STRUCTURE

Happy New Year! I hope you have had a relaxing break, and for those of you who worked through, I hope it was rewarding, and that a period of R&R is imminent.
 
​This month we will start to look at the fourth (of four) primary management practices you need to excel at, in order to succeed in business – Structure.
 
An organisation is called an organisation because it is supposed to be organised. Its structure is simply the formal model used to explain how it is organised. The ‘wiring diagram’ is the last step in the process, not the first. So, if you want to structure your business, you should first of all organise the work that needs to be done.
 
This in turn involves understanding work. Jobs are for achieving outputs. The first step in organising work is to list down all the outputs that you need to be achieved. For example:

• Meet or exceed the sales target
• Ensure the sales team is well trained and motivated
• Ensure all orders are boxed up and delivered
• Help to make sure the business is well informed about trends in its industry and marketplace

 
The next task is to group all the outputs that are related to each other into a function. For example, the above outputs might be grouped together in a sales department. Once you have got all the outputs grouped into functions, you can estimate how many people are needed in each of those functions.
 
Next, for each function where this is more than one person, decide if they should all report to you, or if one of them should manage the others. As a rule of thumb, I recommend you avoid directly managing more than 6-7 people.
 
Here are some useful guidelines for structuring your business:

• Clarity. Make sure everybody knows what they are accountable for.
• Simplicity. Make your business easy to work in, and easy to work with.
• Efficiency. Make sure the minimum number of people get involved in each activity.
• Strategy. Make your structure support your strategy. If outstanding customer service is a critical part of your strategy, have customer service report directly to you.

 
It is quite mind-bending how convoluted big corporates can get with their structure, to zero benefit for anyone except the managers who ‘win’ the latest round of restructuring. Don’t let this happen to you, let common sense rule the day. More on structure next month.