Organizational Charts -- A Key to Successful Growth

Organizational Charts -- A Key to Successful Growth

All businesses have an organizational structure in place. Unfortunately, many of them are informal and not in writing. It has been our experience that having a formal organizational chart in place will have a positive impact on your business. It needs to be in writing, and it needs to be distributed throughout the company.

The thought of planning for the future can strike terror in the heart of a closely held business owner. However, it pays to sit down and think about the business and what you would like for it to become. Organizational charts can play a major role in the development of people and the successful growth of the business.

Rea shareholder and business development specialist Mike Taylor has long encouraged business owners to spend the time necessary to formalize the organization’s structure.

“It’s never too early, or too late, in the life of a business to develop an organizational chart. In most cases, the sooner the better,” Taylor said. “If done properly, it can serve as a road map for hiring and developing key personnel.”

Initially, the organizational chart may have multiple positions filled by the same people. As the business grows and the finances are available, you can begin to fill the positions that are critical for the growth and continued success of your business. If done properly, the time spent planning and visualizing the future organizational structure will pay huge dividends.

That’s what Paul Weaver, CEO of Weaver Leather Goods Inc., experienced as his company grew from a staff of three to a business with more than 200 employees and $36 million in sales. When Weaver Leather began to grow, Rea worked closely with Weaver on the development of an organizational chart. That chart became the blueprint for the development of a management team that guides this number one company in the equine industry today. Over the years, the organizational chart has changed and expanded, but the key positions that were identified years ago still remain in place, and Weaver believes it provided a framework and guide that was instrumental in building the current management team.

“When you are a small company, it’s important to hire people that can wear multiple hats to help grow the business,” Weaver said. “As you expand, it’s critical to identify people to lead specific areas that can take the company to the next level.”

The development of an organizational chart forces the business owner to look objectively at the needs of the company. Not only does it allow you to focus on looking for people with skills that will take the business to the next level, but it also allows you to prioritize the needs of the business from a people perspective.

Next Stop: Leadership

If you as the owner are truly devoted to filling positions in the organizational chart, then you also must be willing to let go and begin developing leaders.

“The lack of leadership is the result of a lack of leadership,” Weaver said.

However, for most business owners, handing responsibilities over to employees is easier said than done. Noted business author John C. Maxwell says in his book, The 21 Irrefutable Laws of Leadership, “The people’s capacity to achieve is determined by their leader’s ability to empower.” It is not enough to just fill the positions outlined on the chart; you must empower them to lead, to grow and to develop.

“Many entrepreneurs have grown their company by doing most of the important management tasks themselves, Taylor said. “It is very difficult for them to let go of the reins. By learning to delegate key responsibilities, owners are able to spend more time thinking creatively and strategically about the business.”

Theodore Roosevelt once said “The best executive is the one who has sense enough to pick good men to do what he wants done, and self-restraint enough to keep from meddling with them while they do it.” As a business grows and the positions identified on the organizational chart are filled, this becomes a critical issue. The role of the owner and the top management team is fluid rather than static. The right people in the right positions will pay tremendous benefits.

If you don’t have an organizational chart, you should meet with your Rea consultant to begin the process. If you have one, we would like the opportunity to review it with you. Businesses provide unique, exciting and challenging opportunities. We encourage you to have fun and enjoy the journey.