Does your company have an organisational chart that looks a little like an elaborate Ponzi scheme? Other than ensuring it contains everyone’s name it doesn’t really seem to make much sense to anyone internally or externally trying to determine how your business operates?
Here is some free advice - throw it out, now. We have developed a much better way of thinking about the organisational structure of your business. One that will dramatically steady the peak and trough cycles of the various stages of business growth and when done will enable you to double the value of your business in three years.
There are three steps of development, each building on the last, that when combined and managed will structure your business for rapid and consistent growth.
They are:
1. Organise Three Pillars of Resources
2. Get Business Fit – Objectives and Strategy to Forecast and Budgets
3. Optimise Growth – Targets and Tactics to Measures and Metrics
Strategists will tell you that “Structure follows Strategy”, or until you know where your business is going (objectives) and have identified the main pathways to get there (strategies) there is little point in establishing a corporate structure. However, in its most fundamental form your business has three overarching pillars of resource that form the core of all businesses.
You sell
From buying a well-defined product to a contracted service and the breadth of combinations between them. If you are not selling something, then you are simply not in business.
You deliver
Once you have sold it, you then need to deliver it.
You collect cash [for it]
Once it is delivered you can typically invoice and collect payment. Depending upon the product you sell and your business model, you may be able to collect cash at the time of sale or even in advance of sale.
This most basic representation of the pillars or divisions of resources within your business can be seen in the diagram below.
To grow your business, you Sell more, Deliver more and Collect more Cash over and over again, increasingly making this process repeatable and scalable. This is the most basic process flow across your organisations and the simplest way to represent your organisation structure to your team. Rather than a point on a traditional Organisation Chart, staff will intuitively appreciate that their role is part of a flow and their job is to complete tasks to the point where they can hand over to the next pillar of resource. The conversations between the teams regarding handover and the understanding of who does what is enhanced. In this way it also becomes easier for management to look across the team and ensure they appreciate who is accountable for completion of certain tasks.
Equally within a pillar of labour this same process flow methodology can be used. If we look at the Sell division we can easily break it up into Marketing and Sales, and while these functions can be different in different businesses, Marketing could be considered accountable for generating awareness in the general market place through to lead generation for the Sales function. Sales then take the leads, convert them to opportunities, work through the Sales dynamics with the end result being wins to hand off to Delivery. Importantly while each of the individuals understand the inputs and outputs they are accountable for delivering, they also understand that they are all responsible for the handover to Delivery so where necessary they help out.
Part 2 coming Tuesday July 2 2019.
CFO Evolve provides exceptional part-time CFOs, passionately building great businesses through financial and strategic insights. Contact us if you think that we can assist with your business growth.
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