Getting Your Organisational Structure Right
Have you ever heard the saying, ‘Get the right people on the bus”? This also implies getting the wrong people off the bus, and the right people in the right seats!
Unfortunately ‘The Bus’ itself is rarely discussed. So what if your business isn’t a bus? Maybe it‘s a jet boat with two seats or may it is more like a train with multiple carriages, a great driver and a conductor connecting all passengers.
Getting the right structure for your business will allow your revenue to increase without creating bottlenecks, overloading team members or causing errors or mistakes. Bottom line returns should increase at a rate greater than the revenue increase as the business becomes more efficient and achieves economies of scale.
Your organisational structure shows the departments in your business, who is responsible for what (whether they’re employees or external contractors) and how the hierarchy works. We call this the ‘10 Hats Organisational Structure’.
When you implement a ’10 Hats Organisational Structure’, the departments you will have identified will include:
- Product / Service Development.
- Admin / IT.
There should be only one leader of the business, and one leader for each of the 10 departments. One person can certainly wear multiple hats, and generally do in our small New Zealand businesses!
But there can’t be more than one leader for each department. For example, the leader of the Admin/IT department may also be the leader of the Finance department.
Each role should have a clear job description with no more than 10 key responsibilities. Each key responsibility should have clear tasks and KPIs flowing from it.
Remember that nobody can manage more than five people effectively, so create teams within each department (each with a team leader). And make sure that there are ‘team members-in-training’ to start wearing some of the hats that the business owner is currently wearing.
Review your structure regularly and update the key responsibilities if they change. In other words, keep your structure as a living and breathing document that your team understands.
It is important to check in with your team regularly to ensure that what they’re doing aligns with your structure. Ask whether there have been any changes in the team member’s role at each performance review. Then make sure they are the right person to be doing those new tasks or re-assign them to the correct person.
Valuing the opinions and contributions of your entire team is hugely important. However, having a clear hierarchy is the key to avoiding bottle necks, making smart and consistent decisions, and managing risk as your business grows.
It also provides clarity for the team and an opportunity for advancement.
To get help with creating and establishing your ’10 Hats Organisational Structure’ ask us about one-one-coaching session or pre-book with an upcoming half day seminar on this topic by emailing firstname.lastname@example.org