Menu

Creating a Successful Organisation Chart For SME (5-100 Employee) Businesses

By Andrew Ardron on Fri 23 July 2010 in Topical

THE NUMBER ONE RULE, THE BIG ONE

The number one rule with organisation charts is make sure you have one before you need one. 

Okay too late – but still, today is better than tomorrow, and this week is a lot better than next year. Why? Well the organisation chart isn’t really about empowering the organisation. What?!? That’s right – it’s about empowering yourself to let go, to delegate, and most importantly to delegate well. Sounds good – or at least it ought to. If you aren’t focused on letting go then ask yourself two serious questions?

1. Why are you running your own business? To make money of course, but surely you want freedom too. Freedom to do what you want to do, when you want to do it. You aren’t building a business for someone else – it is there for you – so let’s make sure we get what we want.

2. How are you going to build this business if everything it does is reliant on you?

SO, LETS GET STARTED

Think big

Building an organisation chart is easier than you think it is. But, don’t waste your time building one for the current organisation, at its current size with its current staff. You need to think forward to the sort of structure and organisation that you will want when the business is two, three, five times bigger. Sure, that means more boxes than people, but that’s what we want.

THE EMPTY BOXES

When you create the organisation chart, create boxes for staff who you don’t have yet. This is the most important bit! You’ll see why shortly, but first an example to make things clear.

AN EXAMPLE USUALLY MAKES THING CLEARER:

For example, let’s say you run the business and have day to day responsibility for managing sales, marketing and finance – you have a few sales staff and a marketing guy but do the invoicing yourself and have to manage all these guys too. You have a partner who makes the “stuff” – she’s in charge of Operations. So, your org chart needs to have you at the top (as Shareholder), then another box immediately below with you again (MD or CEO). So now there are two boxes with the MD (you) reporting to the shareholder(s).

Out to the side of the MD box you need the Sales Director (okay you again!) and the Operations Director (your business partner), plus a box for Finance Director (yes – you again). Then under Sales Director you want the Sales Manager (yes you) and then under this you can start to put your sales team (note – if one of them does maybe some selling and marketing, or is also the product manager say, you should give him/her more than one box too). You repeat this for your Marketing team (under the marketing manager – you again) and the Ops team, finance team etc.

WHY ALL THESE EMPTY BOXES?

Well, look at the chart you have just drawn. Now you know where you are going in BUILDING A BUSINESS and being able to DELEGATE to others. Somehow, in growing the business you need to find a Sales Manager and eventually a Sales Director, etc. Only by filling these positions will you be able to build a successful business that doesn’t entirely revolve around you doing all the work (and hence having no time to build the business – the classic trap!).

ONE FINAL PROBLEM

One problem I see everyone struggle with, is the difference between Managers and Directors. What is the real difference? Do we need both? Well you’ll have to wait for a future article on that one. But I’ve enjoyed writing this one so I hope to get onto that subject before too long. I’ll also be tackling Job descriptions too – a bit of a natural follow-on from this article.