The 5 Vital Components of a System; Component: #2 The Organizational Chart

If you understand and apply the following components, you can systematize just about anything. Assembling these five components creates the ultimate system. I believe these five components will work for any type of business or organization:
1. The Mission
2. The Organizational Chart
3. Policies
4. Procedures
5. Job Descriptions

Owning your own business can be overwhelming because of the number
of “hats” you have to wear. Someone not only has to do the technical work
of the business, but someone has to market, someone has to go on sales calls, someone has to do the bookkeeping, someone has to order supplies, someone has to fix the equipment, and the list goes on. If you are a larger company and you have people actually doing some of these things, you are most likely overwhelmed as you try to manage them and end up being involved in many things that you don’t want to be involved in (and probably shouldn’t be).

You are involved in too many areas because you haven’t learned the skill
of leadership and systems. How do you ever get past this? You need a vision.
A road map—a clear picture of the business. A great tool is an organizational chart.

An organizational chart for most companies looks like this:

No wonder you’re overwhelmed! You’re in every box!

So how do you get organized? You begin by understanding the 12 vital
functions of the business. Every one of these functions is vital to becoming
phenomenally successful in your business. And if you want a turnkey business, all of them are absolutely crucial.

Does someone have to plan the business to be more successful? You
bet. Tat’s the role of the person I call the Director. Does someone have to
manage the business? Absolutely. Someone must make sure that all of the
things that are supposed to happen actually get implemented. I call that
person the Manager.

And, of course, someone has to actually do the work of the business.
The good news is that it doesn’t always have to be you. And men, your wife
is not the only one who can answer the phone and do the books. She needs
a life, too.

Understanding the three levels of leadership (directing, managing, and
doing) gives you a picture of how to separate and organize the major functions. Ten there are what I call the Four Pillars of a Phenomenally Successful Business: Marketing (everything you do to attract prospects to your business), Sales (everything you do to convert the prospect into paying customer), Operations (everything you do to service your client), and Administration (everything you do to track results). 

How to Use the Organizational Chart
1. Directing is casting the vision for the company, planning, and
leading the managers. The director knows what the end result
looks like.
2. Managing ensures that the wishes of the director are carried out.
Tis involves training, supervising, reporting, and overseeing
3. Doing is implementing the work to be done.

To grow effectively, begin replacing yourself in the “doing” area on the
bottom row first. As a business owner, your time is worth more than $15 per hour. When you begin to grow, replace yourself in those areas first. Start with the area you are not good at. Stay in your strength zone.

For example, if you’re good at marketing but hate bookkeeping, the
Administration area is probably suffering. Get a clerk or a bookkeeper who
can help in that area. Or perhaps you don’t like doing the technical work
of the business (or that is the most overwhelming, time consuming area for
you). Put someone in place to do the basic parts of Operations so you can
focus on Marketing, Sales, and Administration.

When I started my first company out of the trunk of my car, my name
was in every box just like this chart. Of course at that time I didn’t even
know there were boxes! Eventually I hired an operations assistant. Ten I
hired a couple of operations technicians. Ten I hired people to answer the
phone (inside sales), to send out newsletters and marketing materials, and to do data entry (Administration). I hired a bookkeeper. I did the marketing
and outside sales.

Later on I merged with a couple of other small business owners and put
one in charge of Operations and the other in charge of Administration. We
then hired more people to do inside sales and on-location sales. Eventually, I hired someone to do marketing with me and then for me.

Finally I was only in two boxes—Marketing Director and Sales Director.
Today my business is turnkey. Although I meet with my staff once a week
and we work on projects, I don’t really have a “job” in that business other
than the responsibility of owning the business.

Once you fill the bottom boxes, you can move to the middle boxes. In
fact, it doesn’t even have to be that clean. You may still be “doing” some of
the work while having managers in other areas. For example, as I write this
book, I am “doing” work “in” the business. At the time of this writing, I
present workshops, seminars, and do some coaching and consulting in addition to writing, but I have an Operations Manager, a Marketing Manager, Sales Manager, and an Administration Manager.

Although I’m doing some work “in” the business, it is strategic work that
I enjoy doing—work that reaps big rewards. However, if at any point I want
to stop doing any part of what I do “in” the business, I can. When you build
it with systems in mind, you create something that can survive and thrive
beyond you.

Excerpt From; The 5 Secrets of a Phenomenal Business by Howard Partridge.