Your Small Business Organizational Chart – What to Consider

What is an organizational chart, and why is it important to your business? You may be asking those questions. If you are, then consider this information, because the chart is actually quite important and you will need to consider many things when creating one.

Chances are, you have already seen or heard of an organizational chart in the past. It is a flow chart of sorts that lists the positions of all employees at your company, and lists them in order from top to bottom. An organizational chart will show the chain of command for all employees.

Why is it important? It is vital that all employees know to whom they answer directly. They also need to know who is their ultimate boss, so that they always know who to go to when there are concerns, requests or questions.

One thing that can cause a big problem in a company is confusion. If you allow confusion to persist, your employees will lose moral and it could greatly affect their work and eventually lead to them leaving. An organizational chart is an excellent way to avoid confusion among current employees and help new employees get an idea of the chain of command.

Even if you have a very small business with only a few employees, an organizational chart is still vital. Often, in extremely small businesses, the chain of command can become confused. By providing your employees with a specific chart, you will be able to keep these problems at bay.

When you begin the process of making your organizational chart, there are some things that you will need to consider very carefully. The main purpose of this chart is to show who each employee’s direct supervisor is.

If you do not already have an exact chain of command in place, then you will have to take some time considering just how it should go. What people need to answer directly to you? Are there people in your business who are responsible for other employees? Do you have supervisors or managers?

You will have to answer these questions before you begin the process of your organizational chart. You can also use the chart to spell out what exactly is each person’s job responsibility.

You may want to include a short list of bullet points with each job title to show the main responsibilities. This means that you will need to take some time considering just what each employee does. This can be a great way to keep all job responsibilities in order and avoid confusion.

An organizational chart can be a great way to keep confusion out of any business. It can be helpful for small businesses especially, where lines can easily be blurred.

How Productive and Effective Operations Can Help You Grow Your Business

Summary

Every business needs safe and lean processes in order to survive in today’s highly competitive environments. This article takes you through some of the things you should be considering if you want to remain competitive.

Lean manufacturing has a concept of “value added”. This is used to describe processes that move a customer’s order forward. Waiting for something to happen is called “non-value added” or waste and needs to be eliminated. A lot of people concentrate on reducing the costs of doing the value added operations. However, if you analyse a process whether you are a service or product based company you will find only 25% of the time is spent actually adding value, the rest of the time is waste. Working on eliminating waste will have a far greater impact on improving customer service, costs and ultimately your profits.

The best organisations flow chart their processes and are then able to see where processes are broken, involve waiting and double handling. The quality standard ISO9000 allows for flow charted processes and this can be invaluable in helping to not only ensure that processes are adhered to but are also as efficient as they can be.

ISO9000 also means that your processes are reviewed and accredited by external experts in process management. This can be a very useful in helping to identify flaws or gaps in your processes.

As the cost of waste and utilities such as gas and electricity continues to rise then ensuring the business is environmentally aware is essential in order to stay competitive.

In addition to the quality standard, there are management systems standards for health and safety (ISO 18001) and the environment (14001). These can be combined with ISO9000 to become one management system for your business. For high growth businesses that have grown into larger businesses then a combined management system is essential in keeping the business safe, legal and environmentally sound. The savings made through reductions in injuries, claims and waste more than pay for the system to manage them.

Health & Safety

High growth businesses are safe places to work. They take health and safety seriously because it pays to do so.

Depending on your industry or business sector, there are a myriad of regulations relating to health and safety with many workers having to complete mandatory training before they can operate machinery such as fork lift trucks or even something as simple as a ladder.

In the past somebody in the company would be assigned the role of health and safety on top of their full time role in the business. You do need somebody to have that role but a cost-effective solution is to use one of the many third party providers who will act as your Health and Safety Competent Person. They can audit your operations and advise you on the actions needed to make your work place safe and compliant with current regulations. The internal person must have sufficient authority to ensure that the actions are then carried out.

ISO 18000 certification (or OHSAS 18001) covers Occupational Health and Safety Management Systems and is a means for embedding health and safety awareness into a business.

Lean Processes

Lean thinking is about looking at the business using a range of simple to use tools that help you become more effective and more efficient.

There is a phrase that sums up lean thinking and that is, “a place for everything and everything in its place”. This means that:

  • You only keep what you need to do the job. This means getting rid of through selling or disposing of anything that you don’t need to do the job in hand. If you haven’t used anything for 6 months then you are unlikely to need it. Storage costs money because it takes time to store it, the space you use could be used for productive work and you spend valuable time looking for things.
  • Keep those things that you need to do your job close to hand. Make it easy to find whatever you use whether it is a tool or a stapler. Clean out your desk if you are office based or create a shadow board for the tools you use. Make sure there is a place for everything that you need.
  • Keep your workstation clean. If you have removed all the clutter from your workstation (this applies to both the shop floor and the office) then it is a lot easier to keep it clean.
  • Create standards for your workspace. Take a photo of it and place it in a prominent place. Do this for shared areas such as kitchens, photocopiers and machine tools. This means everybody is reminded of what the work area or office should look like.
  • Sustain what you do. Create an end of day tidying and cleaning routine that means when you return to work the next day it is as fresh and clean as you are.

There are a large number of books on lean thinking and the principles can be applied to more or less to any work environment whether in manufacturing, distribution, construction, retail, office environments and education.

Documented in Flow Charts

Every scalable business is based on a series of processes, procedures and working instructions. Many organisations especially franchise businesses have written documentation which explains in detail what has to be done and when.

Written documentation in the form of manuals and ISO procedures are fine however they don’t make it very easy to see the flow of the business and where the opportunities for improvement are.

It is now good practice to flow chart your procedures in the management system. This gives you the opportunity to work through every process in your business and work with your team to remove duplicated effort, inefficient processing and time spent waiting for something to happen.

Flow charts make it easy for your team to see the whole process. Usually a process can captured on to one page which makes it easy to see what is being achieved.

The process of flow charting can be a powerful team building activity as it allows everybody to contribute and identify improvements to the process. The tools are simple, just take a flip chart and start at the beginning of the process and then keep asking, “what happens next?”. Make sure you look at each decision and write down all the possible outcomes. Once you have captured the flow chart on the flip chart use one of the readily available flow charting software packages to store it electronically. They can be presented in PDF format and saved on an Intranet for easy access by others in the team.

Flow chart every process in your business and make sure each time you do a process you take the opportunity with the team to make it more effective and more efficient.

Implement any changes that you have agreed and ask your team to review the amended flow chart.

After a few iterations you should start to see the benefits in the way you do things in your business.

ISO Standards

The ISO 9000 quality standard is a key accreditation for a lot of businesses and many larger businesses will not work or can’t work with a supplier who hasn’t accredited to ISO 9000.

Once you have flow charted your processes then accreditation to ISO 9000 is relatively easy as the hard work has been done.

One of the key benefits of ISO 9000 is that you regularly audit what you do to ensure that are doing what you are saying that you do. If there are regular non-conformances then you need to review your processes to determine why as not keeping to the process may mean that the documented process is wrong or there is a fundamental problem with the process.

Environmentally Sound

With the world’s resources becoming scarce and so it is socially responsible to ensure that you make best use of the energy, water and materials that you use.

As political pressure to protect the environment and the cost of disposal continues to rise through increased waste taxes then it is also commercially important to be environmentally aware.

The first stage in the process is to get a third party to undertake an environmental audit. An experienced third party will be able to spot opportunities for improvement and often cost-savings far easier than an internal person.

The actions from the environmental audit should then be fed back into the continuous improvement plans for the business.

The standard ISO 14000 if incorporated into your management systems can be a long term method of embedding an environmental consciousness into the business.

Continuous Improvement

As the only constant in business these days is change then it makes sense to have a process for continuous improvement to ensure that what the business does is in line with what is required of it by its key stakeholders.

The size of your business will dictate what processes you need to put in place in order to ensure that you do regularly review your business. Some ideas for maintaining continuous improvement include:

  • A cross functional team with board level representation meet to develop and progress an overall action plan for improvements in a business.
  • External auditors (quality, health & safety, environment), business coaches and non-executive directors are used to help the company identify areas for improvement.
  • Taking part in business awards which forces you to identify all the things you are doing well.
  • Competitor reviews. Look at your competition and ask what are they doing better than you? Is there anything you can learn?
  • Ensure the concerns of all your stakeholders (customers, employees, suppliers, shareholders) can be heard through all levels of the business.

Create an action plan for improving your business championed by a board level director and that it is given a priority that ensures that over time the improvements are embedded in to the business.

3 Ways Charts Focus On Goals

Successful organizations achieve their goals. Unsuccessful organizations do not. What makes successful organizations successful is the ability to keep everyone in the organization focused on the goals. This focus helps them make decisions and keep their actions focused on achieving the goal.

There are three ways charts can be used to help your organization achieve its goals.

  1. Analyzing and defining your goals
  2. Presenting your goals
  3. Providing the feedback

Charts force you to convert your goals from platitudes to Key Performance Indicators (KPIs). Converting your strategies and tactics and other actions into KPIs allows you to show their impact on your goals.

Charting the of your goals makes them real to your team. Charts show your attention to the application resources on strategies and actions that impact your goals. The focus also reduces the resources committed to actions that don’t affect your goals.

Having clearly identified goals does not by itself drive results. You need to communicate your goals. You need to show your business units, what their targets are. You may need to show your investors and creditors what you’re doing to achieve your goals.

The charts presenting specific KPIs measuring your goals and the actions you’re taking to your goals fill this need. A different set of charts can be presented to each audience allowing the focus to give them exactly what they need to see.

Finally, if you want to encourage people to continue focus on goals, you have to provide them with feedback. The same charts you used to communicate your goals and actions to reach them become a tool for reinforcing focus on your goals.

Using weekly, monthly and quarterly updates on performance let your team know you are paying attention. The result is a renewed focus on your goals.

The flexibility of charts allows you to fine tune your feedback. You can tweak your charts as needed to adapt them for different business units within the organization. The result is more specific and relevant feedback to each business unit. This approach is far more effective than broadcasting a general set of feedback reports or charts.

So,, if you want to improve your organization’s performance convert your numbers to charts. Use charts to identify your goals and tactics. Communicate your goals and relevant KPIs through charts. And chart ongoing performance against your goals and tactics to give targeted specific feedback to each business unit within your organization. Use charts for all three purposes and you will increase your organization’s ability to achieve goals.