Private equity is supposed to be capitalism at its purest–you make a kill, and you devour it. But it turns out it’s not that simple. As one of private equity’s stars explains in this piece in the New York Times, compensation issues can cloud anyone’s judgment and get executives to make bad decisions. While those problems may be more acute in large companies, with their complicated political environments, it seems that no one is immune.

That’s worth pondering as Congress and regulators debate how to restructure bankers’ pay to keep the financial industry from incurring undue risks. Our bet is that, no matter what plan is eventually produced, some smart guy–or, more likely, whole bunches of smart people–will find a way to get around the plan and will produce strategies so distorted by extraneous factors that they are bound to fail.

The only way we know of to head off those obviously wrong strategies is to encourage dissent and to get objective perspective from outside the organization, through a mechanism such as our Strategic Stress Test.