Organizational Chart

July 26, 2017

 

Q. I own and run a business with about 20 employees. My people are after me to draw an organization chart. I think that would be a waste of effort and would probably only serve to make some of my employees mad when I show them reporting to someone they consider to be a peer. I’m against org charts. What do you think?

 

A. Thank you for the question. We’re sorry to disappoint you, but we side with your employees on this one. However, this is one of those situations where the reason we think as we do is much more important than what we think.

 

We don’t care about boxes and lines on a chart. It’s obvious you don’t either. What we care about is that small businesses operate as successfully as possible. Your business will be more successful as it grows, if you communicate to your employees exactly who is responsible for what with crystal clarity. Anything less than this leaves room for problems. The purpose of an org chart is to help you communicate this.

 

You say you have about 20 employees. Assuming there is no reporting structure, they all, in effect, report to you. If your business continues to grow, you will soon reach the point where you become overwhelmed. In fact, that may have already occurred. It would certainly explain why your employees are clamoring for structure. When your personal capacity is exhausted, you’ll face two choices. 

 

If you continue to operate as you are, your company’s growth will grind to a halt. Even though you are working very long hours, because you won’t have sufficient capacity, things will start to fall off of your plate. Eventually your customers will begin to leave because they are fed up with the things that aren’t getting done. You’ll have arrived at the unhappy equilibriumthe point where for every new customer you acquire, you lose one that is unhappy. Growth will stop.

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