Introduction

Ask any founder or operator what’s holding their team back, and they’ll likely mention time, talent, or money. But there’s another barrier that’s harder to see — and even harder to fix — until it’s too late:

operational debt.

Operational debt is the accumulation of messy, incomplete, or outdated processes that grow silently in the background of a business. It builds up when you prioritize speed over structure, short-term wins over long-term clarity, or temporary workarounds instead of foundational systems.

Abraham Sanieoff sees operational debt as one of the most under-addressed threats to organizational health. And unlike financial debt, there’s no monthly statement to remind you it exists — just the growing friction of a business that’s harder to run than it should be.

In this article, we break down what operational debt is, how to recognize it, what it costs, and how to pay it down — before it compounds.

Section 1: What Is Operational Debt?

Operational debt is similar in concept to technical debt. It refers to the gaps, shortcuts, and inefficiencies created when a company makes decisions based on speed or urgency rather than long-term integrity.

That could look like:

• Using spreadsheets instead of a CRM
• Hiring without formal onboarding processes
• Launching products with undocumented workflows
• Managing teams without clearly defined roles or responsibilities

None of these choices are bad on their own — in fact, they’re often necessary in early stages. But when temporary solutions become permanent without being upgraded or standardized, debt builds.

“Operational debt is what happens when your systems don’t evolve as fast as your team or your goals.”
— Abraham Sanieoff

Section 2: How Operational Debt Accumulates

Operational debt tends to grow during inflection points — when the business is scaling, hiring, or pivoting fast.

Here’s how it shows up:

1. Rapid Hiring Without Infrastructure

Adding headcount without updating processes or documentation leads to a team that operates on assumptions rather than standards.

2. Siloed Decision-Making

When each department creates its own systems without coordination, misalignment becomes the default.

3. Lack of Defined Ownership

If no one knows who’s responsible for a task, it either stalls or gets done five different ways — none of them consistently.

4. Overreliance on Individual Memory

A team might operate fine while the same few people hold institutional knowledge — but as turnover begins, that knowledge disappears.

These are all symptoms of short-term thinking that go unresolved because teams are focused on urgency — shipping, hiring, hitting targets — without stepping back to evaluate how they’re doing it.

Section 3: The Real Cost of Operational Debt

Unlike financial debt, operational debt doesn’t show up in your bank account. It shows up in the form of friction, burnout, and missed opportunities.

Here’s what it costs your team over time:

• Decreased Efficiency: Work slows down because systems don’t support execution.
• Confusion Around Roles: No one is quite sure who owns what.
• Increased Onboarding Time: New hires struggle to ramp up.
• Internal Miscommunication: Teams operate with different assumptions.
• Decision Bottlenecks: Things stall because approval paths are unclear.
• Reduced Morale: Frustration grows when high-performers are blocked by internal chaos.

“The more debt you carry, the more your team wastes time on the wrong problems.”
— Abraham Sanieoff

In fast-moving environments, these costs aren’t always visible — until they show up as missed deadlines, dropped handoffs, or employees quietly disengaging.

Section 4: Why Scaling Amplifies Operational Debt

One of the biggest misconceptions Abraham Sanieoff sees in leadership teams is the idea that growth will fix the cracks. In reality, growth exposes them.

When you scale a company without cleaning up the foundation, three things happen:

1. Broken processes replicate faster
   A small inefficiency with five people becomes a massive drain with 50.
2. Decisions become harder to unwind
   The longer a team sticks with a poor system, the more painful it becomes to change it.
3. Trust and morale erode
   As debt accumulates, employees lose faith in leadership’s ability to create a functional environment.

Operational debt doesn’t just slow growth — it undermines it. And the longer it goes unaddressed, the more expensive it becomes to fix.

Section 5: How to Identify Operational Debt in Your Company

You don’t need a consulting firm to tell you whether your team is carrying operational debt. Start by asking a few questions:

• Are your best people spending time fixing internal issues instead of doing strategic work?
• Do new hires take longer than expected to become productive?
• Are decisions frequently delayed because the process isn’t clear?
• Do team members regularly duplicate efforts?
• Is your tech stack bloated, outdated, or misaligned with workflows?
• Are employees constantly escalating small issues that should be self-resolving?

If you answered yes to more than one, there’s likely a layer of operational debt slowing you down.

“You don’t need to overhaul everything at once. But you do need to stop pretending the chaos is normal.”
— Abraham Sanieoff

Section 6: How to Pay Down Operational Debt — Without Burning Out Your Team

Fixing operational debt doesn’t mean pausing the business. It means layering in improvements gradually, intentionally, and visibly.

Here’s how Abraham Sanieoff recommends approaching it:

1. Audit Your Workflows

List out the core processes that support your business: onboarding, hiring, client delivery, project management, reporting. Document how they actually work today — not how you wish they worked.

2. Assign Process Ownership

Every system needs an owner. That person doesn’t have to do all the work, but they’re responsible for maintaining and improving the system over time.

3. Standardize Where It Matters

Don’t standardize everything. Focus on high-impact processes that are frequently used, prone to error, or tied to revenue.

4. Eliminate Redundancies

Cut tools, steps, or reviews that don’t serve a real purpose. If two platforms do the same job, pick one.

5. Create Feedback Loops

Make it easy for your team to flag inefficiencies or blockers. The people doing the work usually know where the friction lives.

6. Revisit Quarterly

Systems decay. Build a habit of reviewing and adjusting operations every quarter — not just when things break.

Paying down operational debt is not a one-time project — it’s an ongoing discipline.

Section 7: What High-Functioning Teams Do Differently

Abraham Sanieoff notes that the highest-performing teams aren’t just faster — they’re more aligned. Their operations reinforce focus, clarity, and execution.

What do they have in place?

• Defined Roles & Responsibilities: Everyone knows what they own.
• Consistent Processes: Key workflows are followed consistently.
• Centralized Documentation: Information isn’t hidden in people’s heads or Slack threads.
• Clear Decision Paths: It’s obvious who decides what — and when.
• Proactive System Maintenance: Leaders invest in keeping operations clean.

These teams move faster not because they work harder — but because their internal friction is low. That’s the competitive edge.

Conclusion: Clean Ops Scale — Broken Ops Break

You don’t need to chase perfection. But you do need to build infrastructure that can support your team at the speed you’re growing.

Operational debt will always exist in some form — but it doesn’t have to be your company’s limiting factor.

“Growth reveals whether your operations were built to scale — or held together with duct tape.”
— Abraham Sanieoff

Start with the workflows that cause the most frustration. Clean them up. Document them. Assign ownership. And keep going. Every step you take to reduce operational debt gives your team more space to focus, execute, and thrive.

If your business is growing but it’s getting harder to manage, the issue probably isn’t your people — it’s your systems. And the earlier you fix them, the smoother the road ahead.