By Laura Lee, Senior Advisor at Pivot >

Every company carries debt that never appears on a balance sheet. Operating debt lives in the inefficient process that still technically works, the org chart that outlived the strategy it was built for, and the incentive plan still rewarding behavior the market stopped valuing years ago. Like technical debt, it is invisible by design, with no enforced paydown schedule. It only becomes visible when someone tries to build on top of it, and discovers the foundation cannot bear the weight.

I have watched this dynamic from both ends. At YouTube and Twitch, companies built to move quickly, experimentation was inherent to how the organization operated, and paying down operating debt was part of the normal business rhythm. I sat on the boards of the Arena Group and MediaCo as they sought new cadences amid industry headwinds, carrying operating debt that had outlived the conditions it was built for. The difference was rarely a lack of ambition or insight. It was clarity: a North Star set at the top rarely cascades down to the individual contributor level, and that gap widens further when the North Star itself shifts without swift communication to align goals up and down the chain. The stronger operating ethos combines both: the discipline that keeps debt from compounding, paired with the rigor and clarity to clear it once it takes hold.

Where the debt accumulates

Operating debt rarely appears through a single bad decision. It accumulates through a series of standalone reasonable ones. A team preserves a process because changing it would introduce too much uncertainty into hitting quarterly goals. A product line remains active past its useful life because shutting it down means acknowledging the prior bet didn’t work. A compensation structure keeps rewarding an old annual plan’s growth metric because no single executive is incentivized to challenge it and board governance lags. 

None of these choices look reckless when they are made. Each is individually justified given the circumstances at the time. But years of decisions made in isolation compound, and the debt they leave behind can leave an organization unable to keep pace when the market shifts. For public companies, that tension is sharper. Quarterly earnings compete directly with the case for investing in the future. Debt builds quietly until a seismic shift, a pandemic or the rise of AI, drags it into the open, often catching a company flat-footed mid-turnaround. By then, most of the underlying problems have usually already been identified internally, but the new conditions likely require reevaluation. Navigating that well requires an effective board with a unified view on coordination and which bets are actually worth making.

The useful first step is to take stock. Do your own due diligence: take an honest accounting of how much operating debt sits on the books, and compare it against your North Star and the metrics driving you there. How much is it costing the organization every quarter it goes unaddressed? Knowing that number is one thing. Building an organization willing to act on it is another.

Changing the operating ethos

An operating ethos does not change because leadership declares that it should. It changes when the structure adapts to the conditions actually in front of it, not the ones it was originally built for.

At YouTube, a core part of that ethos was the willingness to deprecate products that were not working, on a systematic basis rather than an emotional one. It’s a mechanism that doesn’t exist at every company, but can be built with the right foresight. Having those conversations early aligns the team, management, and the board around shared success metrics and timelines, while still leaving room for real debate as the work unfolds. Without it, the culture can revert to protecting sunk costs and fiefdoms. The transformations at the Arena Group and MediaCo depended on the same principle: the ethos shift that stuck was thoughtfully integrated into the business and reinforced by force expediters. 

Force expediters

As organizations flatten and lean more heavily on player-coaches rather than layers of pure management, one function becomes disproportionately important, whoever ends up filling it: identifying the logjam slowing a project today, and the one likely to slow it six months from now, and then working the actual mechanics of a solution inside a matrixed structure without controlling every lever needed to do it. I like to call this role the force expediter.

When effectively harnessed, a force expediter can produce a step change in a company’s trajectory, clearing debt faster than the organization could on its own. That takes a distinct kind of hire, someone who can move quickly inside an evolving operating ethos rather than waiting for it to settle. Establishing the right conditions for that person to succeed is imperative, a responsibility shared by management and the board alike. It means confirming that the kill dates and success metrics set before an initiative launched are still being enforced once they drift, or decisively revised as new data comes in. It requires a deft cross-functional approach, threading decisions between finance, sales, and product while keeping velocity intact. And it means embracing a culture of transparency, one management upholds day to day, and the board is ultimately responsible for safeguarding.

None of this works if the hire doesn’t embody the ethos the organization is trying to build. Someone who doesn’t isn’t an accelerant. Debt only clears when management can see real progress against the timeframes it set, and the board has a framework sharp enough to judge whether that progress holds. As the force expediter proves out, that scrutiny can ease, not because the debt is gone, but because managing it becomes part of how the organization runs. 

Accountability runs through incentives

Accountability itself holds no weight without an incentive structure to match it. Real change requires incentives, culture, and accountability tied to the same North Star, with teams sharing the same performance goals. Without that alignment, processes remain disjointed, and change becomes hard to sustain. Getting a turnaround to hold means pushing, at both the management and board levels, to rebuild the incentive structure early alongside the strategy rather than after it.

This only works if the senior sponsor doesn’t become the bottleneck. Having an ultimate decision maker seems more efficient, but can end up disempowering teams. The answer is a tiered system of checkpoints: force expediters closest to the work make the call within a defined scope, and escalate only when a decision clearly exceeds it. Escalation itself has to stay light: standups built for quick decisions, not a process that demands a comprehensive deck or memo. Detailed documentation still has its place, but only when a decision genuinely needs to be debated, not at every checkpoint.

The debt does not resolve itself

Companies that manage this well are not under less pressure to change than the ones that struggle. They face the same market shifts, the same competitors, the same investors asking the same hard questions. What separates them is discipline, paired with the courage to admit when something isn’t working and adjust before the debt compounds further. Proactively addressing key issues, empowering force expediters, and building in true accountability will ensure you’re moving forward, and not standing still.