Every business has 10 departments within their organisational structure, regardless of whether you turnover $100,000 or $10,000,000 or have no employees or 60 employees. You may already have a team in place but do you have clearly defined departments and functions within your organisation and does every employee have clarity about their role and responsibilities?
In order for a business to run effectively and efficiently, there needs to be a clear Organisational Chart which visually defines departments, functions, roles and responsibilities. Not only for the current organisational structure, but also for one that is scalable for future growth and succession.
When I ask the question, “as a business owner do you find you are wearing too many hats?” the answer is invariably “Yes”. Your Organisational Chart (along with strategy, systemisation, and the establishment of best practice) is the solution to gaining more control over the direction of your business.
So where to begin. We first need to get clear on where the problems areas are in the current structure and what needs to be fixed. This starts with the business owner and too many hats they are already wearing. I’m sure you can relate.
So to free yourself you need to understand that as a business owner the most important hat is leadership. To achieve this you may need to free yourself of other hats to lead, so let’s take a look at all those hats.
The organisational chart gives structure to a business, holds it upright and provides the link between shareholders and business activities.
Before looking at the 10 hats it is important you understand four principals that will massively help you development and modify your chart:
- There can only be one leader – the business has one leader and each department has one leader. One team member may wear two hats, i.e. General Manager and Marketing Manager, but two people cannot hold a leaders role i.e. there cannot be two Marketing Managers.
- Responsibility and doing are not the same – there is a big difference between doing something and being responsible for it. Bottlenecks occur when someone has responsibility for something and believe they also need to do it all. They are often leaders who don’t know how to delegate effectively. If you delegate a task, you are still responsible for it, you are just no longer the one doing it.
- Roles before people – Determine the tasks and responsibilities before thinking about the individuals you have on your team. E.g. if you think about a team member you’ll define the position around their skills which may cover multiple departments. If you think about the department then the functions within, you can shift some tasks from the team member to better align with the structure.
- Function determines responsibility – It is important to look at the function of each department first. E.g. you might have delivery people chasing up slow paying debtors. The functions of delivery/operations is to do the doing and generate cash, chasing debtors is a function of the Finance team. Another common example is operations team members doing too much administration, this is obviously a function that should be performed by your administration team members.
With these guiding principals you can then start to build out your chart with the 10 departments.
Note: I’ve also included each departments function to help you understand what each department ‘does’:
- Shareholder – funds and owns the business
- Director – sets the direction
- Leadership – implements the plans / maximises business efficiency
- Marketing – attracts leads
- Sales – converts leads to paying customers/clients
- Delivery/Operations – do the doing / generate cash
- Product R&D – develops new products and services
- Finance – manages cash
- HR – employees and manages the team
- Admin/IT – maximises efficiency
From here we will chunk down each department with key responsibilities.
- Map the key responsibilities and tasks to each department – in most cases team members are wearing too many hats. It is helpful to define the roles more clearly and reassign some responsibilities.
- Define 7 – 10 key responsibilities – these should be the key responsibilities, not individual tasks. This should not be exhaustive as the granular details can go into the job descriptions for each role.
- Compare key responsibilities to current job descriptions – this will help you capture the most important responsibilities and identify those that may belong in a different department. Always refer back to the department’s function. The person responsible for finalising each department’s key responsibility should reality check they reflect what’s happening in the business by comparing them to the tasks each team member currently performs.
Your structure should be reviewed regularly and updates made to the key responsibilities if they change. Keep your organisational structure as a living and breathing document that your team understands that supports your business as it grows.
If no clear job roles and position responsibilities exist within your organisation then we advise that you begin this project as soon as possible. If you are planning for expansion this will help to clarify roles and responsibilities required for a sustainable, scalable, and saleable organisation.
Reach out to me directly if you would like more information on an Organisational Review.