Category 29
Organization Design: Decision Rights, Incentives, and People
Who decides, what gets measured, and what it pays.
- 6 modules
- 36 lessons
- ~8h total
What this category covers
A company is a machine for making decisions, and the org chart is the only part of it anyone draws. This category is about the rest of the machine: who owns which call, what gets measured, and what the measurement pays — three dials that set behaviour long before any values statement does. It runs in sequence, from how a company decides, to the incentives that quietly argue with those decisions, to the coordination cost of having more than one team, then hiring, then managing the people you hired, and finally the failure modes that outlive all of it. It is written for whoever has to design the system rather than complain about it: a founder crossing fifty people, a manager who just inherited a team, an operator wondering why a plan everyone agreed to never happened. Expect it to be uncomfortable in places — most organizational problems are incentive problems wearing a personality problem's clothes.
How a Company Decides
Incentives and Agency
- Designing Variable Pay That Survives Contact with Reality
- Goodhart's Law and Metrics That Get Gamed
- The Multitask Problem and Why Paying for One Thing Kills the Other
- Relative Performance Evaluation and Tournament Pay
- Quotas, Accelerators, and the Ratchet Effect
- Relational Contracts and the Promise a Manager Cannot Enforce
Coordination and Internal Markets
- Internal Markets and Charging for Shared Resources
- Profit Centers, Cost Centers, and the Accountability Each Creates
- Shared Services versus Embedded Teams
- Coordination Cost and Why Adding People Slows a Project
- Process Design and Where the Handoffs Leak
- Organizational Slack and the Cost of Running at Full Utilization
Hiring and Building the Team
Managing People and Performance
Culture, Bias, and Failure Modes
- Culture as Whatever Behavior Gets Rewarded
- Escalation of Commitment and the Project Nobody Will Kill
- Groupthink, Dissent, and the Pre-mortem
- Empire Building and the Internal Capital Market Distortion
- Why Incentive Systems Fail and How to Audit One
- The Founder-to-manager Transition and the First Fifty People