What an Org Chart Can Do for Your Small Business

12/06/2023 | Roger and Susie Engelau

As your business grows, people come, people go, roles change, and complexity increases. So it’s imperative that you know you’ve got the right roles, the right people, and that people are doing things right. The org chart ensures that.

You probably don’t think your small or mid-size business needs a formal tool like an org chart. Surely it’s an academic exercise, a fancy and formal tool used in large corporations to keep track of their dozens of departments and thousands of employees.

We get it. We first thought of an org chart as a time-consuming and unnecessary tool for small business but, as it turns out, the org chart is one those corporate tools that actually does help us smaller guys.

 Org charts expose gaps and overlaps and clarify roles. Your name’s likely to be in more than one box… no wonder you’re overwhelmed! But once you know exactly which boxes your name is in, you can begin to shift work, align tasks, and plan how to get your name in the boxes you want it in.

When we started Inspire Results, there was just Roger and Susie. We created an org chart that showed all the roles necessary to run the business, then put our names in the boxes corresponding to the work we were each doing.

After the org chart was on paper, we could see the source of role James Cash Penney quoteconfusions. Roger thought Susie was handling monthly financial reconciliations and Susie thought Roger was. Worse, a year went by with no reconciliations. Without realizing it, we’d split the financial tasks between the two of us. We decided Susie would head Finance. It didn’t mean Roger wouldn’t perform some of the duties, only that Susie would be the one responsible for seeing that they all got done. The org chart showed us what roles we needed to hire next once the company could afford it.

Org charts help diagnose operational problems. They reveal where a process is getting bogged down and where it bottlenecks. Another benefit of having a documented org chart is that it tells potential lenders that you’ve thought deeply about the best possible structure to accomplish your organization’s goals.

Over the years, our Inspire Results business coaches have created hundreds of first-time org charts and we’ve seen them turn light bulbs on for the owners as it did for us. Org charts increase efficiency by exposing gaps and overlaps, clarifying roles, and helping you prioritize your next hire. They also help you identify what functions you want to have on your payroll and what functions you want to outsource.

Org charts add tremendous value for your employees

 Org charts aren’t just for management; they’re for everyone in the company. An org chart gives you and every employee a great visual picture of your company. While it might not seem important at first, org charts let everyone in the company see at a glance where they fit in and who they report to and this turns out to benefit individuals in profound ways.

Team Performance ModelEvery person in every team since the dawn of time wants to know how they fit into the team, whether it’s a ball team, a church committee, a military squad, or a business unit. According to the well-researched Drexler-Sibbet Team Performance Model, these questions, while often unspoken, are on the mind of every member of every team:

  1. Why am I here?
  2. Who are you and how do you relate to me?
  3. What are we doing?
  4. How will we do it?
  5. Who does What, When, and Where?

 

The questions dominate a person’s energy and left unresolved, result in uncertainty, caution, mistrust, apathy, skepticism, dependence, and resistance. If, however, the questions are answered, the result is trust, engagement, and high performance. Org charts answer these questions clearly and quickly, freeing your employees to focus their mental energy on being productive.

An org chart gives you and every employee a great visual, letting everyone see at a glance where they fit in and who they report to.

How to create your current organization chart

When we make an org chart for our clients, we often start by drawing it out on paper, a whiteboard, or flipchart paper so that everyone who’s working on it can see the same thing at the same time. Ultimately, we’ll put it into a software program we purchased. There are plenty of ready-to-use templates available either free or paid.  Microsoft’s Word, Excel, and PowerPoint, for example, have SmartArt tools designed to make org charts.

The Functional Top-Down type of chart ensures that you include all the traditional functions that any organization requires —marketing, sales, HR, IT, finance and accounting, operations, service, distribution, and so on.

Start by putting your name and title in the top center box, then your direct reports in the next level down. Capture all the functions your business requires to produce its products and put each function in its own box—marketing, sales, HR, IT, finance, operations, service, distribution, etc. If there’s no one in the role, put your name in the box. If that doesn’t cover everyone in the organization, make a box for each of the remaining people and the function they perform.

Outsourced functions also get a spot on your org chart. If your CPA does your monthly payables and receivables, put their organization name in the finance box.

Your organization’s structure is ever-changing and the best way to manage it is to maintain a current org chart. An org chart is a tool that will pay you and your employees back many times.

If you need help getting started, drop me a line at Susie@InspireResults.com.

Another option is to attend our quarterly Growth Plan Workshop and discover the potential in your business by completing your Quarterly Action & Single Sheet Business Plans. Step out of the day-to-day business for just 1 day, get organized, complete a prescribed planning process, and walk away with an action plan that leads to greater profits and free time back..

We’ll also be discussing millennials in the workforce. Join us to learn more about how to utilize this powerful generation of employees. We will talk about how to: motivate and incentivize, have the difficult conversations, attract, retain, manage, reward, and promote this powerful generation.

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