8 Steps to Check Is Your Organizational Structure Up To Date

Do you have the organizational structure of your small business? If you don’t have one, start building one.

When it comes to small businesses, the structure is often ignored because entrepreneurs think that the business is small and there is no need for structure. Even with three employees, small businesses also need a structure, especially because every business has functions.

You cannot find a business without functions because there will always be sales, customer support, accounting, manufacturing, marketing, etc.

Regarding these issues, the difference between large and small businesses is that big businesses have more human resources. In contrast, in small businesses, because of fewer resources, there is overlapping of functions. Thus, you can find the same person responsible for finance, sales, and supply management in small businesses.

Why You Need the Organizational Structure?

The organizational structure not only serves to determine positions among people in the business but also affects communication and the effectiveness of various business functions.

Because of that, it is helpful for you as an entrepreneur to make a chart of your structure. It is much easier to find “bottlenecks” that may happen as obstacles to future business development with such a chart.

Organizational Structure
Organizational Structure

Over time, there are changing circumstances in which such an organizational structure survives. Business is an alive organizational system subject to constant restructuring, such as cutting costs, increasing productivity, efficiency, effectiveness, etc. Any change affects the structure. Maybe some small changes don’t have drastic effects. Still, more such small changes with small intensity for a more extended period can significantly impact the functionality of the structure.

Because of everything mentioned above, your structure must be a part of the change process. At a specific time, you will need to take the following steps:

Make a list of all changes in the analyzed time that you have made in your business. What impact do these changes have on each function in your business?

2. Note all changes in your organizational chart

On the organizational chart, insert all the changes and their impact and possible changes in the relations between functions.

3. Add people responsible

On the same chart, add the names of people responsible for each of the functions. If there are overlaps (which for a small business is not uncommon), state that there is overlapping.

4. Define all questions for discussion on improvement of your organizational structure

Prepare possible questions for discussion with any person responsible for each function that needs to highlight their problems.

5. Organize a meeting with all those persons.

For each person, take the 30 minutes special meeting face to face to discuss possible questions from the previous step. Insist on proposals for solutions to problems to be proposed from their side, not yours. If you can not receive possible solutions at that meeting, be patient, give them time, but restrict them to finish sooner. Ideally, allow them to 2-3 business days for thinking and giving suggestions.

6. Collect suggestions

Collect all the suggestions and propose your suggestions about the problems consistent with your business vision and overall business goals. Organize a joint meeting to discuss all proposals. This meeting must produce common solutions acceptable for each team member and bring your small business’s new breath.

7. Make a new organizational structure

After you gather all the ideas and discussions, make a chart of the new organizational structure with each person’s responsibilities and links between them. Call them again at the meeting and present him the new proposal – the new structure. At the same meeting, determine responsible persons for the implementation of this structure.

8. Track and improve

You must follow the implementation and everywhere where there was a possibility of improvement, do not hesitate to improve. This is a cycle of continuous improvement.

Dragan Sutevski

Posted by Dragan Sutevski

Dragan Sutevski is a founder and CEO of Sutevski Consulting, creating business excellence through innovative thinking. Get more from Dragan on Twitter. Contact Dragan