Org chartHow do you design your org chart?

In a small business, it’s common for roles and departments to grow organically, addressing the issues and pain points which have cropped up over the years.  Need to focus deeply on sales this year? Create a sales department and put someone in charge.

At some point, this system breaks down. You end up with duplications, overlaps, and other inefficiencies.

To get to the next stage, you can investigate an approach called “Process Based Design.” This is a method of looking systematically at the needs of the organization, then creating roles which optimize the most critical needs.

Don’t worry – this isn’t about describing every process in your business. That level of detail is rarely worth the investment.

Let’s talk about the six principles of Process Based Design:

1. Top priorities first

There are always a few key processes which are the most critical for your business. Customer acquisition (sales and marketing) is often near the top. If you have a steady flow of goods through your business, then inventory management might be essential. If you deliver large projects for a few customers, that will point to project management.

There are a zillion other processes in your company, but as we go down the list, they become less and less critical to overall success. So optimize around the ones which entail the most cost, highest risk, and represent the greatest value to your customers.

2. Simplicity

As Albert Einstein is attributed to have said, “Everything should be made as simple as possible, but not simpler.” You’ll get great value when you can simplify processes to their essential core.  But then don’t eliminate further, because you’re cutting out something crucial.

Designing for simplicity will help you identify which people and roles are also most essential – perhaps suggesting that you need to have better backup for critical jobs.

3. Clear ownership

Many problems arise when it’s not clear who needs to do what. And it’s complicated, right?  There are lots of tasks to be done, numerous management and technical decisions, even including key partners.

As you clean up a process, don’t try to micro-manage every detail. But do make it clear who’s responsible for making progress and adding value at every step.

4. Compelling accountability

We’ve had a bad tendency to beat people over the head with the “accountability stick.” We worry about and try to avoid blame.

When done well, accountability can be a powerful motivator. If I’m accountable for failure, then I should also be able to celebrate success. I should be motivated by the fact that I’m empowered to make decisions which make a difference.

Give your people accountability which matches their responsibility and empowerment. You may just find that people blossom when they feel valued, useful, and when their work makes a true difference.

5. Skill match

Each employee has different attitudes, motivations, and skills. When you can take advantage of that uniqueness, your people will tend to feel more valued as individuals. Focus and productivity can skyrocket.

I’m sure you recognize the tradeoffs involved, though. You’re at risk if you have no backup for important tasks or if people change their interests.  This is always a dynamic dance.

6. Sustainable

Your focus will be on balancing the short term with the long term, ensuring that your business will continue to deliver compelling value for many years to come. As a result, processes need to adapt to the changing world. They need to continue to function efficiently.

And they need to continue to work well despite turnover and reorganization.

Applying these principles

Part of process design is to create the structures, practices, and tools which will deliver the best value for your business.

Here I’m focusing on the “people side” of the equation. Ideally, after you identify the most critical processes and thoughtfully design them, it will be much easier to create the organization which best supports them.

That includes the org chart, of course, and individual and group roles. Don’t stop there.  Continue your work on motivation, culture, and the tension of conflicting demands. When it works well, you’ll see your amazing results on the bottom line.


This article was first published in InnovatioNews.

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