6 Examples of Effective Design for your Organizational structure

How does your business operate right now? Who does what? Who reports to whom? When the roles, responsibilities and relationships of people in your business are unclear, work will not be accomplished in a timely and accurate fashion. Many companies invest significant time and effort into designing a robust organizational structure.

Organizational structure gives form and shape to your business

Coordinating the work your people do and their working relationships to let people work cooperatively and efficiently toward a common goal.  Without forethought, as a business grows there is little flexibility and room for expansion.  A strong organization structure blends talent, strategy and resources facilitating easy decision making because everyone is aware of their role.

3 Guiding Principles to Effective Organizational Design

Where do you start?

Changing the organizational structure of your business can seem like a daunting task and naturally requires a great deal of thought. Before redesigning your organizational chart consider these guiding principles to help clarify your thinking.

1. Organize your business around positions, not around people.

The functions of your business are completed by the various positions in your organization. The people that fill these positions are vital but if you organize your business around their needs, you are not focusing on improving the functions of your business. How can you organize your business to ensure that positions and the people that fill them have a clear sense of their responsibility? Clarify what needs to be done and then create an organization chart to reflect the functions.

Tip: When you are working on your chart, imagine that you are starting with an entirely new staff.

2. Keep your organization as flat as possible

More agile decision making occurs when there are fewer layers of management and greater personal ownership of tasks. Too many layers can develop a “pass the buck” or “fiefdom” mentality where decisions that should be made quickly are over debated. Take a look at how to Supercharge your business with effective team development.

Tip: Assess whether you are receiving real value from each of your management positions.

3. No one should have more than one manager

Multiple managers for one position gets far too confusing when setting employee priorities. When multiple tasks must be completed for different departments of the company it is difficult to ask employees to juggle conflicting priorities.

Tip: If employees need to work in more than one department, assign one manager as the “primary” manager.

Prepare to Write

Keeping the functions of your business as the highest priority of your organizational structure will provide clarity to the roles and responsibilities of your people. To understand how employees work together take a look at 7 practical strategies for successful working relationships.

Mark Wardell's 10 Tips for Recession-Proofing Your Business



1. Focus on efficiencies

When times get tough, most people think about cutting back on their expenses, which is excellent advice if they have internal waste. But watch out for the trap of decreasing your margins. You can only cut costs so much. Eventually you also need to focus on the efficiencies of systems employed to operate your business. For example, almost every business could improve its production process by revamping employee job descriptions and workflow.

2. Embrace automation

While automating your production processes may absorb some cash up front, if you can afford it, it’s almost always worth the investment in the long run. The timing is usually right, because the cost of buying equipment typically comes down in a sliding economy.

3. Train, train, and train some more

Most business owners hire employees, and expect them to fit right in and do a great job. Then they get frustrated when things don’t instantly work out the way they planned. Instead, start every new hire with a comprehensive training program and establish a regular training schedule going forward. Depending on the job, this can often be accomplished in as little as 10 min per week.

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