Why do smart executives make decisions they know will damage the companies they lead?
Incentivized to Fail examines a deceptively simple answer: organizations often reward the very behavior that undermines their long-term success.
Through major corporate case studies and decades of evidence, we explore how executive compensation structures can transform rational, capable leaders into short-term decision-makers. When bonuses, stock awards, vesting schedules, and performance metrics reward immediate financial results, investments whose value takes years to develop can become personally irrational, even when they are essential to the company's future.
The consequences reach far beyond executive pay. Research and development gets cut. Experienced employees disappear. Customer relationships deteriorate. Long-term investments lose out to quarterly targets. Stock buybacks compete with productive investment. And companies that once seemed nearly impossible to defeat can gradually dismantle the capabilities that made them successful.
Drawing on examples including Intel, Boeing, GE, Sears, Kodak, and other major companies, Incentivized to Fail traces the recurring pattern behind corporate decline and asks a more useful question than who made the wrong decision: What made the wrong decision rational for the person making it?
The book also provides a practical framework for recognizing compensation structures that encourage short-term optimization, identifying warning signs before the consequences become obvious, and evaluating whether executives are truly rewarded for creating sustainable value.
Incentivized to Fail is for business leaders, investors, employees, board members, and anyone who has watched an organization make an obviously destructive decision and wondered: Why would they do that?
