MISALIGNED INCENTIVES

The people you pay to solve your problems often profit from your problems persisting.

This is not malice. It is structure. The way compensation works creates incentives that run opposite to the outcomes you want. Understanding these structures is the first step to navigating them.


EDUCATION

Teachers are paid salaries. The salary arrives whether students learn quickly or slowly. There is no bonus for efficiency. There is no penalty for dragging things out.

A teacher who could convey a year of material in three months has no financial reason to do so. The curriculum is designed to fill the time allocated. The time allocated is designed to fill the years of schooling. The years of schooling are designed to match the employment structure of the institution.

The student wants to learn. The institution wants to employ teachers. These goals overlap but are not identical. Where they diverge, the institution's structure wins.

Tuition-based education adds another layer: the school profits from enrollment duration. A student who finishes quickly pays less. A student who takes longer pays more. The incentive is to extend, not accelerate.

None of this requires conspiracy. It only requires that no one is rewarded for making education faster.


CONSULTING

Consultants bill by the hour. The more hours, the more revenue. The incentive is to take longer, not to finish.

A consultant who solves your problem in one day bills for one day. A consultant who stretches the same solution across three months bills for three months. The market does not reliably distinguish between them. Both can claim success. One earns more.

Hourly billing also creates scope incentives. A tightly scoped engagement ends. An expanding scope continues. The consultant who identifies adjacent problems — real or invented — extends the engagement. This may be genuine insight. It may be revenue protection. The client cannot easily tell.

Fixed-price contracts invert the incentive: finish fast, keep the margin. But they create new problems — pressure to cut corners, disputes over scope, adversarial change requests. The misalignment moves, it does not disappear.


MEDICINE

Healthcare paid per procedure rewards procedures. More tests, more visits, more interventions — more revenue. Prevention generates no billing code. Cure terminates the patient relationship.

A doctor who keeps you healthy sees you rarely. A doctor who manages your chronic condition sees you often. The healthcare system compensates the second doctor more than the first.

This structure does not require corrupt doctors. Most physicians fight against these incentives daily. But the structure persists, and over large populations, structures shape outcomes more than individual virtue.


SUPPORT AND MAINTENANCE

Support contracts are often priced by incident or by hour. Fast resolution means less revenue. A support team that solves problems permanently eliminates future tickets — and future income.

Maintenance contracts paid annually create incentive to maintain, not to fix. A system that requires ongoing maintenance justifies ongoing payment. A system that runs without intervention justifies nothing.

The provider who makes you independent loses a customer. The provider who keeps you dependent keeps a customer.


SOFTWARE

Software sold by subscription profits from continued use, not from solving your problem. If the software solved your need completely, you might stop subscribing. Features that create ongoing engagement — notifications, integrations, workflows — are more valuable than features that let you finish and leave.

Software sold by seat profits from more users, not more efficiency. A tool that lets one person do the work of five reduces seats by four. The vendor loses revenue. The tool that requires five people to do what one could do maintains seats. This is not optimized for your productivity.


THE PATTERN

The pattern is consistent: when compensation is tied to time, volume, or continuation, the provider profits from your problem persisting.

This does not require bad actors. It only requires that good actors operate within structures that reward the wrong outcomes. Over time, the structures select for behaviors that serve the structure, not the client.


THE EXCEPTIONS

Some structures align incentives:

Outcome-based compensation ties payment to results. The provider profits when you succeed. Risk shifts to the provider, which is why it is rare — providers prefer predictable revenue.

Flat-rate pricing for defined scope rewards efficiency. Finish fast, keep the margin. But scope must be clear, which requires expertise to define — expertise you may be hiring the provider to supply.

Reputation markets where providers depend on referrals create long-term incentive for client success. But reputation is slow and noisy, easily gamed, and only works when clients can evaluate outcomes.

One-time purchases for tools that solve problems completely align the transaction: you pay, you receive, the relationship ends. But recurring revenue is more valuable to businesses, so the market trends toward subscriptions.


WHAT TO DO

Awareness is the first defense. When hiring a provider, ask: how are they compensated, and what behavior does that compensation reward?

If the answer is "they profit when my problem persists," you are in a misaligned relationship. This does not mean the provider is bad. It means the structure is working against you.

Where possible, restructure. Negotiate outcome-based components. Define scope tightly. Create exit conditions. Make efficiency profitable for both sides.

Where restructuring is not possible, monitor. Expect the structural incentive to manifest. A consultant who keeps finding new problems may be insightful or may be extending the engagement. A doctor who recommends frequent visits may be thorough or may be billing. You cannot know from inside the relationship. Seek outside perspective.

The deepest solution is capability. Learn enough to evaluate what you are buying. The client who understands the domain cannot be easily extended, expanded, or maintained indefinitely. Expertise is the exit from misaligned structures.


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Lingenic LLC
2026
