As a business advisor, I have the opportunity to work on a daily basis with great business owners and executives who share with me their significant leadership challenges.

In my experience, their most common challenges revolve around organizational roles and responsibilities. Inevitably, we spend considerable time discussing communication (or the lack thereof) and the frustrations they have as to why employees are not “doing what they are supposed to be doing.” This leads me to what is, in my mind, an obvious question: “Have you created an appropriate organizational structure and shared that information with everyone in the company?”

The importance of organizational structure to any business, regardless of its size, is something that every business owner and leader must accept and understand. Without establishing a solid organizational structure, how can anyone expect their employees to successfully perform their duties and responsibilities?

While the term “organizational structure” encompasses a wide range of components, I want to focus on one key element that many times gets lost in the day-to-day grind of attempting to run a successful business. That element is the sometimes-dreaded organizational chart.

Simply stated: A business requires structure to grow and be profitable. Creating and updating your organizational chart on an ongoing basis is critical. Without this fundamental aspect of organizational structure, I assure you that your business will either accomplish very little or, worse yet, fail. On the other hand, there are many benefits to an organizational chart that will impact your business in a very powerful way.

The benefits of an organizational chart

 Having an accurate and updated organizational chart benefits employees more than many people might realize. The visual communication of information alone is absolutely more effective that just some writing on a piece of paper. Consider some of the benefits of using an organizational chart:

  • The organizational chart will help ensure that the owner and management team have built and designed the company’s structure to meet the objectives of the business, and it will provide a sound structure for effective planning.
  • This visual structure gives employees a strong sense of the established means of individual accountability, and lets them know quickly who they should go to with issues and concerns.
  • Communication becomes more effective between all departments within the organization. All employees are better able to coordinate their efforts and understand what lines of accountability exist within the company.
  • Managers benefit as they become more aware of who is outside the scope of their authority and are less likely to overstep and interfere with another manager’s responsibilities.
  • Task completion is another significant benefit. A well-designed organizational chart facilitates the completion of company projects. For example, it will point you in the right direction as to who may be able to offer assistance if help is needed from a specific department.
  • An organizational chart will show employees what growth opportunities they may have beyond their current positions.
  • Cooperation and a sense of pride among members of the organization increase when the connection between individuals is more clearly seen.

Overall, an organizational chart will benefit your company no matter its size. From helping managers effectively oversee their teams to creating a culture of transparency, the end result is an organization capable of being efficient and, ultimately, profitable.

Scott Tackett joined Violand Management Associates (VMA) with a 32-year background in manufacturing, human resource management and organizational leadership. He is currently a business development advisor for VMA where he works closely with business owners and their key management staff as both a business consultant and an executive coach. To learn more about VMA’s services and programs visit Violand.com or call (330)966-0700.