How Organisation Charts Predict Your Business’ Future
Wouldn’t it be nice to start your business and know exactly where you are going to be in 2, 5, or even 10 years’ time?
Well, obviously if you are starting up a business, you will have read my articles on what you need to look out for – including the need to prepare your business plan, which is a way of mapping out your future. You may even have completed my online training on How To Start Your Business. Your vision-definition especially will be part of the planning process, and it envisions for you what your business should look like if you succeed in following your strategies.
“But”, you say, “Even my vision is what I hope my business would be like, I wish I could see what it will be like.”
Well, full disclosure, I do not have a crystal ball, but I do have a method where you can “see” with some clarity, what your business will look like, and it’s not about envisioning anything, it’s about creating your business structure now, in mind for the future.
An organisation chart can describe quite clearly what your business will look like, and what it will do, so let’s go through how this would work.
Firstly, an organisation chart is a diagram of how the people in your business are organised, and what they do. I’m sure you’ve seen them before. They start at the top with the owner, or Managing Director or CEO – “the boss” in other words.
Then, they cascade down with each box representing an individual who works in the business, best organised so that people working in one department or who fit within a function are grouped together. The departments or functions may be administration, sales and marketing, production teams, and so on. Within each grouping are the individuals that make up that department or function, and the lines up and down show who they report to such as department managers, and who reports to them.
Here is how to draw an organisation chart that will predict your future business.
First, make sure that you do have a clear vision of where you want to be when your business becomes the success you are dreaming of. When you start your business, this is really the first step you need to do. This is not some woo-woo fancy, it is an important goal-setting task. You do not just “think good thoughts” about how successful you will be; indeed, you need to take some serious time to describe the customers you will be serving, what they see in you that makes them come back to buy, how you meet their needs. You will need to describe exactly how your business does it’s work- what are the processes, what it sells and why it succeeds in doing so, what your people are like in terms of their value to the business and what they do.
This clear business vision-definition sets the target for all your planning.
Once you are clear, you can then ask yourself how you should organise your employees of the future to meet customer expectations and do the work envisaged, and grow the business.
When your business has grown, you need some discipline in the way people are responsible for different things.
When you start, it may be flexible about who does what. In fact, it may be good for the business because everyone mucks in – everyone gets involved in sales and satisfies customers; when you are free, you help the team produce the goods, your bookkeeper doesn’t mind helping out at reception or typing out marketing brochures.
However, as you grow, you need to ensure that all the tasks are done on time and that there is no confusion and miscommunication.
What would happen once you had 10 or 20 employees? If everyone talks to customers, maybe some of them are giving outdated information? If everyone helps out producing the goods, perhaps an important phone call was missed? If your bookkeeper helps to type out marketing material, maybe the books are getting behind?
So, with your clearly defined vision in mind, draw up what your organisation chart should look like at that time. Start with deciding what are the functions that need to be fulfilled. Do you need a specific Sales function to follow-up leads and close the deal? Will you need a Marketing function that sets up marketing funnels, events and campaigns? How do you produce your products or services? Are there separate functions in those areas such as Purchasing, Manufacturing, Assembling, Warehousing, Delivery? Should the services you provide be organised into different areas such as service streams (in legal firms, for example, you might have different areas such as Commercial Law, Litigation, Family Law and so on)? Will there be a Corporate Services or Administration function? What sub-functions fit into some of these, for example, under Corporate Services may sit quite distinct areas such as Finance and Accounts, IT Systems Support, and Facilities Management, and so on.
Once you have defined the different areas in your future business that you need to populate, you can work on each of these at a time.
With your vision in mind, consider how many people and what skills you need in each of these areas.
For example, depending on the size of your envisioned market, you may be able to work out that your Sales Team needs to be made up of an experienced Sales Manager and two Salespersons looking after the North and South. They may also need an Administration Assistant to help them schedule and prepare sales agreements. You might then decide that with the size you have in mind, you don’t need a separate Marketing team so you amalgamate the Marketing Assistant with the Sales Team.
Go through each of the functions to work out these details and in doing so, you should also be starting to note the type of skills required by each person and what they will be doing (for example, “The Sales Manager will need to have at least 10 years’ experience in sales leading a small team, as well as experience in running marketing campaigns and he will be responsible for scheduling all marketing campaigns and sales visits”).
When you believe that you have completed your pictorial organisation chart, review it once again with your vision in mind and ask yourself if the performance indicators marked out in the vision can be met by your organisation chart. Will the positions in it, organised the way they are, be able to satisfy your customers in the way envisaged; will it run the systems you identified as critical to attaining your vision in an efficient way?
When you have completed this review, take each position in turn and start to write a detailed description of the position:-
- Who do they report to?
- Who reports to them?
- What are their duties?
- What are their responsibilities within those duties?
- What is the ultimate objective of that position?
Now, notice that up until now, we have not dealt with any individuals.
Quite rightly, you should design your organisation chart without reference to who works with you now. This is so that you design your organisation chart for the future attainment of your vision, not adapt it to fit in the abilities of the people you have working with you now.
However, once you have dispassionately completed your future organisation chart – some of which positions do not yet exist in your business today because you do not yet have a need for them – you can then fill in the names of people who fill existing positions. Some of these positions will have the same name – people may currently be filling a couple of responsibilities each. This is fine. Do not be tempted to “combine” positions. This is why you leave personalities out until you have completed a diagram that is best for the attainment of your vision and for the efficiency of the business. Simply recognise that, at the moment, some people have two jobs or more, but that this will be corrected as you grow and employ more people.
Now, you will have a picture of how your staff should fit into the big picture when you have attained your vision of your dream business, and you will also have a picture of where you stand now.
The next step is to devise strategies on how you populate the final picture. In doing this, you should work along with writing your strategic plan so that you can identify when certain functions and positions start to be added to current positions and functions, thereby working out a timeline for populating the whole organisation chart. Having the “now” and “then” pictures will also allow you to work out who amongst your current employees should receive further training and what responsibilities you would like them to move on to as the business grows. This will also allow you to dispassionately see where the gaps are in skills and experience and what you have to do over time.
As you progress, you should “train” your existing staff in their roles, making sure they are aware of what their position is, what their ultimate objective in that position is, what their duties are and what their responsibilities are within those duties. Importantly, if you feel that they will need to progress to other positions, you need to explain to them what training or resources they will receive in time, and what their progression or promotion pathways are. They can help you try out some of the positions so that when you hire new people, your existing team have already worked in those positions and can brief them about their positions before they move to new positions. In this way, the organisation chart, position descriptions, and the experience of your staff create succession systems when people get promoted or leave.
When I started my Accounting and Consulting Firm with 4 people, I drew up an organisation chart for my “successful” practice catering for 28 people.
With my predicted future business in mind, I grew the firm into a successful three-partner firm turning over mid-seven figures and employing 24 people before I sold and started a smaller boutique consulting company and online business.
So, I have practised what I preach and it does work!
If you want to start creating your future by drawing your organisation chart, I have a free information-pack and worksheets on doing just that and you can download it here.
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