Organisational Debts

Organisations with immature delivery capabilities can become debt-laden very quickly.

There are many forms these debts can take. We are all familiar with financial debt, which comes primarily from unchecked over-investment. There is also technical debt, which is incurred when organisations take engineering short-cuts to attempt to achieve results faster than what is sustainable. Governance debt — a term I first heard from a colleague KJ — is incurred when insufficient or inappropriate oversight is carried out over key decisions. In organisations that also have personnel issues, the above forms of debts can be compounded by

  • knowledge-deficit debt, which happens when a person/team with a deficit of required knowledge is put or injects themselves in a decision-making position, and
  • trust-deficit debt, which happens when every decision/action is viewed suspiciously by others and actively undermined.

Getting out of organisational debts is hard work but it is unavoidable if an organisation is to survive. Start by recognising the different forms of debt. Restructure them to ease the repayment if possible. But, ultimately, the most important thing is to live within one’s means and not overreach.

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