Lagom and Why Zero Organizational Debt Is the Wrong Goal

I never thought I’d be writing about clothing moths, but here we are.

Last year I had an infestation. I’d missed the early signs until one day it became impossible to ignore. I spent hours every day trying to address it. Once they take over, those little pests are tough to get rid of. It was awful. I wondered how I didn’t see it coming and how I could make sure it didn’t happen again.

The root cause? I simply had too much. Items from two decades ago I never wore. Things I hoped I would wear one day. I couldn’t see what I owned. Small decluttering efforts hadn’t made a dent. The sheer volume created the perfect environment for moths to flourish.

Within two months I’d decluttered 50% of my wardrobe. It was so much effort but it felt so good. A year later, I’m still whittling down, but feeling much closer to being at the “just right” place. Somewhere in the middle of all this, I discovered the Swedish word lagom. It means having just the right amount. Not too much, not too little, but what’s appropriate for our actual life, not the idealized version.

My closet taught me something about organizations: sometimes the problem isn’t what’s broken. It’s what’s accumulated. The decisions deferred, the processes patched together, the relationships neglected, the capabilities we meant to build but never did.

And here's how you know it's gotten out of hand: everything feels harder than it should. Things go slower than they should. Simple decisions require three meetings. Goals that seemed achievable three months ago now feel impossible. The best people seem increasingly frustrated. We're working harder than ever but making less progress. That feeling of pushing a boulder uphill? That's accumulated weight creating resistance we can't quite see or name.

I call this organizational debt or the accumulated weight that slows companies down. Just like homes accumulate stuff over time, organizations accumulate debt. Some of it useful, some forgotten, some actively getting in the way.

The Trap of Zero Debt

Here’s where as leaders we go wrong: we think the goal is zero org debt. No messy processes, no capability gaps, no relationship friction. A pristine organization where everything just works. But the real challenge is not elimination, it’s reaching lagom: just enough debt for productive growth without excess baggage.

It’s an illusion. And chasing it leads to endless initiatives trying to “clean up” everything, while feeling perpetually behind because it’s impossible to reach.

Think about financial debt. We understand it intuitively. Some debt is strategic. A mortgage lets you own a home, a business loan funds growth. The goal isn’t zero debt; it’s intentional debt with a plan. We know debt can snowball when we’re not paying attention: interest compounds, options narrow, the stress builds.

But here’s the thing: with financial debt, sometimes we can’t help it. Job loss, medical emergency, life happens. With org debt, we have more control. We’re choosing to accrue it, even if we don’t realize it.

The problem is that leaders treat org debt like it’s invisible. Unlike financial debt, where monthly statements force us to look at the balance, org debt accumulates silently. We’re too busy working on business goals to notice what we’re borrowing organizationally until something breaks. A key person quits. A launch fails. The team burns out. Goals stay perpetually out of reach.

Not All Debt Is Equal

This is where lagom thinking helps. Not all clutter in your home matters equally. Extra chairs in the garage? You’ll get to them eventually. A leaking roof? That damages your foundation. Same with org debt. I’ve come to think of it as a pyramid, with five levels.

Leadership Debt: When leaders don’t understand the nature of their role, don’t invest in their own development, or operate without clarity on how to lead effectively. This is foundational. If you don’t invest here, it can harm or even kill your business.The lagom amount? As close to zero as possible.

Relational Debt: Broken trust, unresolved conflicts, damaged relationships - especially among leaders or between founders. This erodes culture and threatens the business. Again, keep this as close to zero as you can. It might accrue during crunch times, but if it goes unaddressed for more than six months, it becomes a serious risk.

Reality Debt: Setting goals too big for existing resources. Overpromising and under-delivering. When this settles in, burnout and turnover skyrocket, threatening both goals and reputation. This needs active management.

Systems Debt: Patched processes, manual workarounds, tools that don’t quite fit. This can accrue to some degree, especially for younger or smaller orgs trying to reach product-market fit or just beginning to scale. It’s recoverable.

Structural Debt: The org chart, who reports to whom, whether you’re doing hierarchy or holacracy. This is what most leaders worry about, but it’s actually the most recoverable. You can fix a messy structure. You can’t easily fix broken trust.

Why this order matters

The pyramid reflects both recovery difficulty and foundational impact. Leadership and relational debt take years to repair - if they can be repaired at all. You can restructure in weeks, implement new systems in months. But rebuilding trust after it’s broken? Developing real leadership capability? That’s a different timeline entirely.

Each layer depends on the stability of what’s below it. Strong leadership enables healthy relationships. Healthy relationships allow realistic goal-setting. Realistic goals justify good systems. Good systems determine appropriate structure. You can’t process or structure your way out of broken trust or unclear leadership.

Where We Spend Our Energy

Here’s the pattern I see constantly: leaders spend months agonizing over structural decisions while stepping over the relational and leadership debt that’s actually sinking them.

A company missing revenue targets decides the problem is their structure. Leadership spends weeks debating reporting lines - should they reorganize around product or function? Flatten the hierarchy to move faster? They whiteboard endlessly and finally land on something that feels right.

What they didn’t discuss: the VP of Sales and VP of Product haven’t spoken directly in months. The CEO keeps changing priorities because the board keeps changing expectations. Everyone’s doing two jobs, but nobody’s talking about what needs to stop.

They announce the restructure. Weeks on the structure, two hours on the communication plan.

The result: Two key people quit within a month - the restructure confirmed their belief that leadership doesn’t understand what’s broken. Teams remain confused. Six months later, they’re still missing targets because structure wasn’t the problem.

The structural debt they agonized over? Recoverable. The relational and leadership debt they ignored? That’s what’s actually threatening the business, and it’s much harder to fix now.

Being Intentional

Lagom isn't about achieving some perfect balance and maintaining it forever. It's about recognizing that what's "just right" shifts as your context changes. My closet needs change as my life changes. What felt "just right" five years ago doesn't work now. What's appropriate for one season isn't appropriate for another.

Same with org debt. What’s lagom when you’re well-resourced isn’t lagom when you’re running lean. What’s appropriate with enough capacity isn’t appropriate when everyone’s stretched thin doing multiple jobs.

The key is intentionality. Knowing what debt you're carrying and why. Ideally, having a timeframe or endpoint in mind: "We can live with these workarounds through the end of the fiscal year" or "Once we finish this major initiative, we'll invest in fixing the foundation."

Most of us discover we’ve been accruing debt unintentionally only when problems surface. The leadership team becomes unproductive or conflicted. Goals remain out of reach because of friction between functions. People burn out or leave. A key person suddenly quits, leaving a gap. Everything feels harder than it should, takes longer than it should.

By then, we often don’t even know which debt is the main culprit. We’ve been working in the business rather than on it.

The Lagom Mindset

Just like we wouldn’t mindlessly swipe a credit card without knowing our balance, we shouldn’t mindlessly accrue org debt without recognizing what we’re borrowing and at what interest rate.

Lagom isn’t about perfection. It’s about being awake to what we’re choosing. The Swedes aren’t obsessing over having exactly the right amount of everything. They’re just not mindlessly accumulating or depriving themselves.

Some questions to sit with:

• What debt are we carrying right now that we didn’t realize we had?

• Which layer of the pyramid are we most concerned about versus where we’re actually spending our energy?

• What’s one debt we’ve been intentionally accruing? Do we have a plan for paying it down?

A cluttered home creates a cluttered mind. Unchecked org debt creates a cluttered organization - harder to move, harder to think clearly, harder to know what matters.

The goal isn’t zero. The goal is lagom. Just right for where we are, right now.