Why Do I Need an Organizational Chart if There are Only Two of Us?

Feb 21, 2017, Written by Sue Miley

Don’t you hate when you do things you advise others not to do?  I have done that on more than one occasion.  This post is one of them.

When I started Crossroads, it was pretty much just me.  I had a couple of other people sharing space, but employees, no.  When I added my first employee, there was not any real strategy in place.  I knew I needed someone to help me with administrative stuff.  I knew I couldn’t spend time training anyone because I was always in with clients.

So, I hired a friend.  I know, right…

But, she was older and had been an administrative person before.  She could whip me and the office into shape in no time.

That didn’t exactly happen, although she was a big help. That was not the issue.  The thing is, I had never planned out my organization.  As I grew, I just got busy and knew I needed help.  Then I needed more help.

I am a planner.  I like to buy planners.  I like to make plans.  I even sort of follow my plans.

But, I had never planned my team.

I didn’t have an organizational chart.  I had thought about it early on in my company planning, but since it would be years before my kids were grown, I knew I would stay by myself for awhile.  At the time, that gave me maximum time flexibility.  I could come and go as I needed.  I had minimal overhead.  It was what I needed then.

The problem, as you can guess where I am going, is eventually we grow.

My “eventually” came about 5 years ago, and then we started growing pretty fast.  So, I added people that didn’t stick.  I would add contract labor that was experienced; that, I knew to do because I still didn’t have time to train.  Ultimately, I didn’t really have an organizational structure.

Of course, I tell clients that they need an organizational chart.  I tell and ask them:

  1. Think about where your business will be in 5-10 years if everything goes as you would like. 
  2. What would your organizational structure look like then to support this longer-term vision? 
  3. Who should you hire in the next year that will grow into the longer-term vision, but also be helpful today?

Let’s break this down a little.

Your 5-10 Year Vision

We need to know where we want to take our business for many reasons, but one is so that we know what kind of team we will need to run it.  Depending on the kind of business, and even the strategy for executing the business, the type of team members can change.  It is just as important to have people with the skills you need as it is for them to match the culture you want the company to embody. 

Think about your business in 5-10 years.  What size will you be?  In revenues?  In the number of employees?  Will you work in a home office or remotely?  Maybe you will have branches.  Does your business require technical skills?  Technology?

Organizational Chart for The 5-10 Year Vision

Now that you have an idea of what you want your business to be like in the future, you must assume you will be successful in getting there.  If you are successful, what kind of a organizational structure would you need?  What kind of a team would you have put together?  This is really important for several reasons:

  1. You know what kind of positions and talent you will need long-term.
  2. You can hire people with the long-term in mind.  Will they make it in the long-term organization?
  3. You can show candidates the career path of their job in your company.  Even if there is only a couple of employees, they still want to know that they have room to grow.  Showing them the longer-term organizational chart may be just the inspiration they need to want to come on board when you are still in the planning stages.
  4. Having the longer-term organizational chart also helps you in your pro formas and projections.  How much will our personnel costs be in 5-10 years?

Obviously, you can make adjustments over the years, but hopefully you were directionally correct when you put your plans down on paper.

Organizational Chart in the Coming Year

Now you can look at the coming year and plan what people and resources you will need.  However, now, you can plan it with the future in mind.

Let me hire this person who costs a little more, but has management skills.

I know I will need a manager by Year 3, if all goes as planned.  

Even though I am small now, when they see the plans we have, surely they will want to join our team!

I always advise clients to hire the best talent to match what your management abilities are today and make sure that you can see them in at least one or two other positions in the next 10 years.  This will significantly help your employee retention.

Today, we have nine of us at Crossroads.  I actually do have plans.  We are still in the small stage where several of us have our name in multiple boxes on the organizational chart.  That usually is the case for a small business, however, it is extremely helpful to know what kind of help will reduce the number of boxes any one name is in.  And, which box on the organizational chart is the best fit for each individual.

This ensures that you have the right people in the right seats on the bus and that, although seats may change, you will have several people continuing with you on the journey.

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Sue Miley

Sue Miley MBA, MA, LPC helps small business owners build successful businesses on a foundation of Christian values. After 20 years in business, and 10 years as a Christian counselor, Sue uses a combination of faith, business and psychology to help clients in business and in life.

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