Why Your Business Needs a Clear Organisational Chart

Introduction: Have you ever had to deal with duplicate tasks, unclear responsibilities, or slow decision-making? If so, the cause of that may very well be the absence of a clear organisational plan. Many small and medium-sized business owners work without an organisational structure, which results in confusion, wastefulness, and log jams. Without clearly defined roles, teams cannot work to their full capacity, and growth becomes an issue.

In week six of our systemisation series, we look at the value of an organisational chart and how properly structuring your business can improve productivity and facilitate growth.

Why an Organisational Chart is Important:

  • Reduces Complexity – This ensures that there is no ambiguity on job functions to avoid confusion and task duplication.
  • Enhances Decision Making – A clear chain of command minimises the common problem in decentralised organisations where too many voices slow down decision-making.
  • Increases Accountability – Everybody knows who is responsible for what, which avoids confusion and eliminates the need to follow up on tasks.
  • Enables Growth – A well-organised organisation can grow without necessarily compromising on the current operations.

How to Create a Good Organisational Chart:

  1. Determine Major Functions – List the core areas of your business: sales, marketing, operations, finance, and customer service.
  2. Define Roles and Responsibilities – Every position should have a clear purpose, with detailed duties and expectations.
  3. Establish Clear Reporting Lines – A structured hierarchy is a good way of accounting for people’s work and improving the workflow.
  4. Design for Growth – A structure should be such that it facilitates growth without compromising on the current operations.
  5. Communicate the Chart to Your Team – The chart should be given to the employees, and the manager should explain how each role is important in achieving the company’s goals.

Example of an Organisational Structure for a Small Business:

CEO/Founder → Operations Manager, Sales Director, Marketing Manager, Finance Manager → Team Leads & Employees

A well-organised company is one that is well-directed, has minimal confusion, and ensures that everyone knows what they are expected to do. This is because the common tendency is to have everyone participate in everything, and no one actually owns anything.

Taking Action

 

This week, why not take the time to develop a basic organisational chart for your business? Look for areas where roles may not be well defined or where reorganisation might lead to better efficiency. Defining structure is an important process of business systemisation for the future.

One week from now, we will discuss the significance of positional contracts and how they enhance accountability and performance expectations in your business. Have you ever had problems with organising your business? Let us know in the comments!