Eric Ries’s Incorruptible brings welcome attention to a challenge facing business leaders: consistently translating good intentions into action.
By Julie Menter, Transform Finance
This week, Eric Ries published Incorruptible, a book about why companies so often lose their way and corrupt the purpose and passion that sparked their creation. Coming from the author of The Lean Startup, whose ideas shaped how a generation of founders and investors think about building companies, it’s an essential call to action for founders and investors to challenge “business as usual.”
The book contrasts stories of companies that lost their way with those that stayed on track despite the forces working against them: Whole Foods versus Costco in retail, Johnson & Johnson versus Novo Nordisk in pharmaceuticals, Merrill Lynch versus Vanguard in investing. It reaches well beyond the usual suspects to include the internet infrastructure company Cloudflare, the Texas grocer H-E-B, and the safety certification giant UL.
The breadth of examples reinforces what we found in our research at Transform Finance: across many industries, business leaders are challenging the imperative of relentless short-term profit-seeking. Two of the book’s arguments stayed with me in particular:
“It’s Always Too Early Until It’s Too Late”
Ries notes that protecting a company’s purpose tends to feel premature, right up until the moment it becomes impossible. The default pathways at a company’s key moments – incorporating as a Delaware C-corp, raising venture capital, going public – are made so easy that harder questions about governance get postponed. The structural decisions that would protect a company’s purpose are never quite urgent enough to reach the top of a business leader’s agenda.
In our own research, examining more than 600 companies for the report Hiding in Plain Sight, we found that the chance to act tends to cluster around a handful of identifiable moments in a company’s life. These inflection points — founding, scaling, change of control, and crisis — are when the opportunity to embed or protect a company’s values meaningfully opens.
A founder at incorporation, a team negotiating investment terms, a company approaching an exit or weighing a pivot — each has an opportunity to act with intention rather than follow the well-worn tracks of business “best practices.”
“From Mission-Hopeful to Mission-Driven”
I laughed out loud when Ries observes that one founder “wanted to be seen as what we colloquially call mission-driven. But wanting isn’t enough. Most companies are, at best, mission-hopeful.” Too often leaders never give themselves the means to deliver on their promises and thus erode the trust they have built, and lose what made them special in the first place.
Closing that gap is a matter of corporate design, and many practical mechanisms can help turn aspiration into something durable. Ownership models and incorporation strategies are an important component: perpetual purpose trusts, employee ownership, multi-stakeholder cooperatives, Public Benefit Corporation status, and more are no longer fringe experiments; they are established, increasingly well-documented options with a real track record. Yet these structural choices are not available to every company, and even when they are, they are not sufficient on their own. The companies that hold their course tend to combine several mechanisms, from accounting systems to leadership development to partnership strategy, so that their values are protected from more than one direction at once.
Incorruptible joins a broad and growing field working to redefine what good business means. It stands alongside critics of the status quo from all sides of the political spectrum — from Cory Doctorow, whose term “enshittification” describes how platforms decay under the drive to maximize financial returns and the need for government policy to constrain bad behavior, to Oren Cass, who challenged the financialization of the economy in a recent New York Times op-ed — and will hopefully bring added momentum to the decades of building done by organizations like Purpose, B Lab, the Democracy at Work Institute, LIFT Economy, and many more.
In the last chapter of the book, Ries includes an important reminder from Ursula K. Le Guin, who observed, “We live in capitalism, its power seems inescapable — but then, so did the divine right of kings.” Systems that feel inescapable were built by people, and they can be changed. My hope is that this book helps tip a growing movement into the mainstream, accelerating the shift toward an economy that works for everyone.
