Incentive Mapping

Incentive Mapping is a diagnostic tool for understanding why people, teams, and organizations behave the way they do. As Charlie Munger famously said: "Show me the incentive and I will show you the outcome." Most behavior that looks irrational becomes perfectly logical when you understand the underlying incentives. This tool helps you surface hidden incentives, identify misalignments, and design better systems.

1. Identify the behavior you want to understand — What are people doing (or not doing) that puzzles or frustrates you?
2. Map all incentives for each actor:

• Financial incentives — Compensation, bonuses, equity, cost savings
• Career incentives — Promotions, visibility, resume building, job security
• Social incentives — Peer approval, status, belonging, avoiding conflict
• Intrinsic incentives — Purpose, autonomy, mastery, curiosity
• Negative incentives — Punishments, risks, things to avoid

1. Check for misalignment — Where do individual incentives conflict with organizational goals? Where do short-term incentives conflict with long-term ones?
2. Look for perverse incentives — Where do the incentive structures reward the wrong behavior?
3. Redesign the incentives — Don't try to change behavior directly. Change the incentives that drive the behavior. Make the desired behavior the easiest, most rewarding path.
4. Test for gaming — Before implementing new incentives, ask: "How could someone optimize for this metric while undermining the actual goal?"

• Financial: No bonus or reward tied to documentation
• Career: Promotions are based on features shipped, not docs written
• Social: Peers value "shipping code" — docs are seen as low-status work
• Intrinsic: Writing docs feels tedious vs. solving technical problems
• Negative: No consequences for missing documentation

• Include documentation quality in code review criteria
• Make "team enablement" (including docs) a promotion criterion
• Celebrate great documentation publicly
• Make docs a prerequisite for marking a feature as "done"

Incentive Mapping helps you stop blaming people and start fixing systems. When behavior seems irrational, the incentives almost always explain it. Change the incentives, change the behavior.