Organizational Structure Tips by Rich Allen

Importance of an Organizational Chart

• Many business owners overlook the significance of their organizational (org) chart.
• A well-defined org chart is critical for clarifying responsibilities and relationships within the organization.
• Helps ensure all tasks are covered and loose ends are tied up.

Tips for Building an Effective Org Chart

1. Forward-Thinking Structure

• Design your org chart imagining what your organization will look like in 3 years.
• Drawing out a future-focused chart helps in planning the direction of the organization.

2. Function-Based Chart

• Construct the org chart based on functions, not individuals.
  • Even with a small team, there should be multiple function boxes.
  • Individuals may occupy multiple roles or boxes (e.g., owner may also be the operations manager).
• Example: Joe might be in charge of operations, purchasing, and assembly.

3. Sequence Future Hiring

• Use the org chart to plan the sequence of future hires:
  • First, fill the marketing role to relieve the owner.
  • Second, add a sales representative.
  • Third, provide Joe help on the assembly side.

Benefits of a Function-Based Org Chart

• Clarifies who is responsible for what within the organization.
• Shows opportunities for growth and progression within the company.
• Assists in strategic planning for hiring and organizational development.

Final Thoughts

• Creating and visualizing a forward-thinking, function-based org chart can strengthen your business.
• It aids in making the business more profitable and powerful.

Rich Allen encourages reaching out with any questions for further guidance.

Enjoyed the session and look forward to the next profit tip from Rich Allen.