Hey everyone,
Every Labor Day for 54 consecutive years, the city of Darlington hosted a legendary NASCAR race called the Southern 500. For a ton of diehard racing fans, it wasn't just any race. It was THE race.
But in 2004, NASCAR ownership figured: "We could make more money if that Labor Day race were in LA."
So they bumped the Southern 500 to a random date in November, and a ton of diehard NASCAR fans realized this wasn't their sport anymore.
There was a fundamental disconnect between owners and fans.
These days, their viewership is down 50% from its peak, the median fan age is in the high 50s/60s, and major sponsors fled (Reebok, Xfinity, Home Depot).
Which leads to a key question for your business:
Are your decision-makers incentivized correctly?
Power shapes every decision.
NASCAR’s founding structure gave control to track owners and the France family (who own the sanctioning body that sets the rules, organizes things, etc).
Drivers had minimal say. Fans had none.
So when decisions needed to be made, the business optimized for track owners’ profits. Not the sport. Not the fans. Not long-term health.
The decision-makers were so far removed from the consumers that they lacked perspective.
Look at your own business structure.
Ask yourself:
Do your decision-makers actually interact with customers?
Are the people with power incentivized to think long-term?
What happens when investor or shareholder interests conflict with customer interests?
In my experience, the companies that endure give power to people who live with the consequences of their decisions.
NASCAR gave power to people who could extract short-term revenue while insulating themselves from competitive pressure.
How to fix misaligned power in your business
If you're worried your decision-makers aren't properly incentivized, here’s a simple test:
For your next major decision, map out: 1) who benefits if it goes right, 2) who suffers if it goes wrong, and 3) who are the decision-makers.
If those people don’t heavily overlap… You might have a structural problem.
—
Fixing that usually comes down to incentives.
Luckily, there are a million ways to incentivize people. Here are a few suggestions:
Tie compensation to leading indicators, not lagging ones. Track customer satisfaction or target demographic acquisition, not just revenue growth. Imagine if NASCAR had bonuses tied to fan age.
Put operators in the room. Your decision-making table needs people who talk to customers regularly. Even better: go talk to them yourself.
Empower people with long-term stakes. Equity that vests over 5-10 years focuses minds differently than quarterly bonuses.
The core principle: everyone always optimizes for their incentives.
So line those incentives up with your business.
(By the way: check out the P.S. section for more of my stuff on incentives. I’ve written about them a lot.)
TOGETHER WITH MY COMPANY NEAR
When you’re building a business, every dollar counts.
But you should never compromise on talent.
That’s where my company Near makes things possible:
Sales teams instead of one guy. In-house developers instead of flaky dev shops. World-class accountants instead of sweating through the books yourself.
And paying Latin American salaries, your dollar goes farther for zero sacrifice in talent.
The team at Near can help you fill open positions in under 21 days, at a 97% placement rate.
And get 5% off your first placement at hirewithnear.com/girdley.
(I’m cofounder. I get to give out discounts.)
3 things for this week
Appetizer: How does a business justify a 12x multiple? The EdTech space is wild. Plus, we had a great conversation about the state of business buying these days.
Main: Walker Deibel wrote the book (literally) on acquisition strategy - Buy Then Build. But his approach is counterintuitive. Read the whole thing in our special “HoldCo War Stories” sequence here.
Dessert: I am Girdley, hear me Roark. (Sorry.)
Thanks for reading!
Michael
P.S. More on incentives — all pretty tactical stuff.
And of course, how to screw up employee bonuses
P.P.S. Want to reach ~48,000 business people? Advertise in this newsletter! Email [email protected] and he can send you more info.
How can I help?
🌎 STAFFING → Hire with Near. Fortune 500-level talent, at prices any business can afford.
⛷️OWNERS → HoldCo Conference 2026. Where business owners meet, learn, scale and grow at a stunning Utah resort. Feb 9-12.
💡Q&A → I host regular free lectures on all things business. Coming up:
Dec 11 — Year-End Tax Savings for HoldCos w/ Mark Edler
Jan 9 — How to Build Winning Remote Teams w/ Franco Pereyra
💸BUYING A BUSINESS → Acquisitions Anonymous. Podcast where we break down businesses for sale… 440+ episodes in!