America’s Leadership Expert : Stay Organized
Clay: This is Clay Stairs America’s Leadership Expert with Tulsa Business Leadership with podcast number 27, the Levels of an Organizational Chart. Oh man, as the leader of Clay Stairs Tulsa Business Leadership, I get to spend time with entrepreneurs and business leaders and managers. One of the very first things that I ask them when they are struggling with their company is, “Tell me a little bit about the people and how your organization is structured?”
One hundred percent of the time if this business leader has six people in their company or if they have three people in their company or if they have fifteen people in their company, what they will do is they will draw and organizational chart that will have the same number of boxes as they do people. Because what they have done is they have organized their company around people.
Again, I don’t know that that’s necessarily wrong, but at Clay Stairs America’s Leadership Expert Tulsa Business Leadership my focus is to create an organizational chart for my clients that is based upon the responsibilities rather than just on the numbers of people.
What I do, an example of this would be not too long ago one of the companies that I own I hired my very first employee in this company in this particular company. It was going to be he and I in this company. I can tell as we were walking through the interview process that just based on the things that he was saying, I could tell that his picture was that it was going to be him and me, two people. When he got the picture of how this business was going to be organized it was going to be he and I locking arms, doing this thing together and he was going to be my right hand guy. I could tell just by the way he was talking.
I really quickly picked up on that and then I said, “Okay well let me show you the organizational chart of this company.” Again, this is something I do all the time as Clay Stairs America’s Leadership Expert Tulsa Business Leadership with leaders and business owners. Is helping them see or helping them organize their company based on responsibility rather than based on people. So I pulled out the organizational chart for this company and on this chart there were 34 boxes, and of those 34 boxes then I was able to talk to this new employee, who was my very first employee. I was able to come all the way down to the bottom left of that organization chart and say, “Here’s where you fit. Here’s the box that you are going to fill.”
Immediately you could see the light go off inside of his head. He’s going, “Oh I thought it was going to be Clay and I arm in arm through thick and thin, that I would be his right hand guy.” But now he sees that he is actually fulfilling a function or he is fulfilling a responsibility. This is very key for a business owner to know. To organize your organizational chart according to the responsibility not just according to the people.
If you’re struggling with what is an organizational chart and what does that thing look like? I want to encourage you to take a look at the book by Gerber, Michael Gerber called The E Myth. Or also look at the book called Traction by Gino Wickman. Both of them spend time and have some great tools on your organizational chart. Wickman in Traction calls it his responsibility or accountability chart as well. I love that name as well.
The idea here is at the very very top of your organizational chart, America’s Leadership Expert that’s where you have your visionary. It could be the owner of the company but this is the person that carries the vision. Then if you come one level down the next box below the visionary is the integrator. This is so important that there is a person, a manager that is able to take the vision and put it into application. One of the things I say quite often is, “Vision without application is simply hallucination.” You have to apply the vision. You have to put it … You have to implement the vision or else you will never get to traction.
We have the visionary at the top, the next person down is the integrator. America’s Leadership Expert Then from there we break into three different categories. There’s three boxes that come off, and usually what I have is over on the far left, is where I have the sales and marketing. That would be the sales and marketing VP, or the sales and marketing director. Because this whole column now, everything below sales and marketing is going to be responsible for business coming into your company. Everything that needs to be done to bring business in is going to be in that column.
Then we come to the center column of your organizational chart and this is all of the operations. This is like your CEO or COO or it’s your VP of operations. In the center column this is where all of the production, the facilities, the customer service, it’s where the business actually takes place. It’s how you are providing your product or your service to your customers. Then over on the far right we have the admin. This would be your COA or the CEA. The person that is in charge of all the admin. This is where your HR goes. It’s where your finance goes. The accounts payable, accounts receivable, the HR. Everything goes over in that column.
Once again, when I pulled out this chart and had 34 different boxes on it, what I was showing to this employee was right now I am doing 34 different responsibilities. I am having to cover all of these responsibilities and I’m at a point where I don’t want to cover all 34 responsibilities so I’m hiring you. I’m going to hire you down here at the very bottom to begin with some of these smallest responsibilities, and all of the sudden this employee that I was looking to hire could see where they fit. They could see in a glance … They could see where they fit in the company.
I promise you, if you don’t tell people, if you don’t show them a picture of where they fit it will not be long at all before they make an emotional decision that they should be making more money because of how important they are to the company. They can put in two or three hard weeks of work and they will make an emotional decision that, “You know, I’m working really hard, I think they should be paying me more money.” They will make emotional decisions because they don’t see the practical picture of where they fit.
This new employee has now been working with me for three weeks and I had an opportunity to talk with him just a couple days ago. He brought up to me already, “You know Clay, so at what point do we talk about a raise?” First of all you’re going, “Oh dude, this is not what you want to be talking about in the first three weeks.” But once again I could see that he saw the wrong picture. What he was thinking, what he was seeing simply from that question, he was seeing that he was doing a good job and if he keeps doing a good job the way he is doing a good job, at some point I should give him more money for doing the same good job.
Once again I brought him to the organizational chart and I said, “Let’s take a look, where do you fit again?” That’s right, he pointed down at the bottom left. And at Clay Stairs America’s Leadership Expert Tulsa Business Leadership this is one of the key tools that I give to leaders, to my clients that are leaders and business owners and entrepreneurs, is how to respond to an employees request for a raise or an employees request for some type of a bonus. Or, “I’d like to have more responsibility.”
I ask him, “Now where do you fit on the org chart?” And he went all the way to the bottom left and he said, “I fit right here.” I go, “That’s exactly right.” I want you to know that that box pays this amount. Whether you are here for three weeks or whether your are here for three years, this box pays this amount. If you want to make more money, if you want to gain bonuses, then you need to be looking at adding boxes. Getting your name into more and more boxes. So please don’t think that you can come in and do a good job for three weeks or for three months and then anticipate or expect a raise simply for doing the same good job.
If you want a raise, if you want a promotion, if you want more of an opportunity for bonuses, America’s Leadership Expert you need to get your name in more boxes. What this does immediately is it produces and creates a growth path for my employees. They can begin to look across the organization chart and pick and choose what boxes do I want to get my name in? What boxes do I want to aspire to? What do I want to grow to? It creates in their mind as well as in my company a growth path for each one of my employees, so they can begin to see that, “You know, I could be in this company for a long time. This company has the capacity to allow me to grow. This company actually has the path of growth waiting for me if I can just continue to fill a box, come in and completely fill a box and then begin to expand into new boxes.”
It is a beautiful tool that you can use to resolve any misunderstandings when people come in. They get a little too big for their britches. I’ve had that. I’ve owned companies for the past five years and as a leader in business as Tulsa Business Leadership, I’ve been doing this for the past 25 years and it is so common for people to feel like they have gotten to a place where they are bigger than their actual position, and because they are bigger they should have more authority and they should be able to boss people around more than they are because they’ve been here longer.
“I should be getting more money because I’ve been here longer.” “I should have more respect because I’ve been here longer.” “I should be able to have more perks because I’ve been here longer.” When really it has nothing to do with the amount of time you’ve been with the company. It has everything to do with the box that you are filling. The box of responsibility that you are filling.
Once again, this is Clay Stairs America’s Leadership Expert with Tulsa Business Leadership podcast number 27, talking about our organizational chart or our responsibility chart.