Published December 18, 2006

Business Organization Chart Problems & Solutions!

I just attended a 3-day weekend training and planning session with a company I am consulting for. Although the scope of my project is in the business development capacity, and I participated in the Friday sessions, I was interested in seeing some of their other sectors in action, which is why I attended the entire 3-day session. Of particular interest to me was how they were handling the 1000% growth they have enjoyed in the past twelve months, particularly the reporting problems it had created. Yes, you read that right, 1000% growth.

They just started last year and one year later they are coming to grips with becoming a fairly key player in their marketplace. They have long term contracts with major companies and a solid staff. Although I generally get concerned about extreme growth in the short term, my initial opinion is that this is solid and has a long term potential and they are handling it as well as can be expected.

But it's not without its problems. Specifically, some people related frustration during the meetings that they were answering to several bosses. A year ago there was one key decision maker and a distinct chain of command. Today it's more like a spider web of command and there are several bosses in a confusing matrix. One person had to answer to four people! Most people "only" had 2 bosses to answer to.

Why does this happen? Growth is not an easily scalable linear progression. All too often, businesses with this kind of growth are creating workarounds for current resource limitations because transferring resources to a scale-appropriate resource would be more costly and time consuming than simply creating the necessary "patches." This particular company and others I've seen as well have added patches on other aspects of their organization because of super-charged growth. Soon it becomes patches on patches as staff get hired quickly to plug holes. And before you know it, as this company discovered, many staff members were confused about what they were doing and what role they played in the company. One person, just hired, was asked what he was hired for and he said he didn't know. With a varied background, he couldn't point to one skill-set to say that he was definitively hired for that reason. When the COO was asked why this person was hired, the response was, "We're finding a place for him."

That's part of what this meeting was meant to accomplish and for the most part they did a fair job of working through their challenges.

Extreme growth is part of many entrepreneurs' dreams. And why shouldn't it be?!? However, it's not the problem-free brass ring that many business owners assume it will be. In fact, it is fraught with problems and this company is fairly fortunate that it enjoyed growth and COULD function reasonably well with patches upon patches upon patches.

My advice? Plan for extreme growth. When it happens, do you know what you should do? Thinking about it now, before you enjoy massive growth, will help you in the future. Why not take a moment and create a "future-positive" organizational chart that thinks optimistically about the future. You'll be prepared, then, when the big time arrives.