We’ve all heard the saying, ‘Get the right people on the bus” when talking about organisational structure and human resource management. It also implies getting the wrong people off the bus, and the right people in the right seats, which is a lot to consider when you think about it!
Unfortunately ‘The Bus’ itself is rarely discussed. Maybe your business isn’t like a bus at all, maybe it’s more like a two-seater jet boat or a train with multiple carriages, a great driver, and a conductor connecting all passengers.
Getting the right structure for your business will allow your revenue to increase without creating bottlenecks, overloading team members, or causing errors or mistakes. Bottom line returns should increase at a rate greater than the revenue increase as the business becomes more efficient and achieves economies of scale.
Your organisational structure shows the areas in your business, who is responsible for what (whether they’re employees or external contractors), and how everyone communicates or is connected. We call this the ‘10 Hats Organisational Structure’.
When you implement a ’10 Hats Organisational Structure’, the functions you identify typically include:
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Shareholder.
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Director.
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Leadership.
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Product / Service Development.
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Operations.
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Marketing.
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Sales.
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Finance.
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HR.
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Admin / IT.
There should be only one leader of the business and (if you do have a bus!) one leader for each of the 10 departments. In New Zealand, the vast majority of our businesses are much smaller than this so we have people wearing multiple hats but the structure is still important.
From this clear structure, we can then ensure that each role has a clear job description with no more than 10 key responsibilities. Each key responsibility should have clear tasks and KPIs flowing from it.
Remember that nobody can manage more than five people effectively, so create teams within each department (each with a team leader). And make sure that there are ‘team members-in-training’ to start wearing some of the hats that the business owner is currently wearing.
Review your structure regularly and update the key responsibilities if they change. In other words, keep your structure as a living and breathing document that your team understands.
It is important to check in with your team regularly to ensure that what they’re doing aligns with your structure. Ask whether there have been any changes in the team member’s role at each performance review. Then make sure they are the right person to be doing those new tasks or re-assign them to the correct person.
Valuing the opinions and contributions of your entire team is hugely important. However, having a clear hierarchy is the key to avoiding bottlenecks, making smart and consistent decisions, and managing risk as your business grows.
It also provides clarity for the team and an opportunity for advancement.
To get help with creating and establishing your ’10 Hats Organisational Structure’ ask us about a one-one-coaching session or register for our upcoming half-day seminar on this topic by emailing victoria@kgaww.co.nz
