Strategy

31st January 2018

Structure

When businesses are small structure doesn’t matter much, but if you want to scale structure is one of the first things that you need to get right.

When businesses are small it can be OK for everyone to muck in to get things done. You probably don’t need a hierarchy or defined responsibilities, management skills or even bosses for that matter. You can just get stuff done, in the best and most effective way you can, a little like the way young kids play football, with no thought or consideration for who are the forwards and who are the defenders. It works well enough the way it is with everyone following the ball around in one big amorphous gang.

In the same way as a kid’s football team wont win any serious competitions a business without structure can’t and won’t grow. A business where everyone reports directly to the boss is fine, as long as you don’t want it to scale. If everyone reports to the one boss, sooner or later, the business will stop growing as the boss becomes disillusioned, exhausted and burnt out.

If you are serious about growing the business you need to think about the structure that the business will need to support and manage the size you want it to reach. Most businesses, of whatever size, need people to sell our goods or services, people to do or make whatever the business does (operations), people to count and account for what the business does (administration), someone to handle all of the people legislation and record keeping modern business demands (HR), and people to tell customers who we are and to attract customers to deal with us (Marketing), and finally someone to direct and manage this structure (The MD).

It is a good idea to think about your business, not as it is now, but as it will be when you are successful. Think what structure you might need at that time and write it down as an organisation chart. Check that it makes sense. Make sure it is clear who reports to whom and for what. Make sure that everyone has one clear boss and never draw up a chart where someone might appear to report to two people or more. Take some self adhesive post it notes. When your business first starts out you will find yourself putting your own name on every slip in every position, because when it is only you, you will be doing the sales manager role one minute and the accountants the next. That is OK but it is still worth the effort to do the exercise, because every time you appoint someone new you can take the note with your name on and replace it with the name of your new recruit. It will be clear exactly what that new recruit is there to do and where they fit in the structure. If you are adding their post it and not taking one of yours down it will be obvious that you are recruiting a ‘doing person’ rather than a ‘thinking’ person. You won’t have relieved yourself of anything. Although you might have bought some help you have retained the burden of running that part of the business, so in many ways, your task has gotten greater not smaller.

Don’t be one of those business leaders who gets burnt out because they haven’t paid attention to designing a structure that works with the right people in the right seats.