I’ve been thinking how important is an organizational chart? Is an org chart only for big companies?

Many business consultants and authors suggest that small companies don’t have much hierarchy or many employees and therefore have no need the formality of an org chart. I suppose they are telling us that it isn’t worth the effort. Are they right?

I think I’ll start by looking at some definitions of the term organizational chart.

An organizational chart is a diagram that visually conveys a company’s internal structure by detailing the roles, responsibilities, and relationships between individuals within an entity. It is one way to visualize a bureaucracy. – Organizational Chart Types, Meaning, and How It Works

An organizational chart is a way to display how different employee roles relate to each other within a company. – The Purpose of an Organization Chart

So, it seems that the organizational chart visually describes the roles and responsibilities within a company. But what if I don’t have any employees? Doesn’t that also mean I don’t have a structure? No, I don’t think so. If I was to think about my company in terms of its roles and responsibilities, rather than in terms of its employees, there actually is a structure.

Here’s my org chart. I am the only employee right now. Just mapping the four basic departments (marketing, operations, human resources, and finance) and the work I currently do under each one, I can see that I am stretched very thin. I can also estimate where I spend much of my time.

I can use my org chart to plan for future roles in my business and when I’m ready to bring someone else into the company, I have a tool to decide who to hire. I can track where I spend the most of my time and hire someone to free me up to do other things. Or I can hire an expert to do some of the things that I don’t do very effectively.  

As my company grows and it hires more people, the roles will become more nuanced. I will add other c-suite executives and layers of management to the org chart. At each step I will be able to evaluate the gaps in our team and will add roles and hire accordingly. This might be a smart way to approach my hiring plan. 

Upon reflection, I think that it’s never too early to create an org chart. I think the org chart supports and directs HR decisions and helps to determine first and subsequent hires.

What do you think?

Until tomorrow, GUNG Ho friends!