Misaligned Incentives Are Almost Always Behind Misaligned Teams

Let me tell you about a company that looked like it had it all: strong product team, experienced marketing, and a sales org that could close. But six months into a “go big” campaign, everything started dragging: missed targets, infighting across departments, and a roadmap stretching into irrelevance. On paper, they were aligned. OKRs matched up. Weekly cross-functional meetings happened. But nothing shipped on time. Everyone pointed fingers.

When I came in to help unstick it all, I asked a few basic questions - what does success look like for you? What do you get rewarded for? Where does your bonus come from?

The answers were hilarious - if you find corporate dysfunction funny. The VP of Marketing was measured on lead gen volume, no matter the quality of those leads. The Product team was rewarded for hitting roadmap delivery, even if no one used what they shipped. Sales? Purely quota-based - close anything, even if it's a terrible fit. And then execs sat around wondering why CAC was ballooning and retention was garbage.

This isn’t a rare story. It happens in startups and Fortune 500s. It’s not a seniority issue - it’s a design issue. Misalignment in incentives makes your culture look dysfunctional, even if you recruited A-players.

Why Incentives Eat Culture for Breakfast

People don’t do what you say. They do what you pay. Incentives beat values every time. When teams have different incentives, they’ll naturally drift - not because they don’t care, but because they’re actually doing their jobs according to their own scoreboard.

We see this play out in all kinds of quiet collisions:

• Product wants to slow down to launch quality. Sales needs velocity.
• Marketing wants broad reach. Customer success wants product-qualified leads only.
• Engineering wants stable infra. Leadership is pushing for risky bets.

Each of them is “right” - but only if you measure from their own incentive lens.

Other Symptoms (and Excuses) That Hide the Real Issue

Sometimes this shows up as a process argument: “We need better documentation.” Or a personality clash: “They just don’t collaborate well.” Or a structure issue: “We lack a clear DRI.”

Sure, improving communication helps. But it’s like cleaning up spilled oil while the pipes are still leaking. If underlying incentives reward the wrong thing, those nice new processes will just get gamed or ignored.

Still not convinced incentives sit at the root? Here are signs you’re probably reward-wiring your team for misbehavior:

• Team crushed an OKR… that did nothing for the business
• People hoard wins, but hide risk
• High visibility projects get priority… even if they don’t matter
• You hear “that’s not my job” more than “what’s the right thing to do?”
• Bonuses are tied to lagging indicators like revenue, but the team has no control over pricing or LTV

And yes, sometimes the opposite happens too. As I talked about in this piece on accountability being a team sport, if shared goals become no one's goals, it's just as broken.

So What Does Fixing It Actually Look Like?

Aligning incentives starts with clarity. Not alignment theater. Not a slide deck. But surgically clear definitions of:

• What does success look like, this quarter?
• Who owns what part of the value chain?
• What's the fastest path to ROI - not effort?
• And crucially, what gets rewarded vs. tolerated?

Now, this can sound abstract. So let’s get real on what to actually do.

Fix #1: Stop Rewarding Inputs

Way too many orgs reward effort. Busyness. Story points. Lead volume. Feature count. “Launched” milestones.

That’s BS.

Start tying rewards to outcomes - the business and customer kind. I’ve helped teams make this pivot by reframing metrics:

• From “deploy X new features per quarter” → “improve adoption of core workflows”
• From “generate 10,000 marketing leads” → “deliver X marketing-qualified pipeline lift”
• From “ship the roadmap” → “increase 2nd-month retention among target persona”

Change the target, change the actions.

Fix #2: Make Incentives Cross-Functional

Nobody wins alone. So the incentives shouldn’t be siloed. If Product hits goals while Sales flops, no one should be celebrating.

Look at your comp plans, reviews, and bonus structures. If they isolate teams, you’ll breed conflict.

Instead, try shared incentives tied to end-to-end goals:

• Revenue per retention cohort
• NPS from new buyers
• Time to value for top three GTM personas

If Marketing doesn’t win unless Product wins - and vice versa - amazing things happen.

Fix #3: Incentivize Learning Fast, Not Being Right

This one’s personal. I’ve seen the cost of perfectionism. Teams afraid of failing don’t push into uncertainty. They overthink, under-ship, and slow everything down.

As I discussed here in when to move on from your product idea, killing the wrong idea quickly is a win, not a loss.

So if you’re in a product-led org, reward learning rate. Make it OK to kill a test early, share a dead-end experiment, or pivot fast. Praise reps who tried something smart - even if it didn’t pan out.

Instead of making “being right” the reward, make “identifying what’s worth pursuing” the reward.

Fix #4: Build Feedback Loops, Not Just Goals

You need fast loops between efforts and outcomes. If the team doesn’t know what impact their work had - positive or not - they’ll keep guessing.

Some fixes:

• Weekly MVP reviews with real usage data
• Quick retros tied to customer behavior, not task completion
• Bonuses partly tied to “speed of iteration” metrics like test cycles or time to learning

As I walk through in this case study on converting product insight into growth, growth comes from iteration, not from perfect plans.

And if you want a healthy product team scoreboard? Tie incentive to validated insight creation - not just feature delivery.

Quick Comparison: What Misaligned vs. Aligned Incentives Look Like

I Coach Leaders Through This Weekly

This isn’t some theoretical consulting framework. I walk this road weekly with exec teams, startup founders, and VPs who want performance without pain. Sometimes I’m brought in after others gave up. “Our teams don’t talk.” “It’s a personality clash.” “They all feel busy, but nothing’s landing.”

Nine times out of ten, we trace it back to incentives set 3 - 12 months earlier. The hooks were baked into bonus plans, OKRs, title-growth requirements, or investor updates.

Rewriting that wiring is emotional. But it works. The team starts rowing in the same direction. Metrics normalize. Meetings don’t feel like blame-trading. Growth feels earned again.

If you're managing misaligned orgs, read this too: how to lead a multi-level organization by stop controlling and start coaching.

You can’t “pep talk” your way out of a misincentivized work system.

Final Thought: You Already Have Incentives. They're Just Invisible.

Even if you think your team isn’t reward-motivated, they are. Maybe not by cash. But by status. Influence. Time freedom. Scope. Recognition. That’s all incentive.

So the question isn’t whether you're incentivizing people. It’s whether those invisible incentives line up with the outcomes you actually want.

Here’s your challenge: this week, ask your directs:

• “What are you actually getting rewarded for?”
• “What metrics do you feel pressure to hit?”
• “Where do you feel friction with other teams?”

The answers will show you where your silent misalignments live.

Make incentives visible. Align them with what matters. And watch the cohesion snap back into place.