Editorial
The Gist
- Change management challenges. Addressing experience, technical, operational and culture debts for effective change management.
- Innovation in the workplace. Tackling culture debt is crucial for fostering workplace innovation and growth.
- Competitive landscape. Proactively managing various debts strengthens competitiveness in the dynamic market.
Most brands would claim that they have a strong mandate to innovate on behalf of their customers, their employees, as well as their shareholders and other stakeholders. Yet, many are unable to innovate at the rate that staying ahead of competitive pressures and meeting ever-increasing customer demands would dictate.
Let's take a look at some change management challenges that should be addressed in order that brands can innovate.
While there can be many change management challenges standing in the way of this innovation, in this article, I’m going to discuss a big culprit, actually, four culprits, that can all be defined in terms of the debt that they bring to the organization in the form of legacy expectations, platforms and systems and process and operational baggage. We can define these as experience debt, technical debt, operational debt and culture debt. We’re going to discuss each first, then talk about how they can all work together so you can figure out a plan to pay off these debts once and for all.
Let's embark on our change management challenges journey.
Change Management Challenges: Experience Debt
Let’s start with the term that you may be the least familiar with. Though I’m certainly not coining it with the publication of this article, it has been mentioned less than the other types of debt we’ll discuss: experience debt.
Experience debt refers to the difference between what customers expect and what they actually experience from a product or service. When a company compromises on usability, and dare I say, delight, it incurs costs that impact both the customer and the business. These costs can result in decreased customer loyalty, lower customer satisfaction and lifetime value and less word-of-mouth reviews and referrals.
We operate in an environment where ratings and reviews heavily influence purchasing decisions in both B2C and B2B settings, and thus experience debt can severely damage a company's reputation and profitability in the short and long term. If customers have a negative experience, they are more likely to leave negative reviews and deter potential customers. Additionally, negative experiences reduce customer loyalty and the likelihood of recommending the product or service to others, leading to a decline in customer lifetime value.
Experience debt may not be the most common type of debt that is acknowledged by organizations, but it is a critical one, and it can be the most directly outward-facing type as well. Let's continue on our look at some more change management challenges.
Related Article: Business Transformation Strategies: Your Journey to Better CX
Change Management Challenges: Operational Debt
Next, we have operational debt, which is like a pile-up of unfinished tasks and neglected projects that haunts businesses over time. It sneaks up when companies bite off more than they can chew or prioritize certain tasks over others, leaving important ones in the dust. The consequences of this debt are widespread and troubling — decreased productivity, skyrocketing stress levels, employee burnout and a serious blow to morale.
Unaddressed tasks, projects or initiatives that pile up over time create organizational debt. This happens when a business takes on too much work or prioritizes certain tasks over others. The consequences of organizational debt include decreased productivity, employee burnout and low morale.
One of the main challenges of organizational debt is the difficulty it poses in decision-making and prioritization. With a backlog of unfinished tasks, it becomes tricky to determine which ones should be addressed first. This can lead to delays and inefficiencies as employees focus on less important tasks. Moreover, when there is a large amount of organizational debt, it becomes challenging to identify the most crucial tasks or projects, as they all seem equally important in the face of a sizable backlog.
Operational debt can often be a silent problem, because it can often be masked as “just the way we do things here,” which is detrimental from an efficiency standpoint, but can also contribute to culture debt, which we’ll explore in a little bit.
Change Management Challenges: Technical Debt
Next, let’s talk about the type of debt you’re likely most familiar with, even if you are on a marketing or CX team: technical debt. We’ve all been there. It's those quick fixes and shortcuts we take to meet deadlines and get the product out the door. But what many don't realize is that those shortcuts can snowball into long-term issues, affecting maintenance, scalability and the ability to adapt to new technologies.
Like operational debt, technical debt often gets pushed to the backburner, overshadowed by more pressing projects. After all, it doesn't immediately impact functionality or performance, right? Wrong. Left unaddressed, technical debt can quickly become a roadblock to progress, leaving your organization stuck in the past.
But here's the catch: when faced with a backlog of technical debt, it's hard to know where to begin. Prioritizing tasks can become a daunting challenge, leading to decision-making paralysis.
Don't let technical debt hold you back. Join us as we explore its hidden costs and reveal strategies to reclaim your development process. Simplify, optimize and innovate your way to success. Don't let your organization fall behind in today's rapidly evolving technology landscape.
Related Article: Navigating the Martech Maze: Avoiding Debt & Maximizing Value
Change Managment Challenges: Culture Debt
Let’s talk about the last of our change management challenges, culture debt. Just like technical debt, culture debt can have a profound impact on an organization's success. When an organization's culture becomes outdated, ineffective or dysfunctional, it can create a culture deficit that hinders growth and progress.
Culture debt is the responsibility an organization carries for digging out of this deficit, and the implications are far-reaching. It affects the organization's ability to attract and retain top talent, stifle innovation and deliver value to stakeholders.
But what exactly is culture debt? It's the amount owed and the acquired responsibility to address a range of issues. This includes promoting diversity, equity and inclusion, improving communication and collaboration and fostering a culture of continuous improvement. Companies that are deep in culture debt often have low morale on teams, lack of engagement, and when this is problematic enough it begins to affect external parties like customers and partners. Just think of an experience you had when an employee was unengaged and how it affected your customer experience.
These experiences build over time, and can be exacerbated by experience, operational, or technical debt issues as well.
Where to Start
Each of these types of debt can be detrimental in their own ways, or your efforts to “pay them down” and counteract accumulating new debts can be very beneficial to your organization. Where exactly to start is going to depend on your greatest weaknesses and the best opportunities for improvement. Regardless of what those are, the best approach is to start soon and start small.
Acknowledge Where You Are
Acknowledge where you currently are, whether that is through some type of maturity model (there are many maturity models out there to choose from), or some other type of quantitative measurement(s) so that you can systematically track your starting point as well as your progress. And “progress” is the operative word here. It is less about trying to move quickly than it is to make regular, consistent progress toward your goals. Too much change too quickly can also backfire, so think in terms of a slow and steady approach.
Look at Measurable KPIs
Because of the interrelated nature of the four types of debt we just discussed, you may find that focusing on measurable KPIs and outcomes rather than a specific type of debt is a more effective way of proceeding here. For instance, culture debt issues may stem from the technical debt and difficulty of using outdated or overly complex technical systems (i.e., technical debt), or inefficient ways of working (i.e., operational debt), and so trying to separate one from the other may be difficult.
Share Intentions and Progress
Additionally, make sure to share both your intentions to improve change management challenges you’ve prioritized, as well as to share regular progress toward your goals. This will keep teams motivated and might reengage teams that had learned to accept that the current state was inevitable and unavoidable.
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Final Thoughts on Debt and Change
As you can see, to thrive as a business, you need to dig yourself out of debt by addressing your change management challenges. While your organization may not have issues in one, two, or even three of these areas, chances are you are experiencing at least one of these. The good news is that it’s not too late to start paying down your debts, and you can start in small ways as long as you get started, and have a consistent plan to continue to do so.
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