There’s a lot of talk these days about managing technical debt. In agile technology teams, acceptable shortcuts reduce the time it takes to get feedback from real customers.
When a team agrees to “make it right” in the future, they’re signing a kind of loan agreement with themselves. We call that technical debt. Over time, debt usually grows and the only way to take care of it is to invest in regular maintenance.
Let’s be honest.
Maintenance is never as fun as doing something new.
Ignore maintenance, though, and bad things start to happen. When it does, people lose confidence.
The same thing happens in the organization itself.
Organizational Debt
Leaders and managers make trade-offs with people and structure all the time. The difference between this “organizational debt” and technical debt is that we almost never sign the loan agreement. Organizational debt becomes invisible and our teams start suffering from a lack of maintenance.
Left unchecked, bad things start to happen:
There doesn’t seem to be as much getting done as there used to be.
People start feeling less energized to start new things.
The team just doesn’t feel like it has as much power as it did before.
A tale of two…oil leaks?
What do oil leaks have to do with organizational debt? They’re a tangible picture that will help your mind connect with this abstract business concept.
Tiny drops of oil. One or two a week. For a couple months oil slowly seeped from the drain plug. It wasn’t a big deal — just a couple drops every few days. Most of the time it dried out before anybody walked through it. The car ran fine. It was out of sight most of the time anyway.
I just ignored it. Eventually I fixed it with a new washer on the drain plug. Easy fix. No more annoying little drops.
The other leak was an entirely different story. It wasn’t quite an environmental disaster but it was more than a slight irritant. It also took a lot longer to figure out. In the meantime, I just kept putting oil in to replace what leaked out.
Eventually, the puddle under the car started getting bigger. I had to replace more than a quart of oil between every oil change. The engine wasn’t as responsive as it used to be. My fuel economy was dropping. I started being concerned about long-term damage.
It was time to do something about it.
The process took several big steps. The list of things I fixed is interesting but that’s not really the point. The scope and risks are what’s important.
The work wasn’t easy.
It took a lot of time.
There were plenty of things I could do wrong.
I did the work anyway — because it wasn’t easy and in spite of the things that could have gone wrong. It simply needed to be done and I was the person to do it.
The engine’s performance and fuel economy improved again. And, there weren’t any more annoying puddles on the garage floor.
It’s easy to overlook the “puddles” of organizational oil that are draining the performance from your company.
Maybe you’ve been getting more things done than not. Why tinker with it when so many other things could go wrong? My car still got me from place to place. Maybe you’re thinking there’s not enough debt yet to start making payments.
That’s not the work of leaders.
Our teams, stakeholders, and customers deserve better than that.
All these people picked us because we’re the best at what we do — not because we’re the best at covering up difficult problems with temporary solutions.
Taking care of organizational debt is like doing the hard work of digging into your car’s engine.
Effective leaders pay attention to risks and work to reduce them:
What if I don’t know enough?
What if something goes wrong?
Who are the experts I can call for advice?
How much organizational debt do you have?
If you’ve read this far, I bet you already know at least one or two things to work on. If not, here are some questions to think about:
Is your team feeling a little sluggish, lacking a sense of energy and direction?
Does your company miss key targets?
Are you spending more and more time trying to resolve conflicts?
Do you feel like people just don’t “get it” anymore?
Organizational debt comes in many forms. Maybe you’ve:
delayed filling a key position because it’s too hard to find the right person.
kept someone around even though they’re a negative influence and dragging their team’s performance down.
been unwilling to restructure a team that was perfect before you hit a growth cycle but that doesn’t really work now that you’re scaling because the people might get upset and leave.
As leaders, we fall into these traps (and dozens more) because we’re so busy pushing forward with new and exciting things.
A company’s ability to grow is directly tied to the willingness of its leaders to face the brutal realities of where they are and then make changes that focus and energize the team.
Two important questions for leaders
How much organizational debt are you carrying?
What long-term success will you see once you’ve paid it down?
Paravelle offers executive coaching services to founders and CEOs with big growth goals. It's a crucial support structure that helps leaders avoid the negative results that come from being lonely at the top.
We might be a good fit to work together if you're:
at the create (<1M ARR), build ($1-3M ARR), or grow ($3-5M ARR) stage,
curious and looking for ideas and answers, and
ready to invest in working with a collaborator that brings a co-founder's perspective (without losing half your equity).
Let's chat!
Paravelle offers executive coaching services to founders and CEOs with big growth goals. It's a crucial support structure that helps leaders avoid the negative results that come from being lonely at the top.
We might be a good fit to work together if you're:
at the create (<1M ARR), build ($1-3M ARR), or grow ($3-5M ARR) stage,
curious and looking for ideas and answers, and
ready to invest in working with a collaborator that brings a co-founder's perspective (without losing half your equity).
Let's chat!
