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:
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:
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.
Let's Talk Business
by Chris Bunce
Chris has 28 years’ experience as a management consultant and business coach. During this time he has worked with clients in many industries and of all shapes and sizes, including some in Australia, Asia and the US. Nowadays he is passionate about improving the lives of Aucklanders by helping business owners to master the very few management practices that actually make a difference to their success. Chris lives in Blockhouse Bay with his wife, Cathie, having lived in or around the area for most of his life.