Recently I have co-authored a series of short articles on Strategy Debt with my colleague at INSTEP, Brian Nejmeh. The concept of Strategy Debt arose out of the software industry and the well-established concept of Technical Debt. Our premise is that Strategy Debt can arise from a wider set of organizational circumstances — not just software development practices — and have far wider organizational implications.
The first article focuses on what we mean by Strategy Debt and what happens when it is incurred or retired. We believe that strategy debt is created when companies fail to clarify their intent with stakeholders, especially their own employees who are left to act in self-interested and/or expedient ways – creating unnecessary cost and strategic inefficiencies for the organization over time. Conversely, strategy debt is retired when a company refines, adjusts or clarifies its strategy in order to prioritize and allocate resources more effectively.
The second article is based on a framework we use with our clients called the Strategic Narrative, which has nine elements that comprehensively express a software company’s strategy. The article looks at each of the nine elements and how each can either create or retire Strategy Debt, depending on how accurately and effectively it is expressed.
The third article looks at generic scenarios in Strategy Debt: 1) when strategy is poorly defined; 2) when it is “inaccurate” from a market perspective; and 3) when it fails to drive change/behavior in an organization. These scenarios are not mutually exclusive, but we pulled them apart to look at their impacts separately.
This was a very interesting experience to take a concept from a “hard” disciple like software development and apply it to the “softer” realm of strategy. I’m wondering how the concept resonates with you, and whether you’ve seen other scenarios of Stategy Debt — whether incurring it or retiring it.
I invite you to read these and offer your insights, questions, etc.
Peace and happiness to you in 2022!
Strategy, Creativity, and Leadership 