According to the article “5 Tips to Consider When Designing (or Redesigning) Your Organizational Structure” by contributor Bill Boebel on www.entrepreneur.com, whether you are starting a new business or you need to undergo reorganization due to changing market conditions or company growth, you need to examine your organizational structure regularly. Boebel notes that nearly half of CEOs start a company reorganization within their first two years of business. As such, here are some tips to help with this process:

  • Draft a list of tasks. While you might be inclined to think of people first, you need to start by considering what jobs said people would even have. You can figure out the jobs that require hired hands and their areas of responsibility by analyzing and identifying customer needs. Doing so will also help you determine your company’s needs.
  • Look at your staff. Before going further, you’ll need to pull out (or create) an up-to-date organizational chart. Look at who you currently employ, and don’t pay attention solely to job titles. Focus on the various roles and capabilities your staff members perform, and then determine how many of the tasks that you identified in step one can be filled by existing employees. It’s perfectly acceptable to move people around or split the responsibilities of a role or project between multiple people. After you’ve looked at who you have, determine how many tasks require you to hire new help.
  • Identify the types of managers in the organization. According to a Gallup study, one of the most important decisions a company makes concerns whom it appoints as managers. However, that same study also indicated that, 82 percent of the time, companies fail to hire the right people for managerial positions. As you consider who will help lead your company, identify who are “people managers” — those who work best leading teams — and those who are “work managers” — those who are more adept at overseeing tasks. During this time, you may find you have managers who need just a little bit of polishing to reach their fullest potential. Identify both effective and potential managers, and then determine where they would be most beneficial in your organizational hierarchy.
  • Assign titles based on future growth. Many companies that start scaling end up assigning titles like “chief” and “vice president” too early. For people who have these high-ranking titles, it can be difficult one day to hire above them as the company grows and demands more leadership. That said, if the current job responsibilities and qualifications warrant it, there’s no problem with assigning such titles from the start. Just keep in mind that it’s also important to assign titles to allow for proper career paths and growth opportunities.
  • Consider the scope of control. Something else you’ll need to think about is the number of direct reports for each of your people managers. Modern organizational structures and technology allow managers to oversee a larger number of people than in the past, but remember not to overload them with an impractical number of direct reports. The increased complexity of businesses today makes the situation ripe for an increase in administrative tasks and meetings and a decline in productivity for your leaders. While evaluating your leaders’ management styles and spans of control, create a visual organizational chart to help you pay attention to both work-related tasks and human factors.

Related: Wash Wisdom: 5 management mistakes to avoid

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