TFN#58: 🪜How understanding project and organization debt helps us work and hire better

A few days back, I came across this job listing by Gumroad. And it is something important that we need to talk about. It doesn’t matter whether you work in the software industry or not, it is not at all related. But we will start with this easy software example and work through it.

So, have a look at this job role:

The very first line mentions “technical debt”. One of their main priorities is finding someone who helps them remove “technical debt” from their product.

Now, if you don’t know what “technical debt” means, a simple explanation: while developing software systems, programmers try to write perfect code so that it doesn’t need modification in the future, but that’s an ideal scenario. Sooner or later, in any software, some part of the code has to be changed because of the changes made in other parts of the code over the years. It is inevitable. This is called technical debt. The debt that we have to pay in the future is in the form of code. That’s why it is also called design debt or code debt.

Depending on your interest and work, this may sound abstract. And it is completely fine because now we will shift to our main topic of discussion:

Project debt and organization debt.

But first, is debt good or bad?

Many people fear the “debt.” Because of the negative connotation it carries due to its normal association with money.
But debt is a great instrument that runs the world.
For example, when you work for a company, the company is indebted to you and pays you money. This “owing you something” is good. The same goes for paper money. The money that we hold is a promise by the central bank to pay us in the future when we exchange that note with someone.

The invisible debt of organizations

See, owing people salaries and bills to vendors is just one part of running organizations. But we are talking about invisible debt here.

When we carry out our work, we get involved with the customers, colleagues, vendors and other systems of the organization. We connect with people and make decisions. We create documents. We forge partnerships. We float and execute ideas. We promise offers—all this, contributes to invisible debt called project/system/organization debt.

Let’s take an example

You have been working in an organization for 5 years. When it is time to move on, there are unique challenges for two parties: one for you and the other for your organization.

Your challenge is how can you hand over your responsibilities to your replacement. How can you summarize your 5 years of interactions, decisions, and history with the other person, so that they can carry out responsibilities as well as you could?
One way is to have a brain transplant so that all your experiences are directly transferred to the other person and they just know what they need to do.
Haha, I know that’s not possible yet. (Side note: this reminds me of the movie Matrix. I love this movie. There’s a fascinating scene. In this movie, they can train people on any art or skill just by downloading a knowledge program in their brain!)

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In any case, since we can’t have a brain transplant, the next best thing we normally do is prepare a bunch of documentation and handover it to the incoming fellow. And we sign off.
We have transferred our generated debt to the next fellow.

On the other hand, the organization’s challenge is to make sure that your replacement can learn and adapt. And kind of get up to the speed as soon as possible. In other words, your organization is paying your generated debt through the new person. That’s project debt.
And the cycle goes on.

You’d have realized that every project and organization accurses debt. It is inevitable.

If it is inevitable, why are we talking about this?

Because we can control the rate of the debt increase. And it changes so many things in our world: our career development, personal development, organisational growth, etc.

For a moment, let’s talk about people who increase project debt

You must have come across a particular type of people in your work life: the ones who do superficial work and take shortcuts.
​Shortcuts look like this:

• In building construction, ignoring planning and using substandard materials.
• In product development, skipping market research and ignoring user feedback.
• In software development, superficial testing and hardcoding values in the code.
• In human resources, rushed hiring, and neglecting employee development.

Such activities increase project debt.
When it goes beyond a normal level, the organization would feel the pain in terms of inefficiency, over-budgeting, missing deadlines, higher churning etc.

How to limit project debt in your work?

It should be clear by now that, to progress in a career and fulfil our potential, we have to be mindful of the debt created by us. Because the debt also impacts our reputation. So trying to limit its rate is a good strategy.
These steps help in limiting our debt:

• Giving the best of our capabilities
• Being open to feedback and improving ourselves
• Being explicit about our commitment
• Delegating of work
• Creating Standard Operating Procedures (SOPs)
• Decentralizing decision-making
• Documenting history and key processes
• Inculcating the culture of detachment in the work

What can organizations do?

From the organization’s point of view, the management can take some strategic steps such as:

• Prioritizing quality over speed
• Continuous assessment of key people’s project debt
• Mitigating risk by splitting or limiting the concentration of responsibilities to a selected few (of course, there are exceptions)
• Identifying net negative contributors and replacing them
• Focus on the process and not on the people
• Hiring and retention of people who are net positive contributors and with a healthy debt level

So, as a knowledge worker or a business owner, if you’re feeling any of these pains, have a look at your people and processes. See if this makes sense.

What’s your experience with what I described? Have you experienced any of these challenges and pain points?
​Hit Reply and share with me!

Reads of the week:

I think a year back, I shared this beautiful article by Morgan Housel on expectations debt. I hope you enjoy it as much as I did.