Architects, scientists and designers can tell you that “form follows function.” The mistake that some owners make in running a small business is using an arbitrary structure that doesn’t support their enterprise. The organizational structure they choose doesn’t align with how the company actually functions. With the wrong kind of structure, a business is about as sound as a house of cards.
If you’re running a small business, here are a few things to keep in mind when planning or revising your organizational structure.
“If you want to go fast, go alone. If you want to go far, travel with others.”
So goes the African proverb. No matter what kind of business you have, you can’t do it alone. You’ll have to practice the art of delegation. In the beginning, it may not be necessary to hire a full time team. Consider contracting work and hiring part time employees. As a business grows, it needs reinforcement with more support, or else it crumbles under its own weight.
Specialization increases productivity.
It’s no good to hire more people if everyone’s doing everything. It’s more efficient and effective if each person has a specific job. Outline specific job descriptions for each position you need for running a small business the way you do.
Hire the right person for the right job.
I call this being people agnostic. What happens in a lot of small businesses, is that owners bring on family or friends to work for the company, and they feel obligated to give them certain positions that they may not qualify for. Not only will this cause resentment among other employees, but it hurts your business in the long run if people can’t perform the job they’re hired to do.
Have a clear depiction of your structure.
Share it with employees so they know the chain of command and who they report to. Most use a flowchart, pyramid, bubble map, or tree format listing positions and names.
Allow room for change.
As your business matures, you’ll observe that some positions are no longer needed or need to be revised. You may also find that new positions should be added.
In The 8 Factors framework, Structure is the seventh factor. That’s because as you work through the first six factors, you’ll have a better understanding of how you business runs best, and thus better understand the kind of organizational structure you need when running a small business.
You can view the other factors here.