The target beats the rule
- The ruleno account unaskedThe targeteight per household
Picture a bank branch in America with a rule: never open an account the customer did not ask for. On the same wall is a target: eight products per household; the boss said eight was chosen because it rhymed with great. Staff who missed it were told their jobs were at risk. The rule and the target pointed opposite ways.
- up to 3.5 millionAccounts not asked forabout 5,300Staff sacked
This is Wells Fargo, one of the biggest banks in the country. Between 2009 and 2016 alone, staff opened as many as 3.5 million accounts and cards that customers may not have asked for, to hit the targets; the practice went back to 2002. Over five years the bank sacked about 5,300 staff for it, and kept the targets.
- The rule5,300 sacked for breaking itThe targetkept
The bank sacked 5,300 staff for breaking the rule, and kept the target. Which of the two did the hands follow?
Both. Most staff did nothing wrong.
Not yet. Most staff were not sacked, and the question is what moved the hands that broke the rule. It was the number they were measured by, every morning.The rule. 5,300 people were punished for breaking it.
Not yet. Punishment after the fact is a record that the rule lost. Hands kept opening accounts because the target was still on the wall and the pay still followed it.The target. Pay and jobs followed it, and 5,300 sackings did not change that.
Right. Each sacking was a record that the rule had lost again. The target stayed on the wall, the pay stayed tied to it, and the next hand followed it. - Target on the screenManager asks dailyPay follows itHand follows it
Here is the mechanism. A rule is read once. A target is read every morning: on the screen, in the manager's question, in the pay. People call the example the bosses set, by what they do and what they reward, the tone from the top. When what is rewarded disagrees with what is written, the hand follows the reward.
Set how hard the target is and how much of a worker's pay depends on it. See how many of 100 staff open an account nobody asked for. Made up to show the shape.
0 of 100
of 100 staff who cheat
The target: Easy · Pay tied to it: None
Easy target, none of the pay tied to it: 0 of 100 open an account nobody asked for.
1 of 100
of 100 staff who cheat
The target: Easy · Pay tied to it: Some
Easy target, some of the pay tied to it: 1 of 100 open an account nobody asked for.
5 of 100
of 100 staff who cheat
The target: Easy · Pay tied to it: Most
Easy target, most of the pay tied to it: 5 of 100 open an account nobody asked for.
1 of 100
of 100 staff who cheat
The target: Hard · Pay tied to it: None
Hard target, none of the pay tied to it: 1 of 100 open an account nobody asked for.
5 of 100
of 100 staff who cheat
The target: Hard · Pay tied to it: Some
Hard target, some of the pay tied to it: 5 of 100 open an account nobody asked for.
15 of 100
of 100 staff who cheat
The target: Hard · Pay tied to it: Most
Hard target, most of the pay tied to it: 15 of 100 open an account nobody asked for.
2 of 100
of 100 staff who cheat
The target: Impossible · Pay tied to it: None
Impossible target, none of the pay tied to it: 2 of 100 open an account nobody asked for.
20 of 100
of 100 staff who cheat
The target: Impossible · Pay tied to it: Some
Impossible target, some of the pay tied to it: 20 of 100 open an account nobody asked for.
50 of 100
of 100 staff who cheat
The target: Impossible · Pay tied to it: Most
Impossible target, most of the pay tied to it: 50 of 100 open an account nobody asked for.
When is the target harmless?
When it is easy.
Not yet. An easy target with most of the pay riding on it still gets 5 of 100 cheating: a few people cheat for any bonus. The pay is the lever. The difficulty is how hard it is pulled.When nobody's pay depends on it, however hard it is. A number with no pay behind it is a wish.
Right. The left column never passes 2 of 100, even at impossible. The pay is the lever; how hard the target is only sets how hard the lever is pulled.Never. Targets always cause cheating.
Not yet. With no pay tied to it, even the impossible target got 2 in 100. The target on its own does little; the pay behind it does the rest.Move both controls.
- 2016 fine$0.18 billion2020 settlement$3 billion
In 2016 the watchers fined the bank $185 million and the chief executive resigned. In 2018 America's central bank, the Federal Reserve, which watches the biggest banks, told the bank it could not grow until it had fixed itself. In 2020 it paid $3 billion more, and the former chief executive was fined $17.5 million and banned from banking.
The 2018 order said the bank could not grow any bigger until the watcher was satisfied. How long did that order last?
Pick one. Nothing is scored.
February 2018: no growthJune 2025: liftedAbout seven years.From February 2018 to June 2025, more than seven years. A fine is paid once and is over. This order had no end date. It lasted until the watcher was satisfied the bank had fixed itself, and that took longer than either fine took to pay.Three things on the wall. Tap the one that, changed on its own, would have stopped the most accounts.
Tap the part of the picture that answers it.
The ruleThe targetThe pay tied to itThe pay tied to it
Right. Cut the link between the target and the pay, and the balance step says the cheating falls to a handful whatever the target. The rule and the target can both stay on the wall.The rule
Not yet. The rule was already there, and 5,300 people were sacked under it. Making it stricter changes a sentence that was already losing.The target
Not yet. Making the target easier helps, and the frames say it helps less than cutting the pay from it. An easy target with most pay on it still gets 5 in 100; with no pay on it, even an impossible target gets 2.- The rulenever speedThe roundonly possible at 50The payper parcel
A delivery company has a rule: never drive over the speed limit. Drivers are paid per parcel, and the round is only possible at 50 in a 30 zone. From this lesson, what happens?
The company is fine. It has the rule in writing.
Not yet. A written rule is the first of lesson 7's three things. The watcher will ask whether it worked, and a round that is only possible at 50 proves it could not.The drivers obey. A law beats a company target.
Not yet. The speed limit is a law, and opening an account nobody asked for broke American law too. The hand did not read the law; it read the pay.The drivers speed. The pay follows the parcels, so the hand follows the parcels.
Right. The round is the target and the pay is tied to it. The rule is read once; the parcel count is read all day.
Lesson complete
When a target and a rule disagree, the hand follows whichever one its pay follows.