organization
Incentive design as system change
What gets measured and rewarded determines what people actually do. Incentive design is the most powerful lever for systemic change because incentives operate continuously, automatically, and at scale — shaping behavior across the entire organization without requiring individual intervention. But incentives are also the most dangerous lever because poorly designed incentives produce precisely the behavior they measure, including the dysfunctional side effects of optimizing for the measured dimension at the expense of unmeasured dimensions. Goodhart's Law — "When a measure becomes a target, it ceases to be a good measure" — is the central challenge of incentive design.