Create your org chart before you hire your sixth team member.

Written by Troy Trewin

Troy has worked intimately with 26 businesses in 20 years. He knows their numbers, understands their growing pains and people issues and has helped with most financial aspects, as well as having coached on leadership and management.

December 4, 2019

As your baby grows up it will need more structure.

Systems, processes, routine and structure will set you free, not confine you. If you are serious about growing your small business the sooner you have these in place and working smoothly, the sooner you can move out from working IN the business, to working ON it. To eventually not being needed at all.

In this post we outline why you need an organisation structure and chart (org chart), why it’s important (even from day one) and give you a suggested hierarchy.

Make sure the org chart you devise is the chart you envisage your business will be when you exit. This is really important. No doubt you’ll change the chart a few times over the years as you get to understand your business better, or adapt it, but the key is to always think of it as how the structure of your business will look when you hand over the keys (sell).

You may feel too busy to implement an org chart before you put on too many team members but we recommend you do that before you let too many in. You may as well do it now (even if your sixth team member is months away from walking in the door).

By having it in place you start to think and talk in roles. This is an important habit to build because you want it to sound natural when talking with your team:

“OK, that’s a great question Peter. Which role do you think owns that answer/approval? Yep, I agree, I don’t wear that hat so best go see the Marketing Manager.”

As Gerber eloquently illustrates in The E-myth book, having a clearly defined org chart from day one will help you with responsibility and accountability within your business as you grow.

Let’s start with the KRAs or Key Reporting/Responsibility Areas:

  • Strategy
    • Planning
    • Board meetings
    • Product Strategy
    • Strategic Finance
    • Exit
  • Management
    • Manager Development
    • Profitability
    • Recruitment
    • Resourcing
    • Organisational Training
    • Performance & Pay
    • Culture & Communication
  • Marketing
    • Competitors
    • Customer Relations
  • Sales
    • (sales channels)
  • Operations
    • Finance
    • Admin
    • Legal & Compliance
    • Technology & Systems
  • Production
    • Profitability
    • Knowledge & Learning
    • Training
    • Supplier Relations

Here you can see each corner of the business, and which area reports to which roles:

Now all you need to do is put a name in each box to explicitly say who owns that corner:

There are plenty of other ways to structure an org chart so adapt this one to how you think it best fits your business.

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