An excerpt from the e-book, “Moving From Chaos to Growth: The 7 Elements that Fuel Fast-Track Expansion and Profitability.”
This blog series examines the 7 elements that fuel fast-track expansion and profitability, each of which is absolutely necessary in today’s competitive and evolving business landscape. When thoughtfully designed and faithfully implemented, these 7 elements allow a business owner to set the long-term vision of the business, define roles and responsibilities throughout the ranks and as a result, practically enable the business to operate by itself.
In this blog, we examine the second element: Structure.
“Unless you try to do something beyond what you have already mastered, you will never grow.” ~ RALPH WALDO EMERSON
Many business owners and executives lead their organizations by tasking their employees (i.e., “You do this, you do that”) daily, hourly, or even at a task level. As an organization grows, it eventually reaches a point where the leader no longer can regularly interact with employees and supervise them based on their assigned tasks (this often happens when employee ranks approach the 20-30 range, or a 20-1 reporting relationship). Chaos ensues if the employee is used to being “tasked” by the owner or executive. To continue scaling the business, the leader must change the organizational structure in a way that effectively and efficiently serves customers and guides employees without the owner having to supervise everything on a daily basis. Addressing this threshold is critical to enabling ongoing growth of the business.
Efficiently organizing the business to scale with volume is critical to gazelles. Quite often, it becomes one of the first major barriers to growth. Addressing what resources are required, and empowering them to act independently (with some autonomy) while also controlling costs are critical to scaling any business.
Structure manifests itself in organization models, reporting relationships, job descriptions, policies and procedures and feedback mechanisms.
Structure is about organizing multiple employees in a model that drives efficiency (i.e., extra resources drive additional costs). It enables everyone to know what they and everyone else are supposed to do, and it helps business owners more efficiently hire the right resources, develop them, promote them and if necessary, terminate them.
In his book, “Good to Great,” Jim Collins coined the term “Get the right people on the bus.” In other words, Jim challenges business owners to focus on hiring well and then placing those hires in positions where they can thrive and succeed. That said, great structures account not only for what someone does well, but also how they interact with others around them.