You've probably heard of technical debt — those coding shortcuts that seem helpful initially but eventually create bugs and slow development to a crawl. Our orgs face a similar challenge: the gradual accumulation of dysfunction that undermines how work gets done.
We accumulate 'org debt' the same way — quick fixes and workarounds that pile up over time. During growth spurts, we focus on shipping and hitting targets while the organizational foundation quietly erodes. We postpone leadership development, ignore brewing conflicts, stick with structures that no longer fit, and make plans based on best-case scenarios rather than reality.
While technical debt breaks our code, org debt breaks our culture. It's the reason our cross-functional projects fail, why good people quit, and why even simple decisions take forever.
The real question isn't whether we have org debt — most companies do. The question is: what specific types are affecting our organization? Without this clarity, we're either paralyzed by the scope of problems or exhausted from trying to fix everything simultaneously.
That's why I've identified five distinct types of org debt: leadership debt, relational debt, structural debt, systems debt, and reality debt. Each type has a corresponding "org smell" — surface indications that help us recognize what needs attention and where to intervene.
The Five Types of Org Debt
Leadership debt - Leadership capabilities that haven't kept pace with org needs
Org smells: Polite conversations that avoid real issues, leaders who are bottlenecks, status report meetings
Relational debt - Damaged or neglected relationships within the organization
Org smells: Perpetual friction between areas, information hoarding, blame games when things go wrong
Structural debt - Org design that doesn't match how work actually gets done
Org smells: Unclear decision rights, people bypassing formal approval chains, missing key functions
Systems debt - Manual processes and disconnected tools that create friction
Org smells: People spend more time fighting systems than doing work, tools don't integrate, manual data reconciliation
Reality debt - Unrealistic assumptions about capabilities and constraints
Org smells: Burnt out teams, overcommitment with unrealistic timelines, goals requiring everything to go perfectly
Why Org Debt Matters
Here's what makes org debt particularly dangerous: these problems reinforce each other. Just like compound interest, the effects multiply rather than simply add together. Leadership problems create relational issues, structural misalignment enables systems dysfunction, and unrealistic assumptions make everything worse. These debts are interconnected, requiring coordinated intervention rather than isolated solutions.
Some amount of org debt is inevitable as organizations grow and change. Getting specific about which types you're dealing with changes everything.
Want the complete diagnostic framework?
Read the full piece here for all five debt types, how they compound each other, and practical guidance on where to start addressing your org debt.
Love this framework, Suzan!
I find the framing around debt to be fascinating! Going to have to think about it more. It reminds me a bit of the concept of "tensions" in Holacracy in that the "debt" is the distance between reality and what could be, if that makes sense.