Are you and the people you work with happy? Is it easy to get your job done without jumping through hoops? If yes, chances are your organization is healthy. If no, there may be fundamental structural flaws in the way the business is set up. Start by asking yourself if you can relate to the following common mistakes:
An Org Structure that’s Out-of-Touch With Reality
An out-of-date organizational structure is a common problem. Too often an organization goes through changes that aren’t reflected in the org chart or anywhere else for that matter. The old hierarchy that everyone is used to remains in place, but does not reflect reality and only ends up holding the business back. If your business has an org chart (and we hope it does) you can look at it and ask the following questions:
Is the reporting structure in this chart accurate and up to date?
Do people really work with/report to the people it says they do?
Is this the complete picture or are there other things happening that are not indicated?
If you answered no, a “stay with the status quo” attitude may be keeping your business from thriving. If you don’t have the direct power to make changes, a clearly inaccurate org chart can serve as the beginning to a conversation with those who can.
Unclear Roles & Responsibilities
Although this seems obvious, if you dig deeper, you’ll be amazed at how many people don’t fully understand what they’re ultimately responsible for. Unclear roles are one of the biggest sources of conflict within an organization. This leads to confusion, unmet expectations, and ultimately makes people feel demoralized. The best way to health check for this is to look for recurring roadblocks in the business flow. If you don’t have anything that documents how your business operates, creating a simple flowchart can be hugely illuminating. Feel free to use this as a guide. Then ask the following questions:
Is any department or person responsible for a disproportionate amount of work?
Does any department or person have a consistently hard time meeting deadlines? Do they need to clear numerous hurdles to get their job done?
Are there multiple people doing work that could be done by one?
Are there multiple “final approvers” whose opinions clash?
Evaluating individual roles is more time-consuming than evaluating the organizational structure as a whole, but it is one of the most common sources of dysfunction. Rather than looking at individuals, start by looking at departments. How smoothly they operate is a clear indication of how well the people within that department fit into the organization as a whole.
High Attrition Rate
If you or the people around you are disengaged at work, you’re not alone. Unfortunately, a majority of employees in the United States are in the same boat. One key reason is you guessed it—poor organizational structure. The two common mistakes above can cause extreme frustration, leaving employees feeling powerless and ultimately not caring about their work, which in turn leads to high attrition rates.
A high turnover rate is a sure sign that your org is broken and if nothing else, the extremely high cost of recruiting and training, should serve as a motivator to make a change. If you don’t believe that hiring is expensive, we recommend reading You’re Not the Person I Hired, by Janet Boydell, Barry Deutsch, and Brad Remillard, a book we at Gliffy live by for hiring and recruiting.
How to Fix Your Organizational Structure
First, you need to agree on the core functions of your business (another seemingly easy activity that is in reality far from it). Next, identify Key Performance Indicators (KPIs) that will help you measure the above core functions. This will serve as numerical proof of whether the efficiency of your business is improving. Measure your KPIs before you start your reorganization, then measure again once the transition is complete. Numbers don’t lie. A word to the wise: watch out for too many or unrealistic KPIs. Nothing is more demoralizing that having goals you know you can’t reach.
Clarify Employee Roles
Once you have identified the core functions of your business, it’s time to define the key players. When all employees understand their importance within the organization and can do their jobs without having to jump through hoops, disengagement turns into drive. This kind of initiative must start with complete agreement and support from upper level management and must trickle all the way through the organization.
Keep Your Org Documentation Up-to-Date
A living, breathing org chart and a business flow diagram that changes with your org can help clarify and keep track of the structure in your organization and identify any problems that may arise. As a bonus, if shared with your entire workforce, these two documents can help clarify any structural changes for employees who want to stay informed.
Learning to recognize poor organizational structure is essential if you want your company to thrive. Heed the common mistakes above as a warning and don’t wait to do something about them.
There’s no sugarcoating it—going through a reorganization is difficult, time-consuming and will be disruptive in the short-term. But disrupting the status quo is the whole point. Long-term benefits are huge, starting with increased productivity and improved employee happiness and ending with vastly improving the potential and possibly even saving your company.
We hope that your business is as vibrant and healthy as they come, but if it’s not, we hope you do something about it. Documenting business flow and creating an org chart if it doesn’t exist already, are great first steps. We wish you lots of luck on your reorganizing adventures!