An organizational chart structures a business so it operates with maximum efficiency and productivity. In a rapidly changing business environment that rewards those who can adapt and produce, an Org Chart, when done right, enables a company to be flexible and nimble.
However, there are common misconceptions involving Org Charts:
Misconception 1: Org Charts are for large companies — In construction, a foundation is an interface between a building and the supporting soils used to transfer its weight to the ground. And so is an Org Chart. It is the interface between your company and the business environment.
While large companies do rely on an Org Chart to sustain their growth, small companies need an Org Chart if they are to grow their business organically and systematically. Small companies whose business expands too quickly due to initial success always shrink back to the size of its organizational structure.
Misconception 2: There is only one type of Org Chart — Most people are familiar with the “hierarchy” Org Chart where the elite C-level people are at the top, the ultimate decision makers, followed by the senior executives. A layer of middle management is added with lines connecting them to their seniors. Then all remaining employees are listed below each manager.
While many companies have this type of Org Chart in place, there are a few other alternatives. The “flat” or horizontal Org Chart is perfect for start-ups to small organizations where decision making is shared among a group of people heading up departments or profit centers.
Then there is the “matrix” Org Chart for a more complex organization. Individuals are grouped by skills and departments. They may have more than one manager, such as a designer working on two projects simultaneously. Vertical lines are used to connect the individual to the two managers.
Misconception 3: Org Charts should reflect your current structure — While true that Org Charts visually conveys a company’s organizational hierarchy, it shouldn’t just capture how you operate today. This is especially true for small companies where a senior manager performs multiple functions.
For example, a technology manager in a start-up business has developers reporting directly to them. But they may also be responsible for running the Help Desk and managing the Marketing Group. Rather than inserting a single box in the Org Chart for this manager (the current structure), add threes boxes and job titles for each role (the future expansion). Enter that employee’s name into all three boxes, for now.
Misconception 4: Companies can operate without an Org Chart – There is an unwritten law in business that an organization, like water, always seeks level ground. It always finds a way to go from Point A to Point B. But like a meandering river, the path between those two points may not be efficient or productive if a proper Org Chart is NOT in place.
Companies that boast they don’t have an Org Chart, operate as if they have one, even if it’s not written down. Such companies rely on dominant personalities to shape their business process. But what happens when one of these individuals leaves the company?
Organizations like this fear creating an Org Chart may cause them to lose their flexibility or nimbleness. What they don’t see is how the company fails to operate efficiently when top decision-makers are not available. And like the John Mayer song, your team keeps “waiting for the world to change.“
Review Your Organization
Org Charts reflect the current and future structure of the organization. It captures where and how a “particle,” such as a demo request, purchase or product return, enters and flows through the organization. Companies that make particles flow in and out quickly are more productive and profitable.
So, it’s important to review your organizational structure. Determine what “particles” come into your company and align the structure so it flows through the organization with minimal effort.
Gill Corkindale, a successful executive coach, in an article entitled “The Importance of Organizational Design and Structure,” stated that “structure [in an Org Chart] dictates the relationship of roles in an organization, and therefore, how people function. An outdated structure can result in unnecessary ambiguity and confusion and often a lack of accountability.”
Inspire Top Performers
How can an Org Chart be used to inspire top performers? Consider the following:
- Use Org Charts to define Reporting Structure — Performers don’t operate well in a vacuum or with ambiguity. Review your Org Chart to determine if there are clear reporting lines between employees and their manager. Ensure that every role in the organization is placed inside the proper group or department.
- Use Org Charts to Promote — When looking to add staff to the company, start by filling posts at the top and work down the organization. Target managers that are holding multiple posts, a practice that should be relieved whenever possible. Companies that promote from within generate energy and excitement.
- Use Org Charts to Create Healthy Environments — There is a healthy balance between work levels and loads that need to be maintained. There are occasions when a department or group must work longer hours to complete a task, such as delivering a project on time. But heavy workloads and long hours are not sustainable. Identify areas in the company that have greater demand for people and resources. Then realign the organization so heavy workloads are managable. Always promote a healthy work environment.
- Use Org Charts to Invest in People — Every department or group has an exemplary employee who focuses on delivering their best each day. Executives should identify these employees and invest in them. Send them to extra training, trade shows, or reward them for their work ethic. This will inspire their respective team member to achieve more, as well.
Call to Action — Feed Your Organization
A well-defined Org Chart provides clarity for everyone, internal and external to the company. It reveals the structure, defines the flow, and identifies the available talent. It helps determine who to invest in, and what posts to fill. It provides the foundation for every growing organization to build upon.
But organizations need to feed. Never forget that your company is more than boxes and titles on a chart. Each box in an Org Chart represents a person. And that person needs nurturing if they are to become top performers.
Training must become a vital part of your organization’s strategy. The ROI for money spent on your greatest assets is unrefutable. This type of investment shows up in various ways:
- It improves job performance — Employees are more confident when they understand their role and responsibility. When workers are able to deliver better performance consistently, the company can hold on to their position as leaders in their industry.
- It establishes a Learning Culture — People want to know they are valued by their organization. Companies investing in training send signals to employees that they want them to succeed. Over time, learning becomes a habit, just like sipping that first-morning cup of coffee.
- It offers alternative methods to resolve weaknesses — Every employee has areas they can improve. Proper training strengthens these weak areas so people perform at higher levels. They also learn how their role impacts the rest of the organization, fostering teamwork.
- It promotes consistency through the organization — When training is required by everyone in the organization (no exceptions), then expectations and guidelines are established. Mission and vision statements are embraced. It emphasizes quality and adherence to policies. Employees tend to go in the same direction. In this type of environment, top performers are born.
- It promotes new innovations and strategies — Ongoing training produces new skills and encourages creativity. Employees look to improve their performance, thus introducing innovations and strategies to do their job better.
- It reduces employee departures — People who understand their job requirements and perform well, stay with their organization. Happy employees create a healthy workspace. Remember that it costs more to recruit new talent than to train and retain existing employees.
One of the most cost-effective ways to feed your organization is to subscribe to the Ability Platform library. The Leadership learning path, a collection of short, video-based skills or lessons, offer ideas for creating a mission and vision statement, building effective leadership teams, establishing a mentor program, and more.
With 2,500+ video-based lessons, organized into 100+ learning paths (perfect for binge learning), develop 1-2 skills in the average time it takes most people to finish their first cup of coffee; and you’ll love the NetFlix-like user experience.