Here's the best part from the full post mortem "First and foremost,the VP of Sales was compensated according to sales before discounts, not according to margin

Here's the best part from the full post mortem "First and foremost,the VP of Sales was compensated according to sales before discounts, not according to margin or profit. Our discount strategy resulted in enormous losses, but for the VP of sales the strategy optimized his bonus. " It's called incentive based behavior, and it goes to show you that if you reward someone for the amount of shit they can sell without any consideration for margin, they'll give the damn shit away for free!