Why you should bin your organisation chart

How many of us have ever had the feeling that we have bitten off more than we can chew? This case study I read recently in the E-Myth newsletter shows why sometimes when you are overwhelmed you need to stop and look at your business in a completely different light.

Background
This particular business had grown from a one-person stall selling organic, gluten-free biscuits and cakes into a retail store-front and wholesale provider. The business owner was concerned because production was down, deliveries were late, quality was dropping, and he was tired of yelling at his manager. He felt he always had to be looking over everyone’s shoulders.

A Naturally Dysfunctional Progression
It’s a familiar progression common with many small businesses. You start out doing something well and business increases until you can no longer fulfill all of the demands. One person can’t do it all anymore.

So, you wisely see that more people are needed to cover all the bases and decide where another person would have the greatest impact.

You hire somebody with a certain skill set or previous experience. Maybe you start with a bookkeeper who relieves you of a task that you’re happy to pass on.

Things are all right for a while. The bookkeeper has established a routine for managing the weekly accounts and suggests that she could take on some additional work. So it’s decided that she will also answer the phones, giving you more time to make sales calls, handle deliveries, manage stock, develop new recipes, and think about promotional campaigns.

Months pass by, and the bookkeeper/receptionist/customer support person suggests that, as she’s now familiar with the accounts, it might make sense for her to take over the stock ordering. Then, perhaps it’s time to hire someone to take orders and manage the production scheduling.

Just as you’re beginning to feel some increased freedom, having offloaded some of the tasks that were the most time-consuming and least interesting to you, things start to get missed.

The problem is that people are no longer clear about what’s expected of them. They’re juggling too many disconnected positions. They have risen to every opportunity to contribute to the business but they have no clear picture of the end result.

Tear up your organisation chart
This is the point at which you need to tear up the current organisation chart (if there is one), in which the bookkeeper is the office manager is the purchaser etc.

It represents an organisation that is based entirely on the particular combination of qualities and duties that people have evolved into over time. It doesn’t show you the positions that need to exist in your company in order to support your vision. It doesn’t reveal who is responsible for what and how they’re held accountable. It’s not serving you – and only you can change it.

Five steps to a functional organisation chart
1.  Start by listing all the functions that are required in your business. Forget for the moment the people you have doing them now. Think in terms of functions – not people – and state the unique and particular result that each of those functions produces.

2.  Arrange those results in order and observe the relationships and interdependence between them. It should start to resemble a workflow chart with several branches.

3.  Identify where similar and complementary results can be grouped together into naturally-occurring ‘work stations’ that require similar levels of skill, capability or expertise. It is at this point that you can start giving them generic labels or actual position titles: Baking,  Bookkeeping, Debtors, Delivery, Counter Sales, etc.

4.  Write in the names of your current staff next to the functions they’re doing. Step back and consider how many actual ‘positions’ each of them holds and how many of them have stretched their responsibilites thinly across different branches of the organisation.

5.  Consider new strategies for those responsibilities and examine where work can be consolidated, where existing people most naturally fit in, and where they should be repositioned so that they can each achieve more satisfying results with increased clarity and better accountability.

Your people can hold several roles as long as the roles are clearly defined and make sense within the bigger picture. As your company grows, your organisation chart will show how you need to plan for and fill specific needs in your business.

How clear is your organisation chart? I’d be interested to know.