Throughout my entrepreneurial career, I've made a point to learn and implement as many best practices as possible for running a business.

One early "best practice" example is strategic planning.  It was my second year in business and for one reason or another, I felt it was important to create a strategic plan for my company. Not knowing how to go about it, but eager to learn and do it right, I purchased a book to tell me how.

The book was written by one of the best business planning consultants in the industry, and he had lots to share, but I never made it past chapter 4.

The only thing I remember from the book was said at the beginning of that chapter.  It said, "At first there will be very little if any formal planning as the entrepreneur of a small business strives desperately to find customers so that the company can remain solvent."

With only a couple employees at the time, that sentence effectively described the state of my business.  Being so small and so young, it was clear to me that my time and effort shouldn't be focused on strategic planning, but instead on doing whatever it took to keep the business alive and moving forward.  So, I shelved the book for later.

Another "best practice" for business owners is having an organizational chart which visually shows what the structure of the business' personnel looks like, lines of authority, and how each position relates to the others.

Organizational charts (or org charts) are a given with large organizations, being a necessity for managing the complexity, and "bureaucracy", that comes with size, whether the organization is public, private, or nonprofit.

Does this mean that an org chart, like strategic planning, is of little value to very small organizations, especially ones with only a few employees?

Perhaps not!

Not Just for Large Organizations

In order to see the real value of an org chart, and why they are not just for large organizations, let's begin by knocking down a very common misconception: 

Org charts are NOT for organizing people.

They're for organizing "positions" within an organization.

When you look at them from this perspective, it becomes more clear how they can be useful for even the smallest of organizations.

Org charts for large and small businesses have many of the same positions, or "boxes", like accounting, human resources, sales, marketing, and operations.  All essential elements of every business.

The primary difference is that large businesses often have one person per position or box, and even whole departments of people, whereas small businesses have the same person filling multiple positions, so their name is in multiple boxes.

For Freedom Focused businesses, where the goal is greater freedom for the business owner, the business is not at the Freedom to Exit level of freedom until the owner's name is almost exclusively in the top box on the chart, where they work primarily ON the business rather than IN the business.

Almost no small businesses start out with the owner occupying only the top box, so we use an org chart to plan for a future where that IS the case.

Looking Into the Future

Most small business owners have a pretty good idea of where they want their business to go.  Some can imagine only one year into the future, while others can see out three, five or even ten years.

We've found that one of the best ways to capture this vision, and then establish goals to achieve the vision, is to start by building an org chart.

The first version of the chart maps out what the business looks like today, which requires no vision at all.  We simply place a box on the chart for every existing position that is critical to the success of the organization, then fill in a name for the person responsible for the work done by each position.

Of course, as previously mentioned, for the smallest businesses, the owner and other employees will be named in multiple boxes as they wear multiple hats.

With the current state org chart completed, we then start moving boxes around and adding boxes, many with a blank space for a future name, as we map out what the owner envisions the business will look like, typically three to five years into the future.

Once finished, the biggest eye opener, and what gets owners the most excited about the future, is seeing their name in far fewer boxes, which is very intentional for a Freedom Focused business.

Those boxes that do have the owner's name are only the ones that interest them most, and represent their "unique ability", i.e. tasks they love to do, they are truly great at doing, and that give them energy.

For me, this visualization provided hope for a bigger, better future, it felt as if stress was already starting to be relieved, and gave me something to really look forward to.

We then use the org chart to craft a written "future state vision" for the business, with more specific details to describe that future as if it's already happened.

Lastly, working backwards, we establish clear three-year, one-year, and quarterly goals that will make the future state vision and org chart a reality.

Clarity Rather Than Chaos

Once established, the org chart serves many positive purposes for your team.

With every position clearly mapped out in the present day org chart, and names assigned, the chart makes it clear who is responsible for each position, and who to hold accountable for getting that work done.

Absent a written org chart, communication and responsibility can be unclear, leading to mistakes, inefficiencies, and even a bit of chaos.

As businesses grow larger, at 10 to 20 employees the org chart becomes an important tool for helping team members see how they fit into the larger picture. 

It makes clear where opportunities for advancement might be available to them, and shows positions and responsibilities within the company that they may not have been aware of, but are interested in.

While the "future state vision" for the business may get most of the team excited, for other team members, it's the org chart that provides a visual representation of that future that will make it more real for them, and a future they want to be a part of.

Lastly, being tied to the vision and goals for the future, the future state org chart helps every team member know where the organization is headed and how the work they do today, fits in with where the business plans to be in the future.

Freedom Focused Begins with Organizing Your Team

In previous articles, we've described the process for creating a vision and clarifying the core values as essential elements of a Freedom Focused business.

What we may not have made clear is that vision and core values are not created exclusively by the owner.  It's very important that they're created by the owner in collaboration with members of their Leadership Team in order to maximize buy-in, engagement, and create an "ownership thinking" mindset.

Organizing your team using an org chart helps to establish who makes up your "Leadership Team". 

This may be your entire team if less than 10 employees, depending on how you've setup the org chart.  Otherwise, the Leadership Team is comprised of those individuals who play a particularly important role in the success of the organization.

In addition to the vision and core values, once the Leadership Team is organized, they will also collaborate with the owner on the other key elements of a Freedom Focused business, including setting goals to make the vision a reality and establishing and tracking key performance indicators that measure progress towards achieving those goals.

This is how you build a business that operates at the Freedom to Exit level of freedom, where the business owner's name is only in the box at the top of the org chart, and their personal and professional freedom are maximized.

If you're interested in learning how to organize your team, click here to visit our website, and don't forget to always stay...

Focused on your freedom!

Listen to the podcast episode: #020 Maximizing Freedom with a Well Organized Team

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