I have written several articles about tech debt over the last 10 years, but this text is about two other types of debt. I see them in most organisations and I often hear people talking about issues that stem from these debts. They are important to understand and act on, but they are unfortunately too often overlooked or dismissed. As always with debt, not paying attention to it can become very expensive.
Here we go:
Organisational debt
When building, growing or evolving an organisation, there is always more to do.
This means that no organisation is perfect and no organisation is ever finished, I know.
You can’t always act on every need as soon as it arises, but if you do too little for too long, then it’s a bit like building an entire house but deciding that you will care about legal electrical installations and standardised plumming later. You will be in for a lot of nasty surprises and extra work later on. And someone may get hurt. And it’s expensive. And no one will want to live in it.
Let’s try to define this debt::
If there are things that the organisation (not the product or offering) should have but doesn’t, or should have changed or updated but hasn’t, then there is organisational debt.
Organisational debt is the necessary organisational work that has been left unhandled. It just hasn’t been done.
If that is how we define it, then you could argue that there will always be organisational debt in evolving organisations. That is true, but in my opinion there is too often way too much of it. It slows growth and it lowers productivity.
Let’s look at a few examples:
- Perhaps there are some changes needed to roles, responsibilities, accountability or reporting lines?
- Perhaps there are too many special roles, like ’Lead’ [something] or ’manager’ [of something]. They are common titles, but what if they aren’t even clearly defined?
- Perhaps management is in place but there is too little of professional leadership?
- Perhaps there are processes or decision chains that don’t really work as well as needed – or not at all, even?
- Perhaps there is a lot of recruitment being done, but without much in the way of agreed and documented requirements, role descriptions or salary structures? (Heads-up: There is a lot of work coming soon related to this one.)
- Perhaps no one is aware of some new laws or regulations that the organisation should already have adapted to?
How can we pay the debt?
The only two currencies accepted when paying off organisational debt are decisions and work.
Paying with decisions as currency
By making certain decisions we may be able to decrease the debt or even make it disappear altogether in some area. Here is an example:
Debt content: A certain company function is slow and/or too expensive.
Debt payment: By deciding that a certain function should no longer exist or by implementing some new system, much of the debt may disappear. I write ’much of’ and not ’all’, because when such things are done, there may be some other work needed because of the change.
Paying with work as currency
This is just work, often lots of it. Here is an example:
Debt content: In team A, progress is slow, decisions get diluted and those involved feel uninformed and overqualified.
Debt payment: Analyse decision making and requirement flows. Listen, communicate, change, discuss, analyse again, listen again, change again, etc.
Depending on for how long things have been left unhandled, the amount of work needed to pay off the debt will vary. Different skill sets may be needed, as well as more or less senior leadership (assuming that organisational change is considered part of senior leadership)
To analyse, standardise and document existing roles and role descriptions may take only a few weeks, but changing roles or reporting lines or introducing new ones can take a couple of quarters or more.
Whatever the debt consists of, it is a good idea to act on it as soon as possible to avoid having more of it next month/quarter/year. Organisational debt that isn’t paid off may also trigger the build-up of something else…
Psychological debt
Psychological debt is all too often the result of unhandled organisational debt.
I would also say that some amount of whatever organisational debt or psychological debt you see may in turn stem from a lack of leadership. Let’s call that leadership debt and save it for another blog post..
A lot has been written about good leadership, coaching, acceptable vs non-acceptable behaviors, team dynamics, racism, genderism, ageism, communication, and so much more. Still, there are unhandled situations, toxic behaviors and poor communication going on daily in many organisations.
Most organisations would probably say that they do care and that they already are handling all such issues as well as they can, but as a leader – both employed and interim – I have seen way too many situations where things were ’unknown’ (yeah, right), given low priority (why?) or left to fester for too long (ouch).
Here are a few examples of psychological debt:
- David feels his manager changes both strategy and tactics too often.This has started affecting his ability to focus, his mood and his general health.
- Dana is considered very skilled but also abusive, so many people around her avoid talking to her to keep their own stress levels down.
- Eric finds it both tiring and stressful to get anything done in his new role because it was set up so that he needs to involve a lot of people in every decision.
Whenever I have joined organisations as a new leader, leadership trainer or leader coach, it usually hasn’t taken long to spot tense situations, bad behaviors, undefined roles or lacking leadership.
All of these things affect the organisation negatively, but even if it is detected, it too often isn’t seen as big or important enough to act on. Isn’t it?
Sometimes, senior leaders think that employees should just work it out themselves.
It has often been my job to get involved and try to handle such things but that doesn’t mean it hadn’t already been someone else’s job for a long time. It just wasn’t done, and that’s the thing. It may have been identified and discussed, but not acted on. Again and again.
Psychological debt is the combination of all the stress, bad feelings, resentment, worries, akwardness, dislikes and concerns that should have been handled but wasn’t.
It builds up. Sometimes it may become something bigger, almost like a feeling in the whole organisation. It will leak out as a common sentiment or as a rumour among people outside of the organisation, thus affecting employer branding and recruitment. It may very well make people leave or even get sick. Obviously, it slows growth.
Many times and in many organisations, I have seen very positive effects when these things are acted on and resolved. Here are a few examples from real life:
- Ahmad no longer feels sick at work.
- Anina no longer cries after meeting with her closest manager.
- Claude is calmer now and sends a ’Thank you!’ note to the person who helped him achieve a better situation at work.
- Derek says ”Learning what you showed me was the final boss in my game. I feel much more confident now”.
So why are bad things so often left unhandled?
It’s because we are human. The people who could potentially fix the issues may have good intentions and they may actually care, but they may not have seen all the issues first-hand and perhaps they just don’t know what to do about an issue.
Perhaps they aren’t used to spotting these things.
Final thoughts
Organisations need to track organisational and psychological debt better and also act sooner to pay it off.
As you can see, building and growing organisations (which is what I do) is not just about hiring and setting up new teams. Far from it.
Take care,
Björn
Want a quick tip?
Let’s say you come across a situation where someone has been hurt by psychological debt. If you talk to them, show them that you care and that you have started acting on it, then you will have much more time to actually succeed than if you don’t talk, show and act.