Beyond tactics: Organizational debt

  • 15 July 2020
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Have you heard about Organizational Debt? This concept by Steve Blank immediately came to mind as contextually relevant to our topic of the month.

Organizational Debt is all the people/culture compromises made to “just get it done” in the early stages of a startup.”

This concept ring so true too many that expanding definitions have been proposed to include larger and later stage companies than Steve Blank suggested.

When facing rapid growth and a ton of new challenges, it’s tempting to postpone the strategic aspect to later, stick to the tactical aspect and just try to get it done quickly, or stick to the existing policies and systems even if the team actually outgrew them.

Covid-19 and the need to adjust how we work and collaborate, may have resulted in a lot of decisions that will create future organizational debt. It probably also shed a light on previous compromises that became unsustainable.

A simple manifestation of this issue I have often witnessed is the need for information sharing. Suddenly there are too many team members, too many projects and it’s difficult to follow the evolution of each projects, the decisions being made, and the impact of the progress on others. Common tactical solutions include a frequent status email, a spreadsheet to be updated regularly, or a repeating meeting. Often, they are not sustainable at scale and stop delivering value.

Consider this in your current or past experiences. Can you think of a system your team outgrew but still exists even if it doesn’t deliver value anymore?

If you would like to share your experience with Organizational Debt, how you prevented it, overcame it, or get help with a current challenge, there are a few spots left for this Thursday’s virtual coffee.


3 replies

I love that this concept is catching on. One abstract metric I try to think about when changing a process is payback period. Or rather perceived payback period. It feels like if I can convince myself (let alone others!) that there is some defined date by which payback will be achieved, then that helps get over the inertia of status quo. The sooner life gets made easier, the easier it feels to make the upfront investment in changing a process or system!

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I love that! I haven’t used that myself but it sounds like a great way to influence others and get their buy-in.

Organizational debt is 10000% a real thing. Taking it a few layers deeper, beyond “operational debt” there is just an immense amount of “systems debt”. If you’ve ever seen the internal guts of a company’s CRM, or marketing automation platform, or even simply their Dropbox/Google Drive, it’s usually absolute anarchy under the hood. Systems debt gets out of control fast and multiplies and festers and there are usually zero people internally who are responsible for the maintenance/cleanup of these systems, let alone how these systems attribute to the overall operational/organizational debt.

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