Do you have “people debt?” Pay it off in three simple steps - Dignify
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Do you have “people debt?” Pay it off in three simple steps

Wednesday, June 19, 2024 - Joe Kiedinger

Have you ever heard of the term “people debt?” It’s an interesting term I found out about when I read “People Debt: The hardest business debt to pay back,” an article by Matt Bradburn. Bradburn writes that people debt is the “accrual of poor process, documentation, communication, decision making and employee relations through default, not design.”

I liked the caveat at the end of that definition – “by default, not design.” When we talk about internal problems or poor company cultures, they almost never come around by design. Nobody tries to bring them about, they just kinda happen. Bradburn writes that people debt accrues by default when organizations try to prioritize speed and efficiency above all else. This mentality is especially prevalent in smaller startups.

When this happens, other things that are equally as important tend to fall to the wayside, often without anybody even realizing it. Bradburn gives a few examples, including but not limited to: a lack of structure in the hiring and onboarding process for new employees, a lack of clear goals, a lack of ability to deliver feedback to employees, and much more, including and up to even a lack of clear job descriptions.

At Dignify, as a small SaaS company, we’re fast and efficient – it’s incredible to watch my team in action. Their ability to quickly satisfy clients and handle emergencies blows my mind every time. However, we know that speed and efficiency can’t come at the expense of other things. Speed and efficiency show up in your organization when your employees are supported with the systems, processes, and clarity that they need to do their jobs most effectively.

As a leader, founder, or owner, think about this from an employee’s perspective. How can you be expected to adjust to a culture where speed and efficiency are prioritized, but you don’t have anything that you need around you to do that? Think about trying to do a job where you might not have the clearest description of what you’re doing, you don’t have an extensive and careful onboarding process, you don’t have clear goals to achieve, and you don’t receive feedback on how you are doing. Just on those three points alone, you can start to see just how difficult that might be.

So – how do you pay your people debt? How do you become fast and efficient?

1. Hire right and place right

You need a thorough, structured hiring process to really understand who a person is, what they excel at, and what motivates them. With that info, you can make a much more informed decision about how well they’ll perform in the role and your work environment. Your job is to find the right fit. You wouldn’t put a washing machine in a restaurant to wash dishes, or a dishwasher in the laundry room to clean clothes! Everyone is good at something – you just need to find the best match for your team, your company, and the role they are filling.

2. Systems and processes

Once you’ve hired, onboarded, and placed your employees, make sure they have everything they need to do their jobs well. Ensure they understand how their role fits into the overall vision for the team or company, the goals you’ve set for them and the team, and the processes and procedures they should follow daily to be successful and hit their targets.

3. Communication and support

When you have hired and placed the right people and given them what they need to succeed, don’t just cut them loose. Stick around. As Bradburn writes to wrap up his article, you need to make regular one-on-ones a priority and make sure your communication (including feedback delivery) is consistent. Listen to their needs and perspectives and understand what they need from you as a leader to be as successful as they can be in their role.

When it comes to running a team or a business, especially a smaller one – speed and efficiency have to be a priority. We all know that. However, you can’t expect people to be fast and efficient without the right foundation under their feet. To achieve the pace and efficiency you’re after, you need to have all the right people in all the right places, you need to understand who they are and how to motivate them, you need to surround them with the systems and processes they need to succeed, and you need to be constantly present to support them as their leader. Pay off your people debt, people!


ACTION PLAN: Step back, slow down, and assess the overall state of your organization or team. Make sure that you are not building up people debt by sacrificing things employees need for the sake of speed and efficiency.

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