Basic Business Cents
The organization chart is a diagram of the reporting relationships of employees and defines the chain of command. The typical org chart shows the top executive at the top of the diagram with direct reports in a row below, followed by the next layer of reporting relationship and so forth with the first line of employees at the bottom layer. This is referred to as a vertical or top down organization. It implies that decisions are made above and no matter where you are in the chart you do as you are told by the person above. Communication is hampered by layers of management who buffer communication by passing on what they deem necessary or what is to their advantage.
Many organizations today prefer a horizontal or systems view org chart. This chart also starts with the top executive at the top but horizontal lines of key processes of the organization. An example might be product A portrayed across the chart from suppliers to design, assembly, inspection, distribution and marketing. Products B, C. etc. would be in lines under product A. The reporting relationship would then be the product managers to the top executive.
As more is learned, thoughts on the proper org chart change. A more complete chart is the Interactive Organization Chart that depicts key functions as shown below. The Top Executive title is replaced by Leadership, recognition is given to the office of Strategy, Process includes the horizontal layers of the horizontal structure listed above, Marketing is recognized as a key process, and the importance of organizational culture is portrayed as an equal department.
Leadership means defining the aim or vision of the view of the organization at some point in the future and then modeling the way to achieve it.
© Louis E. Schultz
Strategy embodies responsibility for strategy planning, acceptance by the entire organization, deployment throughout the organization, and completion.
Culture may be the most important element and is overlooked by most organizations. Today’s Human Resources Manager or Personnel Manager is saddled with a thankless task, driving the periodic employee reviews. Employees don’t like them and managers really don’t like giving them. They are thought necessary because many managers do not provide performance feedback to employees in real- time as they should so this process was created to force feedback, at least once a year. Now this office has something meaningful and challenging. Leadership might provide direction but Culture drives the organization. Elements of this position include communication, understand and acceptance of direction, explanation of “why”, listening, working conditions, happiness, and satisfaction of the workforce. A job performed well by this office will be reflected in employees who are self- motivated, enthusiastic, inspired, and compelled to achieve the aim of Leadership.
As you can see, none of the functions can stand alone. Silos with moats around them will not be acceptable or useful, each function must interact with other functions yet each has a definite area of responsibility. By working together as a team in this model, success is more likely to be achieved.
© Louis E. Schultz