Six Reasons to Dust Off your 'Org' Chart
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Six Reasons to Dust Off your 'Org' Chart

Six Reasons to Dust Off your 'Org' Chart

For better or worse, an organizational (org) chart can communicate many things to your business family. While the act, or perhaps even the thought, of defining your management structure may seem tedious, the development and communication of it to your team is critical to maintaining profitability, managing expectations, and motivating performance. Leading a stronger and more focused group of individuals will only increase the value of your business and protect future profitability which is at the core of succession planning.

  1. Refocus your efforts. If you have been in business awhile, an org chart will help you get back to understanding the original purpose, core functions, and skill set required for each role rather than on individuals who carry unique strengths and weaknesses. In many organizations, there is a greater focus on the individual rather than the role. Even the best leaders have a natural tendency to focus on relational accountability; where they would prefer to mold the role to an individual rather than find a manager better suited to the actual needs of the role.
  2. Improve your operational efficiency. An org chart will quickly illustrate whether an individual is performing the role that is core to the organization, or whether the role has been adapted to accommodate the individual. This presents the question as to who is filling the core responsibilities that are missing which in turn leads to the question as to whether there is "upward delegation" - the manager may be picking up the slack for their direct report, which then begs the question as to whether the manager is fulfilling their own core job functions.
  3. Coach and develop your future leadership. Once the org lines are drawn you can more easily identify any opportunities to coach on leadership to those managers who seek advancement in the organization. You can zero in on the skills, knowledge, and attitude they need to learn in order to advance their careers while continuing to keep your business profitable. Per John Maxwell, relying on "Positional Leadership" (being above another in the org chart) is the lowest level of leadership. Any leader who derives satisfaction from the position itself rather than the weight of responsibility from that position needs leadership training.
  4. Identify the gaps. Is there any player on the team that lacks a successor for their management position? What does the bench look like? What are the roles you may need to begin recruiting for and are you set up to screen and identify the best suited candidates? It only makes sense that if you can get the right hires in at the start, succession becomes that much more fluid and effective.
  5. Succession before promotion. In the spirit of promoting from within, avoiding skill gaps, and leading a motivated organization, are your managers required to mentor and develop their replacements? Would you consider this a mandatory requirement to achieve a promotion in your organization? Managers who proactively develop their successors often don't realize how impactful this can be towards motivating performance in the individual's current role.
  6. Managing expectations. The current generation of future leaders has grown up with a focus on individual recognition and an expectation that organizations will leverage their unique individual strengths. An org chart is a very fundamental way of expanding that focus of those with a limited world view. Because when you communicate your org chart, everyone will understand how promotion and advancement work in your company and it sends a strong and clear signal to young successors. It can also remove perceived bias from decision making and illustrate a clear career path for those motivated to grow with your company.

Maybe you're avoiding your org chart because it may elicit difficult questions and decisions. And you may be right but in the absence of a clearly defined and communicated org chart, business owners will experience the following symptoms:

  • Managers engaging in unnecessary and unproductive turf warfare.
  • Allowing only naturally dominant managers to rise to prominence because they are conveying a sense of entitlement and power established through a survival of the fittest environment rather than the required skills, knowledge, and attitude.
  • Risk losing some of their best talent because top performers want to work for a well-run organization where they can see potential for their own career goals.
  • Even more harmful to your business is when you indirectly or unknowingly demotivate staff because they view advancement as being biased, yet rather than leave your organization they choose to stay.

Sometimes the family aspect of your family business will keep you from taking the time to fully develop an org chart or to purposefully think through the accompanying job requirements. A family priority suggests that the business represents an opportunity to fulfill family ambitions. But what if your first born is more interested in running your business than learning it. Meanwhile, your second born has applied herself fully to earning her business degree and has worked every operational job in your organization to develop first-hand experience and knowledge of what is needed to perform those functions successfully. Now the waters start to get murkier and the anxiety level among the entire family starts to rise. This is just one of the many situations family businesses may have to face, which is why it is absolutely critical to position any successor for success and it is equally critical to teach your family successor to be an employee first.

This would subscribe to the belief that the family represents an opportunity to not only preserve the business but lead it towards even greater prosperity. While there is a balance that must be maintained between the two approaches, it is imperative that a successor can hear AC/DC playing as they look at an org chart - "It's a long way to the top if you wanna rock 'n roll!" and a successful leader must prioritize the organization before themselves and focus on what is good for the business and family long term.

 Jeff Bannon is a partner with The Rawls Group - Business Succession Planners. Entrepreneurial owned businesses are close to Jeff's heart. With the recent passing of the baton of his family's law firm between his grandfather to his sister, Jeff has witnessed the benefits and rewards the planning process. For more information visit www.rawlsgroup.com or email info@rawlsgroup.com.

Published: December 25th, 2018

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