How do you build an organisation?

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At what point in your business do you need to think about putting some structure around you? Interestingly it’s a question that rarely gets asked until it’s too late.

Recently I’ve worked with a number of business owners who have created substantial enterprises ($20 million plus turnover) but have resisted creating a team to support them because they felt they could do it all themselves.

Now this is admirable but certainly isn’t sustainable nor manageable in the long run. I’m sure we all know the downsides of doing everything yourself – unhappy customers, unhappy home life, personal resilience is damaged, ineffectiveness and low productivity creeps in.

Naturally putting a structure around you (or good old overheads as we often refer to them) needs to be balanced with a number of factors – affordability, productivity gains, fit with you and your culture, outcomes that can be achieved and so on.

The bigger question in my mind however, is that without some structure at some point in your business journey, how will you remain competitive?

So how do you start?
Like any good plan you need to start with your objectives in mind.

We always say that strategy comes before structure – but what does this really mean?

The first step in developing an organisational structure is to lay down its objectives in very clear terms.

What are you actually trying to achieve by developing a structure for your business?

What are the special characteristics you want to retain or must have in place to build your business?

Next, in order to achieve your objectives, you’ll need to determine which activities are actually necessary.

This will vary widely depending on the nature and size of your business – for example, if you’re a manufacturer you might have production, marketing and operations.

But if you’re a retail outlet, your needs might be quite different – e.g., it’s not likely you will have production facilities on-site.

The last part of the process is to think about clustering the activities into roles. With this in mind I like to talk to business owners about how much they need to own themselves and how much they can delegate to people who are more skilled than themselves.

This doesn’t necessarily mean you need to go out and hire six people to do the work of three but the opportunity to build a role or structure that will help you do what you do best, is liberating (and great for sanity levels).

Once you have defined the structure, the activities and the likely roles required these need to be supported with simple processes such as job descriptions, who is responsible for what, standards and accountabilities. You don’t need to write a novel, but you do need to clear your head and share your vision with others.

Lastly, one of the areas of resistance we often hear when talking with business owners, is managing the “what-if” factor.

What if I put a structure in place and things change?

What if I create new roles and the bottom falls out of my market?

What if I hire someone I don’t really like and they end up having a negative impact on my business? Yes, that’s true – these things can happen.

The lifecycle of business can be turbulent but with the right structures, processes and people around you the challenge of creating and managing strategy and structure inside your business doesn’t have to be faced alone and certainly doesn’t have to be complicated.

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About Author

Senga Allen

Human Resource specialist and managing director, Everest Group Ltd Waikato HR Specialists www.everestgroup.co.nz

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