Why Organisational Debt Is Such a Powerful Concept
Have you ever felt like the weight of unfinished tasks and unresolved issues is slowing everything down? Whether you’re running a business, leading a team, or simply trying to keep your life on track, there’s a concept that perfectly captures this reality: Organisational Debt.
I first came across this term in a tweet from Scott Belsky, and it immediately caught my attention:
“Organizational debt is the accumulation of changes and decisions leaders should have made but didn’t.”
The phrase comes from Steve Blank, a tech entrepreneur who borrowed it from the world of coding. In tech, technical debt describes the shortcuts taken to deliver a product faster—choices that inevitably lead to problems down the road. Blank saw the same phenomenon in organizations, coining the term organizational debt in 2015.
“Organizational debt is all the people/culture compromises made to ‘just get it done,’” Blank wrote.
And that’s the tension so many of us face. We’re in a rush to deliver, meet deadlines, or get the next project moving. But those compromises stack up, and sooner or later, they come back to bite us.
What Is Organisational Debt?
At its core, organisational debt represents everything that should have been done to maintain peak health and efficiency, but wasn’t.
Processes become messy. Decisions get postponed. Tough conversations are avoided. And as time goes on, the cumulative weight of these unresolved issues slows progress and erodes trust.
Think of it like a financial debt. At first, it feels manageable. But over time, the interest compounds. Left unchecked, organisational debt leads to a culture of frustration, inefficiency, and burnout.
The Personal Parallels
Here’s the thing: organisational debt isn’t just a workplace concept. It applies to life, too.
In our personal lives, we accumulate “life debt” when we avoid addressing what really matters. Maybe it’s failing to have that hard conversation with a loved one, neglecting our health, or ignoring financial issues. Every compromise adds to the weight we carry.
Like organisational debt, life debt doesn’t just disappear. It grows until we confront it.
Why Naming It Matters
The power of the term “organisational debt” lies in its ability to make the invisible visible. Once you name the problem, you can start to address it.
Without naming it, it’s easy to dismiss those unresolved issues as “just the way things are.” But when you see it for what it is - a debt - you can begin to strategise a way out.
The Cost of Avoidance
So why do we let organisational debt accumulate?
We are never living or working in ideal circumstances. There’s never enough time, or money, or bandwidth. So we compromise.
But when we compromise on the –
same things…
long enough…
without reckoning with the cost…
we accrue debt in the overall ‘organisational landscape’ in which we’re operating – in life or work.
We might be compromising on doing the hard work of standardising and documenting operating procedures, or compromising on doing the hard work of getting organised in our life admin so we stop missing bills that are still going to that old address.
Often, it comes down to three things:
Speed Over Stability: We prioritise quick wins over sustainable processes.
Fear of Disruption: We avoid rocking the boat with hard decisions.
Overwhelm: We feel there’s no time or money to fix the underlying issues, so we patch them instead.
But avoiding these tough decisions only creates more work and stress in the long run.
How to Pay It Down
If organisational debt is weighing you down (and let’s be honest, it’s weighing all of us down), here’s are some of the ways we can start to address it:
Name the Problem: Recognise where compromises have been made and what’s piling up.
Start Small: Tackle one area at a time. Whether it’s fixing outdated processes or having that overdue conversation, small wins build momentum.
Engage Others: Organisational debt is rarely a one-person fix. Gather those affected and get everyone invested in the solution.
Prioritise Long-Term Health: Shift your focus from short-term gains to building sustainable systems and cultures.
The Opportunity on the Other Side
There is good news. Tackling organisational debt isn’t just about eliminating pain points. It’s about unlocking potential.
When you clear the clutter, you create space for innovation, trust, and growth. Teams function better. Relationships deepen. Progress accelerates.
It’s not easy, and it won’t happen overnight. But the effort is worth it.
Where to Begin
The first step to addressing organisational debt, whether in our workplace or our personal life, is to have the courage to name it.
As I’ve reminded myself many times, the difference between where we are and where we want to be is often the painful decisions we’re unwilling to make.
Sometimes it is within our power to make those painful decisions all by ourselves. But a lot of the time we need wider buy-in. Changing culture and processes in an organisation, or a family, is not typically going to happen most successfully by the actions of one person, and it’s not going to happen overnight. You need collective action, sustained over time.
And that starts with discussing the problem.
And that starts with naming the problem.
The sooner we make those decisions to address the problem, the sooner we can move forward with clarity, purpose, and freedom from the weight of unresolved issues.
So, what’s one area of organisational or personal debt you can start paying down today?