Organisational structure is not top of mind for most business owners. Small businesses do well with flat structures. The team deals directly with the owner. There’s a friendly, informal, ‘just get on with it’ feel. With growth, change may be needed.
Do I really need to do anything? Think of an Organisation Structure/Chart as the “spine” of your business; it holds the business upright and provides the link between the shareholders and business activities.
What is the purpose of an Organisation Chart?
An Organisation Chart should:
- Show how the business works to serve the needs of its shareholders.
- Ensure the business is adequately resourced by people.
- Provide clear accountability - who is responsible for what?
- Show how the departments and positions interact.
- Ensure the business can deliver on its Strategic Plan.
A clear Organisation Chart identifies the 10 departments in your business and their functions, as well as the key responsibilities and who is responsible for them.
Note: It doesn’t have to resemble a traditional hierarchy. Hierarchical structures can have negative connotations, suggesting unnecessary bureaucracy, oppressive to people who work in them, and frustrating to customers. However, the right structure can enhance morale, productivity, and overall business success. It can be a pragmatic solution when a business is growing and the team (and you) can no longer keep everything in their heads. It’s possible to create a structure with individual roles and responsibilities while still encouraging employees to express their ideas freely.
Do's and Don'ts:
What should you do?
- Involve your team.
- Let them know why you want to change the current structure.
- Seek their views. What works? What doesn’t?
- Whiteboard the major processes to identify bottlenecks and where the business would benefit from better systems e.g. a ticketing system for repairs and complaints.
- Talk through options. - Hold regular meetings to support innovation and strengthen the company culture.
Aim for:
- A guideline for employees to understand where they fit and what needs to be achieved.
- Good communication flow; knowing the right person in each section to connect with to solve problems.
Avoid
- Environments where employees feel a lack of power or are devalued.
- Stifled creativity when those at the bottom of the pecking order lack the confidence to come forward with new ideas and approaches.
Five ways to get the most out of your Organisation Chart:
- Keep it visual. Your Organisation Chart should be a clear, visual structure that shows how your team works together. Share it with your team and keep it visible.
- Know your departments. It’s essential that you understand the 10 departments, their functions, and the responsibilities of each.
- Know the roles. Define every role in your business. Determine the tasks and responsibilities for each role before considering the individuals on your team. Each department should have only one leader to ensure the team knows who they report to and where accountability lies.
- Respect the hierarchy. Determine the hierarchy and how the roles and departments interact. Respecting the hierarchy means that a leader doesn’t bypass managers to give instructions to team members and that team members report to their immediate superior.
- Train the team. Ensure your team understands your Organisation Chart and the protocols around it so they respect it. This training is just as important for the leaders as it is for the team members. Understanding these fundamentals allows you to create an organisation structure that enables effective delegation to free up your time, identifies gaps in your resourcing, and improves your business culture.
“Let systems run the business and people run the systems. People come and go but the systems remain constant.” - Michael Gerber (The E-Myth)
Contact us if you'd like help building a functional organisation chart and defining clear roles and responsibilities.
