When Agile Isn’t Enough: The Cost of Operating Model Debt
You’re familiar with tech debt—clunky legacy systems, spaghetti code, and shadow IT duct-taped across platforms—and what it looks like when the codebase can’t keep up with the business.
But what if your biggest slowdown isn’t in your tech stack…it’s in how your company works?
That’s Operating Model Debt. And just like tech debt, it doesn’t stay hidden for long.
It manifests in missed delivery dates, siloed teams, unclear priorities, and burnout from yet another reorganization that didn’t stick. It’s when strategy sounds good on paper but never makes it off the slide deck. And while it may initially feel internal, it eventually impacts customer experience, talent retention, and market performance.
This isn’t a tooling problem. It’s not something you fix with a new framework or an off-site. And it’s hard because:
Teams are exhausted by change that doesn’t lead anywhere
Silos and hierarchy make collaboration painful
The shift in mindset—and behavior—has to start at the top
The best talent leaves. Customers drift away. Market share disappears.
The organizations that confront Operating Model Debt head-on move faster, attract better talent, and outpace their competitors.
So, let’s define Operating Model Debt, how it shows up, and what you can do about it.
What Is Operating Model Debt?
Operating Model Debt is the compounding cost of continuing to run your business on outdated structures that weren’t designed for speed, customer connection, or measurable business impact.
It’s not a broken tool or a missing headcount. It’s deeper.
It’s when the way decisions are made, priorities are set, and work is organized no longer fits the complexity or pace of your business.
Where tech debt slows developers, Operating Model Debt slows everyone. You see it when:
Teams duplicate work or operate in silos, with fiefdoms sprouting up and identifying their own isolated ways of working
Strategic initiatives stall because no one knows who owns what
Priorities shift like sand because there’s no clear governance
Internal tools are launched with no thought for the people who support them
It gets baked into the culture. Into the cadence. Into the backlog. And it ultimately stands in the way of your journey to becoming a high-performing organization.
What It Looks Like In the Wild
Even if you’re not familiar with the term Operating Model Debt, you've definitely experienced it before.
Here are two real examples from the field with a diagnosis on how these well-intentioned organizations found themselves off course.
The Blanket Report
Every modern organization has processes around reporting, data collection, and insights. But what happens when you lift up the hood on something seemingly simple, like a dashboard, and find out the whole engine needs to be rebuilt?
That’s exactly what we encountered in our work to shift the operating model of a Fortune 500 CPG organization.
As part of our scope, we were standing up new product teams inside their data organization. Our first assignment? Build executive dashboards. Something clean, fast, and reliable. Easy enough, right?
But here’s where it got interesting: when we started asking, “Who’s the user?” we didn’t just mean which exec is consuming the data. We meant: who’s actually touching it? Who's pulling it? Who’s stitching it together, every single week?
Because even inside the four walls of a company, a user is a user. And in this case, the “customer” wasn’t just the C-suite, it was also their assistants, analysts, and chiefs of staff. The people who burn a chunk of every Monday pulling together reports for leadership meetings.
And wow, had those reports evolved.
What started years ago as a simple, single-page printout had grown and grown and grown. First to 11x17, then to something even larger. Eventually, the report became so unwieldy that people started calling it The Blanket Report because yes, they physically folded it over their arms like a blanket as they walked into meetings.
The most painful part? Not just the paper. Not even the formatting. It was the data drift.
Each department pulled their own version of the data at different times, using slightly different queries. By the time the Monday leadership meeting rolled around, half the room was arguing about whose numbers were "right" before a single decision could be made.
Millions in compensation. Hours in reporting. No single source of truth. And no solid foundation for basing decisions that would impact teams across every function in the org.
This is what Operating Model Debt looks like in the wild.
The teams didn’t get to that Blanket Report overnight. They arrived over time as needs became more complex, but a focus on outputs rather than outcomes created an illusion of progress. They were just slapping Band-Aids on a process that no longer worked.
No one wakes up and chooses to build a broken system. No one asks for a Blanket Report. But inch by inch, team by team, workaround by workaround, this is where it landed.
The 40-Screen Call Center
Let’s look at another example to highlight how easy it is to mistake shiny new tech and project-based mindsets for solving problems that will endure beyond launch.
At another Fortune 500 organization operating in the healthcare sector, digital product teams had spent years striving to enhance the front-end experience for their customers. Think: self-service calculators, benefits finders, claims checkers. Tools designed to help people get answers fast, without having to call support.
On the surface, it appeared to be a success. The digital experience was sleek. The front door to the business was beautiful.
But what was missed—what a lot of orgs miss—is what happens when those tools don’t work.
As plants within the call center, we saw firsthand what it was like for agents who picked up the phone when a customer couldn’t log in or figure out how to use one of the fancy new widgets.
What we saw was staggering.
The agents were sitting in front of two monitors—pretty normal—with anywhere from 30 and 40 different applications open at all times. Not normal.
Each application was built during a different “project.” Each had a narrow purpose. None of them talked to each other. If a customer called with a billing issue related to a tool launched a year ago, the agent had to manually dig around in the right interface, assuming they could even find it. Nothing was integrated.
Why? Because by the time each customer-facing tool shipped, the project budget had run out. Teams had delivered the external experience, declared success, and moved on without ever circling back to integrate the backend for the people who support it.
So what was the plan for internal support? “They’ll just open a new screen.”
Multiply that by 30.
What they ended up with was a frontline employee, arguably the most important one in the company, spending half their shift toggling between broken systems, hunting for answers, and trying not to scream. And when they do leave (which many do), they take with them institutional knowledge that was never written down, never shared, and never documented in a system anyone can trust.
That’s Operating Model Debt.
Not just the debt of one unfinished project, but the compounding effect of dozens of “finished” projects that never thought past launch. Projects that never included the humans who would support them. Projects that were optimized for the customer, but forgot about the people serving that customer.
This is what happens when the initiative is over, but the need is not. When the budget ends, but the work doesn’t. When you say you care about experience, but only mean the first screen someone sees.
If a product team had been in place, the outcome would have been different. Because products don’t stop when you ship. Products keep going. They keep integrating. Keep evolving. Keep delivering value to every user.
That’s why we love the phrase, “Projects end. Products endure.” It’s also why we at Tuckpoint believe the most resilient, high-performing companies organize around a Product Operating Model: A structure that puts outcomes over outputs and drives cross-functional accountability from strategy to execution.
If you don’t think through the full lifecycle of the experience—internal and external—you’re just moving the debt downstream.
Eventually, someone pays for it.
How It Happens: Transformation Theater
Operating Model Debt doesn’t appear all at once. It builds slowly. In the shadows of "success."
In both cases, the organizations had the talent. They had the tools. What they lacked was a modern, connected way of working. Because when your product is “data,” and your delivery system is manual, misaligned, and inconsistent, you don’t have a tech problem. You have an operating model problem.
Here’s what that looks like in practice:
You launch the customer feature but don’t fix the internal workflow
You form Agile teams in tech but leave the business on 12-month funding cycles
You do a strategy offsite, but no one changes how work actually gets done
This is what we call Transformation Theater: creating the illusion of progress while maintaining the legacy structures that are behind the stall.
It’s Whack-A-Mole, not operating model reform. Band-aids and tiger teams. Sprinkling Agile pixie dust on waterfall teams. Innovation labs disconnected from core product delivery. Customer “insights” that never reach engineering.
And while it might feel good to launch a dashboard or re-org a team, if you haven’t changed the system underneath it, you're just racking up debt in a different department.
Some folks think, "It’s internal. No customer sees this. It’s fine." But our real-world examples prove this isn’t the case.
What’s internal today becomes external tomorrow:
The blanket report delays decisions, which delays action, which impacts customers.
The overwhelmed call center agent frustrates a patient who just wants their benefits explained.
The inconsistent backlog prioritization leads to delayed delivery dates.
When your operating model is broken, everyone feels it.
Landing here isn’t intentional. It’s simply the result of well-meaning shifts that only address the surface level rather than the structures and foundations that support it.
Organizations get stuck in the "Transformation Theater loop" thanks to inertia. Teams double down on the mentality that "the only way out is through,” or wrongly assume that everyone is tired from change and pin that as the culprit when really it’s the loop itself.
And this loop is a vicious cycle that becomes a centrifuge without the proper tools to halt the momentum.
What’s the Fix? Choose Clarity.
The fix isn’t another off-the-shelf tool. It isn’t another Agile rollout.
It’s Operating Model Clarity: A deliberate, capability-aligned, customer-connected way of working designed to deliver outcomes for your ideal customers.
It’s a redesign in how your organization is led, how decisions get made, and how outcomes are delivered to customers.
That means:
Defining how decisions are made, how priorities are set, and how teams work together.
Naming and aligning around an Op Model (at Tuckpoint, we believe in the Product Operating model because a project hands you a thing, but a product keeps solving a problem).
Committing at the leadership level to design and steward how work gets done.
It doesn’t happen overnight. But neither does Operating Model Debt.
Next Steps: Where to Start
The world your organization was built for no longer exists. Customer expectations are evolving faster than your legacy operating model can handle. The old model of project-centric delivery, siloed departments, handoffs without accountability, and long build cycles disconnected from customer feedback is failing. New technologies promise speed. But they often just accelerate inefficiency when dropped into this old model.
Want to start digging out? Begin by asking:
Where are our teams working around the system, not through it?
Where do we keep throwing Agile at problems without fixing the structure?
Where does our Operating Model need clarity, not just speed?
To avoid Transformation Theater and free your organization from Operating Model Debt, you need a deliberate, capability-aligned, customer-connected way of working designed to deliver outcomes for your ideal customers.
Operating Model Clarity is your first step toward unlocking faster growth, attracting better talent, and outpacing competitors.