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Monday, June 12, 2020

Going into Debt

You’ve had a tough week in a tough month. Work is piling up and there’s more pressure than ever to “make the numbers” and save the CEO’s butt at the end of the quarter. To cap it all, a problem has landed on your desk that could affect several of your best customers and lower sales dramatically until it’s fixed. What do you do?

For tens of thousands of managers, the answer is to take on more “debt.” What many, maybe most, will do in a situation like the one I described is find a shortcut; a quick fix that will deal with the immediate situation and get things back on track. It doesn’t solve the underlying problem, but it works as a piece of duct tape to patch it over temporarily. These managers have taken on a debt: a debt in terms of unpaid time and care owed to running their operation correctly. They probably fully intend to go back and redeem the debt to proper management, when they have time to deal with the problem fully. But intentions are not actions. Given the constant pressures most are under, the chance of them paying off their debt is remote.

So it goes on, with shortcut after shortcut and quick fix after quick fix. Debt after debt is taken on and few are redeemed. In time, the debt owed to sorting problems out correctly piles up into a mountain that’s unstable and could come crashing down at any moment. The managers know it’s there. The sight of it looming over them only adds to their pressures and anxieties. Still they go on incurring more debts, because it seems there’s no other way.

Taking on debts you can’t repay is a short route to bankruptcy. Organizations that encourage, even force, managers to pile up debts in the form of unstable workarounds, obsolete technology and unfulfilled promises to employees are on the same path. In the holy name of short-term expediency they’re mortgaging their longer-term ability to survive.

Bankruptcy is the same whether its financial, intellectual or a total collapse of organizational systems. It’s the end of the road, when all debts fall due and there’s nothing to pay them with. Organizations can sometimes find a buyer, but individuals have only the options of burnout, resignation or dismissal. It is worth the risk?

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