For years, I was stuck in what I now call competence prison. I didn’t have the language for it back then. Now I do.
What Is Competence Prison?
It’s the sophisticated economic stupidity where companies trap their highest-impact people in roles that exploit their abilities while creating massive financial blind spots.
And the kicker? They’re shocked when these people leave—taking millions in institutional value with them.
This isn’t just about underappreciated talent. It’s about businesses bleeding money through strategic incompetence while their most capable employees burn out—overworked, underutilized, and boxed out of real influence.
How the Prison Works
The setup feels flattering at first:
- You connect dots others don’t even see.
- You translate between silos.
- You build frameworks that actually move the needle.
Instead of being elevated into strategic leadership, you become the permanent translator—keeping broken systems just functional enough that no one is forced to fix them.
The Exploitation Cycle
- Recognition: You solve high-leverage problems. You’re praised.
- Scope Creep: “Just one more thing” becomes 10. You inherit invisible work.
- Indispensability: You’re the only one who knows how everything fits together.
- Promotion Blocked: “You’re too valuable where you are.”
- Burnout or Escape: Eventually, you leave—or you break.
The Real Financial Cost
What Companies Lose
If someone builds a framework that saves you $2M and gets a 3% raise, you’re extracting value at a discount.
When you get director-level thinking at IC rates, you’re running a value arbitrage scheme—one that implodes the second that person walks.
The Consultant Tax
Once that person leaves, companies panic-hire external consultants to patch the hole:
- $150K to McKinsey for a “strategy framework” that mimics what your employee already built
- $200K to Accenture for “implementation” of a system that already existed
- $75K to a boutique firm for “change management” your employee did informally, daily
Total: $425K
Former salary: $95K
And the kicker? None of those firms talk to each other. They’re billing for siloed deliverables—the exact dysfunction your former employee was solving in real time.
Why Companies Keep Making This Mistake
1. Leadership Blindness
Executives don’t understand what these people actually do. They see outcomes, not the layered thinking that produces them.
They can’t value what they can’t see.
2. Accounting Blindness
There’s no budget line for “prevented chaos” or “invisible optimization.” So CFOs underpay the people saving millions—because the value isn’t auditable.
3. Political Safety
Promoting the systems thinker is risky. They might point out what isn’t working. Safer to keep them buried in execution land—out of sight, out of threat range.
The Red Flags (aka: How to Spot a Prisoner)
- Their impact is measured in millions, their compensation in hundreds or thousands
- They’re told they’re “too valuable to move” but get passed over for raises
- Consultants get brought in to solve problems they’ve already solved
- They know how the systems really work, but aren’t in the room for decisions
- They manage up, down, and sideways—without a title to match
The Escape Reality
Many people ask how to “break free and go out on their own.”
The truth? Escaping competence prison often means trading one set of constraints for another.
You go from high-leverage internal impact to selling your value externally. From building million-dollar systems to chasing $10K contracts. From predictable undercompensation to unpredictable income.
Yes, you’re finally paid your worth—hourly. But the scope shrinks. The impact fragments. The work changes.
For some, entrepreneurship is a lifeline. For others, it’s just a different set of tradeoffs.
The Hidden Pattern
Let’s recap:
- Companies profit off competence prison short term. It’s cheap.
- Then they pay 4x more to external consultants for worse results.
- The systems thinker leaves and often can’t recreate the same leverage as a solo operator.
- Everyone loses. Including the economy.
No Easy Fixes, But a Few Truths
For Individuals
- Track your impact. Quantify your value. Don’t let them forget what they’re extracting.
- Know that leaving might cost you leverage, even as you reclaim autonomy.
For Companies
- Compensate cross-functional thinkers. Build promotion tracks that reward strategic systems impact—not just execution volume.
For Everyone
- Understand this isn’t a “bad boss” problem. It’s a capital allocation failure baked into modern org design.
The Bottom Line
The competence prison is the single most overlooked financial leak in modern organizations.
It’s not just shitty practice; it’s entirely unsustainable. And fixing it requires more than lip service to “strategic thinking.” It demands a total shift in how we recognize, reward, and retain the people who see across the system.
If you’re in it, I see you.
If you’re leading a team, ask yourself: “Who’s making this place run, and who’s being invisibly taxed for it?”
We have an opportunity to stop competing against each other—and start building systems that don’t bleed brilliance for short-term comfort.
About the Author
Sadie Shepard is a strategic advisor who helps growth-stage founders, leaders, & operators diagnose friction, fix what’s not working, & scale smarter. She thinks in systems, writes to surface root causes, & builds clarity into how businesses grow. Learn more at sadeshep.com.
