9 Reasons Even Small Business Need an Org Chart

9 Reasons Even Smaller Businesses Need an Org ChartFor any growing organization, deciding the best direction to take is key to success. There are many factors that differentiate large business operations from small business operations, one of them lies in the communication and implementation of a proper organizational structure. A clearly planned org chart works as a clear communication tool for a variety of human resource issues, including managerial authority. It is very important for small business owners to consider having a formal structure right from the beginning as this helps enhance the growth process in the different stages of the evolution of the business.

Many small businesses consider an organizational chart an unimportant, overly formal process, appropriate for large corporations but not for them. Let’s look at 9 reasons even small business need an org chart and explore how one can enhance the clarity of your communications while improving your overall workforce management.

Why organizations need org charts

An org chart helps organizations build and design clear structure

Every business requires a clear structure that will help efficiently channel each employee’s contribution towards the achievement of company objectives. Org charts visually communicate the organizational structure clearly and consistently to every employee helping guide and inform their contributions to team goals.

Org charts aid in the division of functions

Organizations, large or small must perform a variety of functions to meet their objectives. We charge individuals, groups, teams, and departments with one or more of these functions. When we fail to clearly communicate these responsibilities, multiple contributors duplicate efforts or butt heads. This kills productivity and effectiveness. A clear org chart helps delineate responsibilities for more effective implementation.

An org chart defines relationships between employees and functional groups

The relationships between an organization’s employees play a key role in the growth or collapse of the organization. By clearly communicating of how different staff members and groups are related to each other, organizations experience greater growth by avoiding unnecessary conflicts and collisions in the workplace

An org chart helps assess employees’ workloads

It is difficult to evaluate managers without clearly defining their range of responsibility. An effective organizational chart illustrates each manager or director’s span of control, making it easy to assess their workload and determine whether adjustments are in order. This helps decision-makers in the structuring and restructuring of responsibilities across the organization.

An org chart can help determine competency

With functions and responsibilities clearly delineated via org charts, companies and organizations are better able to measure each employees contribution and growth over time. This measure is critical in when it comes to effectively evaluating employees and managing employee growth and advancement for maximum productivity and reduced turnover.

A good org chart enhances coordination within the organization

In most organizations, each individual or group is tasked with specific functions, yet most projects an organization undertakes require cross-functional coordination. A solid org chart helps streamline that coordination to better meet the objectives of the organization. Like a well-oiled machine, each employee is able to focus his/her energy and time on productive tasks.

A solid org chart clearly illustrates who to “loop-in” where the “buck stops”

The org chart enables each employee to identify collaborators, stakeholders and decision makers for any given task or issue. This helps efficiently identify and overcome roadblocks by immediately knowing who to involve when a change in course or decision is needed.

Org charts are good for resource allocation and analysis

Org charts are used to design work teams, carry out budget analysis and generate essential reports for productivity. This allows the organization to manage the available talent and financial resources for enhanced growth and productivity.

Org charts spotlight “holes” in organizational structure

Without the insights an org chart provides, it is more difficult to identify where things are falling through the cracks. With one, functions no one is accountable for are immediately apparent. Managers can then write better job descriptions and requisitions and quickly fill those needs.

An org chart effectively channels contributors to meet the organization’s goals. Ineffective communication makes it difficult for contributors to give their best impacting growth and productivity. A good org chart enables effective resource management. This makes it easier to monitor performance and growth across the organization.