Many small business owners have never had the experience of working for a well-organized large company. Others have had the misfortune of working for poorly organized, dysfunctional small companies. As a result, they don’t know how to structure their own companies as they grow.
This lack of understanding is a very common reason so many small businesses don’t have the structure to grow into larger businesses…and why their companies default to Swarm Management. (Which I defined a few weeks ago as the entire company madly flailing away in well meant pursuits but wasting huge amounts of time, energy and money due to non-existent organization.)
Your organizational structure should expand and adjust as your company grows just as your skeleton adjusts as your body grows. Both are designed to support the structures they serve as the framework for. (The causes of Swarm Management are discussed here.)
Time and space constraints don’t allow me to present the vast array of organizational charts that exist in growing businesses. But, here are a few questions to ask yourself to help you get organized (or stay organized) if you fear Swarm Management has become part of your company. For example…
Who does this position report to and who reports to this position? Every employee can have only one boss. (This is especially important to keep in mind in family-owned businesses.)
Think of it this way. When targets aren’t being met AND all the excuses have been made AND the finger-pointing is done then who is going to be held accountable? The answer to that question indicates who the manager (boss) is and who the worker is. Now that you have defined who answers to who…
What are the results this position is expected to produce? How will this position’s performance be measured? It’s important to be specific on this one. Vagaries don’t work here. For instance, your job requirements may state: “Bookkeeper is expected to produce accurate financial reports in a timely manner.” WRONG! Instead, your time frame (deadlines) should be stated in specific terms: weekly, daily, or monthly. Or …
You may currently state: “Techs must deliver good service.” WRONG! Instead, “Each technician is expected to create ___% Customer Cheerleaders of their total job base. A Cheerleader is defined as…” Or you might say now: “Salesperson is expected make high sales.” WRONG! Instead have in writing, “Sales person must produce ___ number of new clients grossing $____ producing a ___ % margin over this time period: ____.”
Next, ask yourself: “How will the person in this position be evaluated? How will they know when they’re doing a good job? How will they and I measure performance improvement?”
Remember, if you can’t measure someone’s performance with a number then the performance expectations need to be clarified. This becomes even more important if their compensation is tagged to their performance. It can become even more difficult when a friend or family member is involved. After all, ask yourself, “Do I really want to reduce my friend’s contribution to the company to a number?” My answer? “Yes, you do!”
When everyone in your company has 1) a clear understanding of what results they’re responsible for producing and 2) exactly how their performance will be measured and 3) who will be doing this evaluation- GREAT! Now your people can stop running around like a bunch of kids playing swarm soccer and they can start winning like a well-organized and disciplined World Cup team!
Chuck Violand (more about Chuck)
SFS Instructor
CEO Violand Management Associates