Answer the following questions with a “yes” or “no.”
- The word “organization” is taken seriously at your firm
- Company policies are written down, clear, and accessible
- All roles in the company are defined and have SMART objectives
- Each employee has one boss
- You have a written organization chart that shows relationships
- The organization’s structure is regularly reviewed and updated if necessary
- Everyone operates within the organizational framework.
Jim CastigliaAccording to management theory, an organization is one of the five elements of management. The other four are planning, staffing, directing, and controlling.
An organization is any collection of people and activities formed for a specific purpose.
Webster’s dictionary defines organization as “an administrative and functional structure.”
It defines the verb “to organize” as “to set up an administrative structure; to arrange by systematic planning and united effort; and to arrange elements into a whole of interdependent parts.
Synonym for Order
Organization’s synonym is “order.” Organization charts illustrate the interrelationships among a company’s personnel. This is often where problems develop.
Organization structuring should establish the best way to operate the company and then fit the people into the positions, not the other way around.
The big question is, do you have the right structure in place to move your company forward over the next 12 months? Have you ever felt like you and/or your company needs to be more organized?
Planning is essential for the organization and effective operation of a company. It helps create a conduit for action. When actual results vary from planned results, management must correct this deviation.
Therefore the first step is to know your mission, formulate goals and objectives, and determine how you’re going to measure results. This is a thinking strategy. Does your firm spend the requisite time thinking about where it’s going and how it’s going to get there?
Right People in the Right Roles
The second step is to make sure you have the right people in the right roles. Since an organization performs based on the quality of its people, this is a critical step.
The Gallup organization found that the number one key to being a successful manager is hiring for talent. (They interviewed over 80,000 managers in 400 companies.) Gallup places 34 talents into four categories: executing, influencing, relationship-building, and strategic thinking. Think about which of these talent areas are central for each role in your firm.
Key design decisions include how you will divide up the required labor, how you will delegate authority, departmentalization, and span of control.
Emergent designs for highly competitive firms today rely less on traditional types of organizational structures (functional, product/service based, customer or geographical area based, business process teams, and matrix) because they want to retain adaptability and responsiveness. New designs are highly delayered, technologically sophisticated, and highly customer-oriented. (Davis and Weckler)
A Need for More Effective Organization
I present to you several situations that indicate a need for more effective organization:
- Lack of effective action
- Unequal workloads
- Poor communication
- No goals
- High employee turnover
- Poor profits
- Poor decision-making
- Poor delegation
- Lack of motivation and inspiration
- Non-compliance with company policy and/or procedures.
One of the main benefits of an effective organizational structure is more satisfied employees. Employees want clarity in their roles, are willing to accept responsibility, and are happy when they see how their work relates to that of other employees. They prefer to have only one person to whom they are directly responsible. Here are some other benefits:
- Increased profit
- Clear direction
- Better training
- Effective performance evaluations
- More creativity
- Knowing you’re following sound principles of management
- Employee growth and learning.
Take Advantage of All Assets
You deserve to have a well-designed company that leverages all its assets, generates the highest profits, and fosters meaningful work for its employees.
Take a deep look at your company and see if it needs some tweaking or even a major overhaul. The only constant in business today is change. Regularly reviewing how your company is structured and designed can pay a high return on the time and effort invested.
If you have any questions, please call me at 949.338.7141 (leave a message if I don’t answer) or email me at jvcastiglia@icloud.com.
Jim Castiglia is the founder of Business Street Fighter Consulting, supporting entrepreneurial business owners in their desire to grow and maximize the value of their businesses. You can reach him at email, jvcastiglia@icloud.com, or text me at 949.338.7141.
