Sludge: The Hidden Cost in Your Organization

By Kevin Sivic

- 3 minutes read - 510 words

In their book Nudge, Richard Thaler and Cass Sunstein introduced a powerful idea: we can improve outcomes by making the right choice easier to make. A classic example is automatically enrolling new employees in a 401(k) plan, rather than requiring them to opt in. People can still opt out if they want, but the default helps guide them toward a smarter long-term decision.

This approach, called a nudge, is all about removing friction to encourage better behavior.

But what about the opposite?

What happens when a process is so difficult, clunky, or slow that it actively discourages people from taking action?

That’s Sludge, the lesser-known sibling of the Nudge.

Cass Sunstein wrote a follow-up book called Sludge: What Stops Us From Getting Things Done and What to Do About It. In it, he describes the unnecessary friction in systems and processes that makes work harder than it needs to be. And once you know to look for it, you’ll see it everywhere.

A Personal Example: Fax in 2024

Recently, I had to send a document to a government agency in my state. I expected to upload a PDF or maybe email it. Instead, I was told:
“We only accept faxes.”

Fax. In 2024.

After scrambling to find an online fax service, struggling through the setup, and paying to send a single page, I couldn’t help but wonder: How many others gave up at this step?

This is sludge. It’s not malicious, but it is costly.

How Sludge Creeps In

Sludge doesn’t show up all at once. It accumulates:

  • A new approval step added after a mistake.

  • A legacy system never replaced because it’s “still working.”

  • Policies written for edge cases applied universally.

And suddenly:

  • Employees spend hours each week navigating clunky systems.

  • Customers drop off mid-process.

  • Valuable work stalls due to red tape.

At a recent networking event, I asked someone a simple question:
“What bugs you about your job?”

It unlocked a flood of examples, manual data entry, confusing tools, circular approvals. People want to do good work. Sludge gets in the way.

Spotting and Reducing Sludge

The good news? Sludge is fixable, if you know where to look.

Here are a few ways to start:

  1. Ask “What bugs you?”
    Start conversations about friction in daily work. You’ll be surprised what surfaces.

  2. Map your processes.
    Walk through common workflows. Where are the bottlenecks, delays, or confusing steps?

  3. Try it yourself.
    Apply for your own job. Onboard like a new employee. Submit your own expense report. How painful is it?

  4. Identify edge-case-driven policy.
    Are steps in place to prevent rare issues but harming everyday flow?

  5. Create a “sludge budget.”
    Measure time lost to friction, and challenge teams to reduce it.

Final Thought

Just like nudges, removing sludge is leadership work. It’s about creating environments where people can do their best work without unnecessary barriers.

If you’re leading a team or scaling a product, consider asking yourself:
Where’s the sludge? What’s slowing us down, and how can we remove it?

Need help spotting or reducing friction in your org?
Let’s talk.