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Why you should tear up your Org Chart

"I feel like I've bitten off more than I can chew, Larry."

My client, Franklin, had grown from a one-person kiosk that featured specialty organic and gluten-free cookies and cakes into to a retail store-front and wholesale provider.  

“Production is down, deliveries are late, quality is dropping, and I’m tired of yelling at my manager.  I feel like I have to be looking over everyone’s shoulders all the time – and I don’t like myself in that position.”  

His voice told me that he had moved well beyond standard growing pains and into a state of overwhelm.

“I don’t like you in that position, either, Franklin,” I said.  “How do you think it got to this state?”

A naturally dysfunctional progression

It’s a familiar progression common with many small businesses:  You start out doing something well – maybe even the best – and business increases until you can no longer fulfill all of the demands.

It exceeds one person’s capacity to do it all anymore.

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

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

Things hum along for a while. The bookkeeper has established a routine for managing the weekly accounts and suggests that she might be able to take on some additional work.  So it's decided that she will also answer the phones, and, where possible, help the caller or at least take a message to pass on to you.  

Wonderful!  Another distraction minimized.  More time for you to work the counter, make sales calls, handle deliveries, manage inventory, develop new recipes, and maybe begin to think about promotional campaigns.

Months pass with this new rhythm, and the bookkeeper/receptionist/customer support person suggests that, since she’s getting pretty familiar with the accounts, it might make sense for her to take over the inventory ordering. Another burden lifted.    

Then, perhaps it’s time to hire someone to take orders and manage the production scheduling. And since they have prior restaurant experience they can also work the counter! 

And just as you’re beginning to feel some increased freedom, having off-loaded some of the tasks that were the most time-consuming and least interesting to you, things get complicated.

But I’ve hired great people!

“Listen,” Franklin said, “That all makes sense, but I’ve hired great people who know what to do and how to do it.  It’s just that lately things are getting missed.”

“It sounds like you’ve got a situation in which people are no longer clear about what’s expected of them.” I said. “They’re juggling too many disconnecting positions and things are falling through the cracks. They’ve risen to every opportunity to contribute to the business but they have no clear picture of the end result.”

I suggested to Franklin that he create an Organizational Chart.  

“We have one already.” He said.

“What does it look like?” I asked.

“Well, Marsha, my bookkeeper, is the General Manager-slash-Office Manager-slash-Production Manager, and everybody reports to her.”

“And then,” I prompted, “she reports to you?”

“Well, yeah.  And so does everyone else, actually.  She can’t be in four places at once, so when she’s not available people come to me.  So, I’m the General Manager, too.”    

“OK,” I said.  “I think we’ve found a place to start.”

Tear up your organizational chart

“I want you to tear up your organizational chart, Franklin.” I said.

“Really?” he asked.

“Really! It represents an organization that is entirely based on the particular, unique 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 isn’t revealing who really is responsible for what and how they’re held accountable. It’s not serving you – and only you can change it.”

5 steps to a functional Org Chart

I asked Franklin to design a new Organizational Chart from a Functional point of view. I had him approach it in five stages. You can follow these steps to develop a functional org chart of your own:

  1. Start by simply listing all of the tactical 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 their natural linear order and observe the relationships and interdependence that exists between them.  It should start to resemble a work-flow 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,” “Receivables,” “Delivery,” “Counter Sales,” and so on.
  4. Write in the names of your current staff next to any and all of the functions they’re currently assuming.  Step back and consider how many actual “positions” each of them holds and how many of them have stretched their accountabilities thinly across different branches of the organization!
  5. Consider new strategies for those accountabilities and examine where work can be consolidated, where existing people most naturally fit in the schematic, and, in some cases, should be repositioned so that they can each achieve more satisfying results with increased clarity and better accountability.

Once Franklin finished his new org chart by following these guidelines, he had created a picture of what was supposed to be happening consistently every day in his business to assure consistency and growth.

Seeing all of these functions in this schematic format helped him see where accountabilities were in fact being missed! At first he was scared of all of the “new positions” he had created, but I assured him that each function wasn’t representative of a new employee.

Your people can hold multiple roles as long as those roles are clearly defined and make sense within the bigger picture.

Your organizational chart is a schematic of the true work in your business – not only as it exists now, but as it scales out to meet your Strategic Objective. And as your company grows, your org chart will be a roadmap for how you need to plan for and fill specific needs in your business.

EMyth Team

Written by EMyth Team

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