The New Organizational Chart

Each role in the organization should have a precise contribution to the company’s vision.

In many businesses, especially startups or fast-growing companies, a fire pops up, and a typical response from the business is to hire someone to put out that fire.

“Fires” aren’t always life-or-death situations for a business – the “fire” could be bandwidth constraints in a specific department, a new specialized skill that one of the leadership read about in a business magazine but is lacking in the company, or someone who will just do the tasks the rest of the department doesn’t want to do.

Without a strategy to reference back to, the hire seems like a good idea.

So what’s the solution? We’ll tell you, but first, let’s back up and discuss your organizational structure.

As Gino Wickman (author of the book Traction and the foundation for the business operating system, EOS) asks, “What is the right structure to move your organization forward in the next six to 12 months?”

This is where we’ll start.

It’s important not to be thinking yet about who is currently on your team and where they fit in. Do your best to put that aside for now and look solely at structure.

There are a few major functions that exist in every organization:

1. Head of the Company
This is essentially the person who sets the vision. You might refer to them as the CEO, Founder, or Visionary. They might also be the majority owner, but not always.

2. Sales & Marketing
Sometimes, depending on the industry and size of the company, this will be divided into two functions.

3. Operations
All of the functions in the business that “keep the trains running on time.”

4. Finance
Management of all business functions related to proper and compliant deployment of the company’s capital resources.

Some companies, depending again on industry and size, might also have another major function. Like the tech department, for example.

For clarity, by major function, we mean there’s someone representing that division who reports directly to the Head of the Company.

So, start by laying out the major functions you’ll need to meet your one-year plan.

Then, look at other needed functions and determine the reporting structure. For example, is HR under Finance or Operations? Do you need a Legal function? Now, identify all other roles required to support each of the functions.

As you’re working with the leadership team to build the new org chart, identify each role’s primary responsibilities. Try to be specific. Keep in mind that this is the organizational structure required to get you to your one-year goals.

For example, if it’s important to increase positive customer reviews, you might list as a responsibility under the Customer Service Director role something like, “Increase 4.5+ star customer reviews by 20%.” This will provide more direction and clarity than simply “Customer reviews.”

Often, in a smaller company or start-up, an individual may sit in multiple seats within the organization. This is OK, as long as there is a clear path to getting that person to 100% GWC and each seat that person inhabits is represented on the org chart. GWC is EOS-speak for gets what the job role is and what is required of them in that role , wants to do that job role, and has the capacity or aptitude to be successful at the job role.

We often recommend creating an organizational chart for your future goals (what roles will be needed when you get to that one-your plan) and another for your current situation. You can then start planning the steps from today to one year from now. Ask your leadership team questions like:

• Which roles need to be filled first?

• Who is not a current fit for the role that needs to be replaced? The People Analyzer (example below) will provide you with clarity on this.

• Who sits in multiple roles and is running out of capacity?

• Which roles must we remove from certain team members’ workloads?

Keep in mind that in an ideal situation, there should be no shared roles. Only one person can own a seat. Remember, when more than one person is responsible for an action, no one is. Having more than one person responsible for the role opens up the possibility that someone thinks the other person is handling it.

Once the new org chart is drawn, it’s time to determine who in your current team should sit in each “seat on the bus.” It’s important here to consider who is truly best for the role and not just the role that the person is in today.

Our favorite tool for determining the right person for the role comes from the Entrepreneurial Operating System, or EOS, and is called the People Analyzer.

The People Analyzer helps ensure that everyone on your team is well-positioned for their role and aligned with your core values. The tool uses a simple “plus/minus” system to evaluate team members on your core values and whether they GWC the role.

By understanding and utilizing the People Analyzer, you ensure that every individual not only understands their role but thrives in it.

Setting the Bar

Before using the People Analyzer for evaluation, it’s essential to work with the leadership team to set the baseline People Analyzer score for what is expected from that role. In the example below, you’ll see the bar is set with four + and one +/-.

How many +/- will you allow when it comes to your core values? There should be no straight negatives (-) permitted in the bar. And everyone should GWC their role. Without a GWC fit for the role, expect either turnover or inadequate execution of the role.

Gets It

When someone “gets it,” they fully understand the role and its significance within the organization. It goes beyond just knowing the tasks. It might even seem like they were born to do the job, that they have an inherent ability.

Wants It

To “want it” is exactly how it sounds. The person genuinely enjoys the job, and they want the responsibility and to be appropriately compensated for the role. They have the drive and personal investment to be successful in the role. Wanting a role solely for an increase in pay does not qualify.

Capacity To Do It

“Capacity” refers to both time and the mental, physical, and emotional ability to take on the responsibilities of the role. They need the endurance and adaptability to maintain a high performance despite potential challenges.

Core Values Alignment

The People Analyzer clarifies whether the individual exemplifies the organizational core values.

It’s essential to ensure that the core values are well-understood. Ambiguity can lead to a lack of performance insight and inconsistent evaluations.

Acknowledgment of growth potential is important in this process. If someone doesn’t “meet the bar,” allow them to get there in time. Provide clear guidance on how to show improvement, to what degree, and by what date.

This clarity not only encourages staff but also removes subjectivity from the “unhiring” process. Individuals will often choose to leave on their own accord if they don’t wish to follow the improvement plan laid out in their employee review using the People Analyzer. Or, if they decide to stick around but not follow through, then they know their job is at risk.

Building the right team isn’t a one-time task. It is an ongoing process. Ensuring the right fit goes beyond just the recruitment stage. It extends to onboarding, training, and performance reviews. So, in the next module we’ll discuss the exact steps that we use to help you make sure the team is the RIGHT team to meet the company’s goals.