Nobody’s Misaligned on Purpose
Incentive misalignment is the most common dysfunction in cross-functional work
The meeting ends without a decision. Again. Everyone came prepared. Everyone made reasonable points. And somehow the outcome is another meeting.
This gets called a communication problem. It isn’t. The people in the room are communicating fine. They understand each other. They just want different things. Their organizations have trained them to want different things.
That’s incentive misalignment. It’s the most common dysfunction in cross-functional work and almost nobody names it directly.
Here’s a scenario worth sitting with.
A platform squad supports multiple business units across a company. Their current mandate is Business Unit A — that’s where the business is investing, that’s what they’re measured on, that’s the work they’ve been resourced to do.
Business Unit B now wants a major refactor of a core part of the platform they depend on. It’s a legitimate ask. The work needs to happen eventually. The refactor would produce real value for their side of the business.
They want the squad to do it in parallel with everything already in flight for Business Unit A.
No additional engineers. No adjusted timelines. No change to what the squad is expected to deliver. Just: also do this.
Now look at the incentives.
The product director, sales, and marketing leads for Business Unit B want this refactor because it unblocks their roadmap, strengthens their product, and makes their numbers easier to hit. They have every reason to push for it. Pushing for it is their job.
The product director, sales, and marketing leads for Business Unit A want the squad’s focus because they’re mid-execution on their priorities. Losing that attention means slipping timelines, slower delivery, and harder conversations with their own stakeholders. Protecting the squad’s bandwidth is their job.
Both sides are right. Both sides are acting exactly as their incentives dictate.
And then there’s the squad.
Their incentive is simple: do good work, ship things that matter, and not burn out doing it. They don’t have a seat at the table where this is being decided. They’re the resource being negotiated over. If they do the refactor, they stretch thin and probably do both things poorly. If they don’t, they’re the ones who said no to another business unit, which carries its own political cost. The conflict doesn’t belong to them but the consequences do.
And here’s the part that’s hard to say out loud without sounding like a complaint: taking on this extra work will not result in a better performance review. It will not result in a higher bonus. There is no upside for the individuals being asked to absorb it. The business captures the value. The squad absorbs the cost. The people on the squad are left trying to find a personal reason to care about work that the organization itself hasn’t bothered to incentivize.
This is what incentive misalignment actually looks like from the inside. It’s not abstract. It’s a squad absorbing costs that were created several levels above them.
The reason this goes undiagnosed is that it looks like a prioritization problem.
“We need to get better at managing competing demands.” “The roadmap needs more discipline.” “Let’s find a way to phase the work.” All reasonable. None of it touches what’s actually broken.
What’s broken is that two business units have legitimate authority to make asks of a shared resource, neither has a metric that accounts for the cost to that resource, and there’s no organizational mechanism that forces the conflict to resolve at the level where it was created. So it resolves one level down, on the people doing the work.
There’s also a political reason nobody names this cleanly. Saying “our incentives aren’t aligned” implicates the org design and the leadership that built it. It’s a harder conversation than “let’s figure out how to phase the work.” So the harder conversation doesn’t happen, and the squad tries to figure out how to phase the work.
What would actually help:
Make the cost visible to the people creating it. Right now, making this ask costs Business Unit B’s leadership nothing. The cost lands on the squad. If both directors were jointly accountable for what the squad delivers, the calculus changes. You don’t ask for something that hurts you too.
Resolve the conflict at the level it was created. Two senior leaders are making competing claims on the same team. The right person to resolve that is whoever sits above both of them — not the squad lead, not a planning meeting. If that person isn’t being asked to decide, the conflict will keep traveling downward until it lands somewhere with the least power to push back.
Resource the work or don’t do the work. This is the one that rarely gets said plainly. If Business Unit B’s refactor is important enough to prioritize, it’s important enough to staff. Asking a team to absorb a major parallel workstream without additional support isn’t prioritization. The business is getting the value of a decision without paying the cost of it.
The frustrating part isn’t the ask. The refactor is legitimate. Business Unit B isn’t wrong to want it.
The frustrating part is that the decision to pursue it is made without a real accounting of what it takes from the people who have to do it. That accounting doesn’t happen because nobody in the room when the decision gets made is measured on the squad’s capacity, the squad’s wellbeing, or the quality of what the squad ships.
Everyone’s incentives are pointing somewhere. They just aren’t pointing at the people doing the work.