Adding Structure to Strategy

Many young companies are leery of imposing traditional business structures on their organizations. They believe a more "fluid" environment fosters camaraderie and a shared vision, where the entire team is invested in company success and feels comfortable expressing ideas and concerns. Many of these business owners are reluctant to adopt formal job titles and establish hierarchies, fearing that employees will feel more like cogs than team members, and even acquire a "not my job" mentality if responsibilities are formally defined.

The reality is that "big picture" strategy must be translated into structured daily tasks that need to be properly delegated. This requires well-defined responsibilities and roles, as well as carefully tuned processes. The best place to begin this definition is the org chart. Think of it as the blueprint upon which working relationships are built. It's the first step in translating executive vision into the "who, what and why" of operations.

To develop a meaningful organizational structure, thorough evaluations of current personnel capacity and decisions about growth are required.  What are the organization's priorities and how many individuals-with which skills-are needed to get the job done?  The relative importance of various responsibilities will determine who works directly for the CEO and which departments are nested within others, as well as areas where the organization is understaffed. This forms the tiers of the management hierarchy.

Creating tiers rather than maintaining a flat organization, reduces the number of direct reports an executive manages, saving valuable hours that can be focused on company growth.  Structured tiers will provide eager and passionate team members with clear growth paths within the organization. They will also provide potential new hires with a better understanding of the organization and the responsibilities expected of them, improving recruitment efforts.

The org chart identifies up/down/lateral "collaboration paths" within the hierarchy so that employees better understand whom to reach out to for specific types of support. These improved collaboration paths will provide the framework for developing any missing workflows and reveal where processes should be developed for better clarity and efficiency.

This isn't to suggest that an org chart completely defines the work environment.  The bonds developed through day-to-day problem solving and teamwork determine the character and culture of an organization.  The org chart is simply a reference point and framework upon which relationships and alliances are forged.

Case Study

At one entrepreneurial organization, the environment was highly fluid and flooded with energy, however, the lack of structure in the area of formal roles and responsibilities led to many accountability challenges. Since folks wore multiple hats, there was a lack of clarity regarding who was responsible for specific deliverables. This frequently resulted in missed deadlines and frustrated employees. As a result, the president spent most of his time fighting fires and quelling client concerns. Organizational progress, the very thing they needed to break this cycle, became a backburner issue.

GCF's first goal was to develop a reporting structure and org chart with well-defined roles and dependencies. The structure quickly brought to light areas where the business was understaffed, resulting in a clear next goal -- hiring new talent to fill the gaps. To support the new structure, we also identified several areas where processes were needed to increase the efficiency of key, ongoing tasks.

By removing some areas of uncertainty-clarifying what individuals were accountable for and where they could turn for assistance-we created an environment where employees felt comfortable assuming greater ownership and collaboration improved. Employees did not develop a "not my job" attitude. Instead, the opposite occurred. There was an increased sense of ownership and accountability, fewer details were overlooked and missed deadlines became a rarity. As a result, senior management has fewer emergencies to address and spends more time focused on increasing company sales and profitability.

In the end, we built an organizational structure that ensured that the right people were performing the right tasks, supported by processes that saved time and improved consistency.

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