy to support you as a consultant or coach. Thanks for listening – and until the next episode.
