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If you want your business to be organized, start by creating an Organization Chart. The organizational development indicated in this chart can have greater impact on a small company than any other Business Development step.
MOST COMPANIES ORGANIZE around people rather than responsibilities, and this almost always results in chaos. To best illustrate this, let’s take a look at Jack and Murray’s new company called Widget Makers.
When the brothers started the company, they were sure that it would make them rich. As partners, they share the work between them. When Murray’s not attending to the customers, Jack is. When Murray’s not making the widget, Jack is. The business is running smoothly, the shop is perfect, and the customers are satisfied.
The brothers go on that way and the business starts to grow. Eventually, work piles up because it is too much for them to handle. They need help, so they hire their nephew, Jerry. They think that if they have to pay someone, it’s better to keep it in the family.
Now it’s the three of them taking turns. Business continues to grow and they find themselves not able to keep up with the tasks. They eventually hire Herb, Jack and Murray’s cousin. He is hardworking, eager, and willing.
Now it’s the four of them taking turns. Suddenly, problems come up. Widgets are not working. The shop is unkempt and tools keep getting misplaced. Tensions begin to rise. Jack wants to say something but he’s not sure what or to whom. Murray feels the same thing. No one is given a specific responsibility, so none of them is accountable for anything.
Without an Organization Chart, you will have to rely on luck, good feelings, and the goodwill shared by you and your people. These things alone can only lead to chaos and disaster. Organization requires more.
LET’S RECREATE WIDGET Makers. To make sure that it succeeds, the brothers consider their business as a corporation and not a partnership. Jack and Murray are shareholders and not partners. They are aware that nothing can be worse than a partnership that’s also a family business. To save them a lot of trouble later on, Jack and Murray agree that their role outside of the business is shareholders, while inside, they will think of themselves as employees.
Their next step is the creation of a Strategic Objective for Widget Makers. Murray conducts the needed research relating to the Central Demographic Model they have initially picked. Jack organizes the financial data required to secure a loan from the bank. The results they gather are encouraging so they continue to complete their Strategic Objective and start forming the Organization Chart. With the Strategic Objective indicating how they will be doing business, they come up with the necessary positions that must be included in the Organization Chart.
Even though only their names will fill out the chart, the two create a Position Contract for every position on their chart. This is different from a job description because a contract provides a sense of commitment and accountability to each person in an organization. Once they agree on who takes each position, the organization is complete. By building an Organization Chart, they create the blueprint for their Franchise Prototype.
JACK AND MURRAY BEGIN the process of prototyping from the bottom. If their business is going to succeed, they have to find technicians to do the Tactical Work so as to free themselves – the managers – to do the Strategic Work.
The brothers go to work in their business focused on creating a business that works. As Jack goes to work as Salesperson, he also applies Innovation, Quantification, and Orchestration to ultimately come up with a Widget Makers Sales Operations Manual. Only when this is complete does Jack hire the right salesperson – someone who is a novice and is open to the possibility of learning new skills. Murray does the same thing for each of the Tactical Work positions he’s accountable for. Eventually, Jack and Murray acquire freedom from the other work and become engaged in Strategic Work.
