Art: Charter

Think about your last run-in with the American medical industry. For me, it was trying to have X-rays sent from a hospital to a surgical team. You can imagine the hurdles—spelunking through an online records system that forced me to verify my identity via text at every login (despite checking the box that swore I could “Skip this step next time”); locating a referral that was never sent to my primary care physician; navigating the surgeon’s automated phone system for an email address to receive my X-rays. The effort, for a routine procedure involving one of the best hospitals in the country and concierge teams, took hours.

Processes like this are rife with organizational debt—the sand in the gears that employees and customers have to contend with when a company’s ways of working become outdated and calcified. A simpler way to describe it is, simply, waste. Some call it sludge or bureaucracy mass; others experience it as death by a thousand paper cuts. By one estimate, it costs OECD economies $9 trillion annually in lost economic output.

Org debt exists whenever you find yourself spending more time navigating a process or set of rules than engaged with the issue itself. The time I spent getting documentation squared away was time I didn’t spend caring for my health or preparing for the surgery itself.

Translate that to a corporate process like performance management, which prioritizes written evaluations, rating scales, and calibration to peers, but makes individual performance worse a third of the time. And what about strategic planning? Annual budgeting? These workflows demand days or weeks of an organization’s energy and begin to decay the moment they’re finished. As the world turns, the utility of a plan is rarely worth the slide or sheet it’s written on.

It’s not that processes aren’t necessary; it’s that too often, processes are upheld even when they don’t do what they’re supposed to. The documentation isn’t the surgery. The manager evaluation isn’t the performance. The narrative isn’t the work.

Where does org debt come from?

The creation of org debt isn’t due to malice or stupidity. It’s often manufactured by roles meant to mitigate risk, track progress, and manage worst-case scenarios. Some org debt takes obvious forms, like the eighth version of an internal PowerPoint or the detailed financial analysis no one reads. Other org debt is harder to spot—like the cycles of consensus-building before a decision, or the incentive program pitting two divisions against each other. (If none of these examples lands with you, let’s trade lives.) Often, it accumulates slowly, going unnoticed until it’s already a major problem. At one time, the surgeon’s automated phone system probably had just two steps before a patient was connected with a team member. But as the practice and use cases grew, so did the system’s complexity, until it became a labyrinth.

Despite the shared pain of org debt, we all help perpetuate it. Why? Let’s explore the question from three perspectives:

  • Leaders who see the symptoms but don’t feel the pain
  • Workers who are nose blind to the smell of org debt
  • Project, change, and middle managers who pay the interest

Leaders won’t shed org debt

Leaders don’t see how the organization strains beneath the weight of org debt, because the effort to manage it doesn’t impact them directly; it’s delegated. I once had a high-level leader ask me to run a session with a team under her. The team lead was fired up until he realized there was no charge code for the session; he needed an exception to the time-tracking policy to participate. When he submitted the exception request, the leader’s admin denied it, kicking off several weeks of emails for the one-hour meeting the boss had asked for. Leaders rarely investigate the inefficiency of the processes they delegate; the weight gets shouldered elsewhere—by those lacking the authority to change the workflow or say no.

This concept is called executive function theft (EFT). As library scientist and research data policy advisor Abigail Goben has put it:

When a leader wonders why strategic priorities aren’t executed, why innovation lacks audacity, or why huge teams deliver small value, it’s usually because the workforce spends its days navigating org debt handed down from someone with more power. For those whose executive function has been systematically depleted while they sit on hold with the help desk or file approval requests, that work has become the job. EFT keeps org debt hidden from leaders; the debt resides in an organizational junk drawer they forget about. And the value-creating work they care about? When that drawer is full, it has nowhere to go.

Individuals can’t retire org debt

Ask any team what’s stopping them from doing their best work and you’ll hear about org debt. It might sound like office politics, lack of role clarity, an inability to make decisions, or even interpersonal tensions. But those are the visible symptoms of what ails the system—of ways of working that rob people of their agency and good sense. These are the folks whose executive function was stolen long ago; they spend their working hours paying interest on decisions made above their pay grades.

In Gallup’s 2023 State of the Global Workplace report, 41% of respondents said they would change their company’s approach to engagement and culture to make it better; that’s survey speak for “fix the company, so we can do work that matters.” We know what needs to change, but most of us lack the power to stop doing bullshit jobs.

That’s why saying “no” to org debt is so challenging. The risk of ignoring leaders’ mandates is greater than simply following the status quo. The effort of trying to disrupt the broken, calcified structures already in place on top of the actual work is too much to contemplate.

Besides, humans are pain-avoiding machines—and addressing org debt is unpleasant. And many companies reward org debt maintainers. Ed, who flies through un-shiny tasks? Long-tenured Alice, who keeps the legacy tech on life support? Cathy, who can move a stuck approval up the chain on the backend of the expense system? In an org debt-ridden system, those folks aren’t just helpful; they’re indispensable. And, they have no reason to fix what’s broken.

Band-aid jobs maintain org debt

The job of the middle manager should be to uncomplicate the flow of value from within an organization to its end users. Instead, it’s mostly a protector of egos above and a judge of output below. When middle managers look to streamline, they want the work to be seen as value add.

See the problem? The word “add” is right there. Subtraction is rarely appreciated.

The perception of loss is a powerful psychological blocker. The discomfort and distress we feel experiencing a loss (be it money, a relationship, or information) outweighs the delight we feel experiencing a gain. The idea of giving up anything in the short term, from an extra process to extra headcount, makes the long-term gains hard to see.

Which means that middle managers will rarely say “Let’s stop doing those reports,” even if they don’t think anyone reads them. As with individual contributors, the risk of ignoring useless mandates is higher than following the standard operating procedure.

In a similar vein, functions like Project management and change management are meant to help a company evolve—but what’s often expected is tracking others’ work, drafting (and redrafting) communications, and influencing stakeholders. These functions have limited authority over the projects they’re tracking and narrating, so their work becomes reporting, massaging, messaging, and creating the appearance of alignment between factions.

This work “around” the work? It’s the birthplace of org debt. The more middle management is incentivized to serve and ascend the hierarchy, the easier it is to generate org debt. Being perceived as valuable holds more weight than generating value. Soon, that’s your work culture: layers of people committed to a strategy of not losing rather than winning.

Efficiency won’t save you

Most leaders want nimble organizations that can deliver year-on-year growth, increased market share, and happy shareholders. But peer deeper into those priorities and you’ll find that the speed and growth that could lift an organization are being sandbagged by organizational debt.

The buzzword of the moment is “efficiency.”Companies are hiring leaders to trim fat; kicking off programs with high-cost management consultants under banners of “Strategic Cost Transformation,”; and restructuring, laying off, and increasing prices in hopes of recapturing the growth experienced during a once-in-a-lifetime crisis of the Covid pandemic.

There’s just one problem: You don’t get long-term efficiency by slashing dollars and headcount. Those are crash diets—the most obvious, least-nuanced plays. Sustainable efficiency doesn’t come from a juice cleanse, but from changing the habits of how an organization moves. Efficiency is found by rooting out non-critical aspects of an operation and the effort required to uphold them. I’m talking about the internal newsletters that don’t increase transparency, and the status report massaged into agreement across functions before it hits a leadership forum. The proliferation of technology has made the creation of more (dashboards! meetings! ideas!) easy. But this is where waste hides. The effort has to be redirected toward work that creates customer value, business growth, and employee satisfaction.

Build the place you want to live

I don’t usually blow past deadlines, but I submitted this article two months late. The early draft was about why org debt exists and what to do about it. I covered the tactics I understand deeply: conduct an audit, start by stopping, run experiments, scale what’s working, and repeat.

While those methods are sound, they’re also easily overcome by org debt’s heft in big companies. Besides, ambitious people prefer to play offense—to create, build, and look to the future. Taming org debt reeks of defense; dismantling the messes our past selves or colleagues have made or investing patience and attention in an endless remodel.

That’s why, these days, I encourage folks to break new ground instead of scraping asbestos out of the walls. Consider any new initiative, program, or project—launching a product, implementing a new tech solution, or re-inventing your performance management process—as a place to install the minimum rules and roles needed to get the work going. Look for a space to establish new norms before the old ones are inherited from the broader company. There, we don’t have to start by subtracting. There, we can build unencumbered. There, we can collaborate with those who see a new life inside the house, and not the house itself, as the ambition to pursue.

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