When you’re growing and want to go to the next level, having the Right People isn’t enough. You also have to have the Right Structure! As stated in my previous blog, How FIT is your Business Body, when you’re a small company, getting the right talent (People) is important. But as you get bigger, functional structure becomes more important to establish clear lines of roles and accountabilities.
The same people and structure that got you where you are now isn’t necessarily the same people and structure that’s going to take you to the next level. This is the first article of a 3-part series in Infrastructure. I’ll focus on Functional Structure in this article as part of this formula:
Infrastructure = Functional Structure + Incentives + Tools (FIT)
“It’s Complicated!”
Have you ever had to explain your company structure to someone and they look back at you confused, finally admitting, “I know, it’s complicated!” It’s usually because we’ve created roles and reporting structures that don’t make sense to accommodate the weaknesses or gaps in our talent needs. We have an employee that fits our culture but can’t perform in their designated seat, so we add people or responsibilities to others to mitigate that employee’s shortfalls. Or we really want to keep them but we don’t have a seat. So we create a seat for them that we believe might add value to the company . . . or maybe not. Or worst, they are an owner (or family of the owner) and we create a bogus position so they can feel like they’re contributing even though their talents don’t match the needs of the company.
Sound familiar? All of these issue-dodging attempts result in less profit, frustrated employees, and disruptions in serving your clients in the best way possible. It creates a very unhealthy environment where you, as the leader, are losing credibility the longer you avoid the issue.
Clear Accountabilities
When I start a new EOS client, I always start with The Accountability Chart. This exercise forces them to think what is the best structure for the greater good of the organization to take them to the next level. It requires the leadership team to let go of their current roles, egos, and personal motives. It is one of the hardest things to do in the EOS process to ensure that the team is setting themselves up for success with clear accountabilities, regardless of who’s in the seat. We say, “Structure first, people second”.
This is easier said than done! During this exercise, you will always try to go back to history and think “this is how we’re doing it now” or “well, [insert name], does it this way” or “I don’t think [insert name] can do that”. It doesn’t matter! I know it’s hard because we’re talking about people who are in the very same room. But for the greater good of the company, what should the structure look like to break through the ceiling? If you had the people you needed in the organization, what would your structure look like?
Without the right structure with clear accountabilities, regardless of how big or small your vision is, you will never get there. You can have great people but without a clear Accountability Chart, they may be doomed for failure.
Right Structure – Breakthrough!
Imagine that you had the right Accountability Chart designed for your company. All the functions (seats) are identified throughout the company. And within each function, all of the key roles and responsibilities are clearly defined. Once you have that, then you can focus on getting the right people in these seats that truly are designed with their unique abilities to perform in those seats. Then you would have a high performing team that can take your company to the next level.
How would that look in your organization? What would that do to your bottom line, your client service, and your team health?
What’s Your Structure?
Have you created a structure that creates confusion with no clear accountabilities . . . such that team members are pointing fingers at each other or balls are being dropped? Have you created functions or roles to avoid hard discussions with your team? Are you looking the other way when it comes to poor performance?
Take the first step towards business health and create your Accountability Chart. Work with your leadership team in creating the right structure that will take your company to the next level. Disconnect yourselves from your current roles and personal motives. Fight for the greater good of the organization! Only then will you break through the ceiling!
Take the Organizational Checkup to gauge the health of your company! For more information on creating a healthy business lifestyle, read about the Entrepreneurial Operating System (EOS).
My next blog will be about the second element in Infrastructure –Incentives. Incentives deal with anything that has numbers!
To Your Business Health!