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Organisational debt is the build-up of inefficient or ineffective processes, practices and technologies over time. Some organisations, let it build so much that getting stuff done is like walking through setting concrete. It’s frustrating and slow and everyone struggles to be at their best.
As a manager, knowing how to tackle organisational debt in the workplace can be a daunting task, particularly as no one sets out to build a bureaucratic, slow-moving organisation. It's an unintended consequence of risk aversion and policy build-up that eventually grinds productivity to a halt and frustrates team members no end!
I love the term organisational debt because burdensome bureaucracy is not just frustrating it costs money. It takes from the bottom line often with plenty of other consequences too like the loss of good people.
Examples of organisational debt
Someone messed up and we implement a policy to prevent it from happening again
More than likely you or someone you know has worked in an organisation where someone messed up and a policy has been implemented a policy to prevent it from happening again. The mistake may be a one-off or a learning opportunity but instead, a blanket policy is put in place for all employees.
One example from a technology client we worked with previously was how their expense policy became so burdensome they lost employees over it. In their earlier years, they had a company credit card system that employees who travelled frequently could use for business expenses.
The system worked pretty well until an employee decided to put his new kitchen appliances through the company card. 😬 Not a great idea and as a result, all employee company credit cards were revoked and a new approval system was implemented, despite only one employee being at fault. Expenses were then pre-paid by employees, applied for and approved by two layers of management.
The system meant that expense payments were often delayed by months, with some employees owed more in expenses than their salary. The time required for employees, managers and finance as well as the cost of the technology far outweighed the original cost of the employee misdemeanor.
Alternatively, the original solution could have been to discipline the employee. However, changing the complicated process back to a simpler one was a tricky sell, after all the ‘investment’ that was put into defining it.
Another example was a professional services company that implemented a form request system for stationary. What started as a well-intentioned money-saving exercise developed into an expensive time-wasting exercise that left employees feeling mistrusted and undervalued.
The Cost of Ignoring Organisational Debt
Here at A Better Work - we know from working with clients that organisational debt is like a silent saboteur that creeps into your team's workflows. It's those outdated processes, unnecessary bureaucracy, and time-consuming tasks that hinder progress.
Process and policies build and accumulate over time, often layered in ways that make progress painfully slow but difficult to unpick.
These lengthy and outdated structures are often overlooked as 'how we do things around here'. Whether that’s on an organisational level or maybe even with your own team, yet they are rarely considered a significant business expense. That’s why we are here, challenging you to change your thinking, so you can identify where organisational debt may have built up in your team or organisation. Then plan to tackle it!
Identifying debt in your team
Experimentation is your secret weapon against organisational debt. It's all about trying new approaches, adapting to change, and continuously improving.
So firstly, identify where organisational debt may exist in your team. If you are looking for inspiration these examples can be a good starting point but feel free to involve your team members and get their thoughts on what can be changed or improved. They may have a much clearer idea of process or procedures they encounter daily that could be changed. 🤔
This week's tweak for better work is to identify and reduce organisational debt
Example actions:
Meetings: If you host regular meetings, look at the invite lists, is everyone necessary? Do they know why they are joining (their role) and the purpose of the meeting? If not, adjust. Taking 1 participant with an average wage of €80k out of a one-hour meeting every working day will save over 10k per year (more when you add benefits, pension etc).
Reporting: Are you involved in the production of reports that are dust collectors? Whether as a recipient of the report or a producer of it - what is actionable? How is it helpful? Can it be simplified, reduced, or eliminated? Can you approach stakeholders with an alternative or even experiment with stopping the report altogether?
Communication: If it can be said in 10 words, do we need 8 pages? Simple, plain English, a scannable layout, and fewer words can save thousands of hours for writers and readers.
Process engineering: Are you involved in a regular process that seems to make no sense? Question it, investigate, and offer alternative solutions.
Reducing organisational debt through experimentation
Experimentation is a proven method for initiating an impactful transformation. In one of our latest blogs, we talked you through this powerful, yet underutilised process.
Here's a step-by-step guide to implementing experimentation within your team:
Identify Organisational Debt: Take a close look at your team's processes. What's slowing you down? What could be more efficient?
Gather Your Team: Collaboration is key. Involve your team members in identifying and addressing organisational debt.
Brainstorm Solutions: Encourage creativity. Generate ideas for experiments that could solve your organisational debt challenges.
Plan and Implement: Use the Experiment Planner to outline your experiments. Assign responsibilities and set a timeline.
Evaluate Results: After the experiment, gather data and feedback. Did it work? What can be improved?
Iterate and Refine: Learn from each experiment. Use the insights to refine your processes and continuously reduce organisational debt.
Explore Our Experiment Template
Ready to take your quest for better work environments to the next level? Organisational debt may be a formidable opponent, but with experimentation and our Experiment Planner by your side, you're well-equipped to overcome it.
So, why wait? Get your Experiment Planner now!
Explore Our Experiment Template and Workshop Plan
Ready to take your quest for better work environments to the next level? We have created an Experiment Planner. This download not only walks you through the steps to create a powerful and effective experiment plan but also gives you a workshop format so that you can involve your whole team or even multiple teams to encourage innovation and achieve successful meaningful change.
There are loads of other examples. Most importantly offer alternatives, communicate clearly and transparently why you are suggesting change, and experiment with alternatives that are safe to try to create evidence of a better less bureaucratic, and costly alternative.
Let's make work better together.
Michelle Wallace
Founder
A Better Work
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