As a small business, our organizational structure is often designed by default based on the individuals we have in the company. Our first set of hires picks up the pieces for all the roles that should be filled in the company, but do not fit in the budget. As we grow, we may have great people but it’s hard to figure out who has responsibility for key parts of the business. That is why organizational structure and design is key to planning the future of your company.
Organizational structure and design is the process of stepping back to determine what roles are necessary to successfully support the organization for today’s needs and the needs of the future. It is asking the question, “If I didn’t have any people on my team, how would I ideally structure these roles to maximize results?”
Disadvantages of Customizing Positions to Individuals
For most businesses, our current organizational structure would look very different if we weren’t customizing positions to suit the strengths of each individual team member. There is nothing wrong with that approach in a smaller organization. However, as you grow, this approach to organizational structure can create a few problems including:
- Lack of clarity in roles and responsibilities
- Misalignment of talent or motivation with the needs of the business
- Gaps in skillsets for key roles or strategic initiatives
- Inability for the Owner to let go of day to day responsibilities
- Challenges in finding talent for ‘unicorn’ roles
Best Practices in Organizational Structure
Focus on the role, not the names.
- What is the work that needs to be done?
- If you could organize the work in the most logical way, what would it look like?
Write great job descriptions.
- This isn’t just a list of all the tasks, break it down into the top 5 categories that identify the priorities of the role.
- Add in the estimated percentage of time the role should spend on each priority.
Ensure the competencies needed for success of the role align with one another.
- A role that requires someone to be amazing at everything will be difficult to fill and does not set an employee up for success.
- Example: A great accountant that also has a strong competency for sales will be far more difficult to find.
Think beyond today.
- Create structure for two to three times the current revenue of the business.
- It is just fine for one person to wear multiple hats in the short-term, but understanding when they are working in each of the various roles sets you up for success in the long run!
Interested in learning more about the best practices for creating an organizational structure that reduces employee frustrations, helps the business grow and improves your ability to attract the right talent? Email us at hr@peoplesolutionscenter.com for our full webinar, 'Why Structure Matters and How to Fix It!'