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HireMyVA Podcast 140- What are the benefits of an organizational chart?

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Episode Summary

Every employee in an organization must share the same commitment to the organization's mission for it to succeed as a whole. To ensure that steps are taken in that regard, they must collaborate as a group.

Organizational charts can be used to show how each person in the organization has a clear line of authority. It lays out a plan for how the task is to be done and the procedure needed to make sure that this information is distributed to the appropriate people throughout the company.

Here are some benefits:
It forces you to think through the structure of what you want to build.
It will help you figure out whom to hire next.
Doing it right will cause you to put a name next to the function, even if it’s your name in every box.
It will clarify who’s responsible for a portion of the “big picture”.
It can show you imbalances in the organization.

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Episode Transcription

Dave Braun
00:00:03
Hey, hello folks. Welcome to the HireMyVA team and business building podcast brought to you by Yoogozi.com. And in this podcast in HireMyVA, we help you to reclaim your freedom through hiring and thriving with Virtual assistance without breaking the bank- that means your bank. and I’m Dave Braun, and I’m here again with Larry Bratton. Who’s my partner in all things, coaching Larry. You’re a great business mentor. I mean, you’ve helped me so much, coaching me in life, you know, and you’re my brother walking through life together. Lots of ups and downs, man. And just tell everybody, hi

Larry Broughton
00:00:40
Everyone. How are you, Dave? It’s great to see you glad you’re back safely from your travels.

Dave Braun
00:00:46
Yeah!

Larry Broughton
00:00:46
Yeah. Good. I’m glad you’re able to get away for a little bit.

Dave Braun
00:00:49
Yeah, just a couple of days. It was. Yeah, it was great. It was awesome.

Larry Broughton
00:00:52
Yeah. Good, good.

Dave Braun
00:00:53
Well, we got a great question. You ready? Okay. What are the benefits? Oh, I guess I should say what episode number this is. This is 140. Okay. Drum roll. What are the benefits of an organizational chart?

Larry Broughton
00:01:11
Mm. An org chart.

Dave Braun
00:01:14
Yep. Good old org chart.

Larry Broughton
00:01:16
Yeah. Yeah. It’s funny, Dave, so many, Let me back up. I see so many startup entrepreneurs, early stage entrepreneurs who don’t have org charts. You know, or why, why the hell would that be? Well, because you tend to do everything anyway. You wear a lot of hats. You’re wearing, you’re doing the sales, you’re doing the operations. You’re doing the fulfillment. You’re doing whatever it is. You’re doing the basic accounting using QuickBooks. So you’re just doing it.

Dave Braun
00:01:45
That’s right. I’ll give you another reason. Another reason is because if you come from the corporate world and you’re like, I’m sick of that corporate stuff. It’s like work chart. Yeah.

Larry Broughton
00:01:56
Yeah. Well, there’s reason why org charts have been used for so long from the military into the corporation. Nonprofits is because it helps us organize our thoughts and functions. So I think that I touch on this just really, really quickly. And we can dive a little bit deeper, even if we’re doing it all, I’m a big believer. I still have an org chart that breaks down what the functions need to be done inside your organization. It may be your name on every category for the time being right, the best org charts that I’ve seen Dave, and we’ve coached some of our team members through this is in each of the categories on that org chart, you have best practices or strengths needed to be successful in that role. So that if I’m working outside my strength, like way outside my strengths, and I say, gosh, I can’t keep multiplying my time and my energy.

Larry Broughton
00:02:57
Maybe I ought to focus on continue to focus on those areas. I’m strong, but find someone else who has areas where I suck, or I’m just not very good at to take some of that stuff off my plate first. So that might be your first hire. It might not be an executive assistant. It might not be an accounting person. It might be an operation person who knows only, you know, based on your Strengths are. But I think that even if you’re a small organization, you’re a startup, having at least your functions on some kind of chart, and we offer this in all of our different programs. I think it’s a great, great place to start because it organizes your mind on what needs to be done, what needs to be executed on a regular basis. We can go deeper on all of this stuff, but I think that’s might be a good place for us to start.

Dave Braun
00:03:42
Yeah. And it sounds like what you’re saying is it would be really nice to not only put in like strengths or Kolbe score, an ideal Kolbe score for those different functions, but then it might be, if you are the CEO or the head of your company, and you’re doing your organization chart the first time, it might be nice to say, Hmm, on this function on a scale of, I don’t know, one to 10, 10 being best, I love executing in this function. And so then you can say, okay, that might give you an indication of where you would wanna make one of your first hires or next hire, that kind of thing.

Larry Broughton
00:04:18
Yeah, you gotta start someplace. Right. Because the truth is most businesses don’t start well funded. Most businesses are indeed bootstrapped. They start that way. And so let’s talk to the masses rather than the few people who are, you know, start their business and they’ve got, you know, 50 million in the bank, right. We can build an org chart. I mean, you can build an, build an organization. Let’s focus on those ones first. But I do think it’s pretty important to help you identify what, what are you good at? And who are your next hires going to be? Cause then ultimately you’re gonna start categorizing team members underneath each of those silos, if you will. You know, I’m not a fan of siloed organizations, but you get what I’m talking about. The people who are of strengths in the marketing area are gonna work under the marketing or with the marketing person. The people who are highly analytical and they work in product development or in the accounting department, they’re gonna work there. So that’s kind of how I, I see it. Why is it important to help streamline the organization. It adds efficiencies. People who are experts in a certain area can give you feedback that someone who’s outside that area, can’t give you honest, direct feedback about.

Dave Braun
00:05:37
Exactly. Yeah, yeah,

Dave Braun
00:05:39
Yeah. You know, and to me, it’s like, if you want build something worthwhile, you’re gonna, you’re starting your company. If you just want it to be a lifestyle business where you’re just the only employee, your team member, and you’re not gonna expand beyond you or whatever, then you don’t have to worry about it as much. But if you really wanna build something, I think makes sense to think of it. As if you’re building a house, you gotta put some plans together. You’ve gotta have a little bit of a structure. And that’s one of the first things to do when you are building that organization or building that business is what is your structure really gonna look like? And it’s in, I mean, you’re building a house. Every single house has gotta have, you know, the plumbing system, the electrical, you gotta have a roof, all of those things in common. So any business that you are building and you want to do something that’s beyond you are not totally dependent upon you. You gotta have some of those common things like you’re talking about sales and marketing and operations and administration functions, right?

Larry Broughton
00:06:41
Yeah. I, I think that’s a good way to phrase it, Dave, these org charts also help us assess the workloads for, from each of the team members though. I think that’s an important thing to keep in mind. The workload, there will be some departments that will just naturally, depending on what your organization is, some departments will naturally be larger than, than others, depending on what the function is if they’re filling. Yeah. In that I’ve never seen, got two people in this department, two people in that department, two people in this department.

Dave Braun
00:07:12
Yeah.

Larry Broughton
00:07:13
You know, no,

Dave Braun
00:07:14
Doesn’t work that way. No.

Larry Broughton
00:07:16
No, it doesn’t work that way. And it depends on the where you are in the life cycle of the organization, sales and marketing in the early years of a business, tend to require more time, energy and resources than after it’s stabilized. And so it’s gonna require more people in that department. If you’re preparing to divest yourself in the business or sell it, you may spend more times on the accounting side, making sure that everything is lined up and you’re maximizing all that kind of stuff. So it really does depend. But in addition, I think Dave, having a clear understanding of your org chart will help you identify and determine competencies of the people that are inside your organization as well.

Larry Broughton
00:08:03
And you can kind of the– only word that’s coming to mind. And it’s probably, probably cause it’s an accurate word is compare performance of people within the actual department against each other. And cause we’re, this is not a nonprofit. Performance matters inside organizations. And so you can ask yourself, well, gosh, if I’ve got three people in this department in this one it’s just constantly pulling this down. You need to ask yourself, okay, do they have the right strengths in the organization? Let me go back to my org chart. Here’s what I thought that the key strengths will be. Does that person actually share them? And if they don’t, is there another seat in the bus for them? I’ve shared several times where we’ve done this with the organizations where we’ve taken people out of one department and put ’em into another and vice versa. And then they flourished plenty of examples where that kinda stuff happens. But equally, there are examples where people just aren’t fitting in an organization for whatever reason. And you gotta coach ’em up or coach ’em out of the organization.

Dave Braun
00:09:10
Coach ’em up, coach ’em out or coach them over. How about that to another yeah.

Larry Broughton
00:09:14
Coach him over to another to exactly. Yeah. So there’s lots and lots of reasons why org charts are important, but I would not get stuck into saying, I just don’t need one. I used to have one in corporate American, I don’t need it any longer for folks like me anyway, it helps again, organize the functions that need to be done on a day to day basis in the business.

Dave Braun
00:09:41
Okay. So let’s make this a little bit practical.

Larry Broughton
00:09:46
Here comes Dave,

Dave Braun
00:09:47
Here we go.

Larry Broughton
00:09:48
Here we go.

Dave Braun
00:09:49
So a couple of things is, let’s say how, first off is, if you’re listening to this and you don’t have an org chart, maybe you haven’t updated it for a long time. How would, what do you think is the best way to get started? Do you think it’s the best way is to say, well, keep it simple. Maybe only go a couple levels deep because we’ve had folks in our coaching programs that have gone made it simple. Some have like really expanded it out

Larry Broughton
01:10:20
The entire organization should you should, you’ll generally be able to fit onto one page

Dave Braun
01:10:25
One page for the entire organization.

Larry Broughton
01:10:27
Yes, entire organization. Okay. So like when we had 24 hotels, we had the entire organization on one page now, which you end up putting our categories. So under the operations department, you might have general managers, 1, 2, 3, 4, 5, 6, 7, 8, 12. You might have under them. You know what I’m saying? You don’t need every single picture of the people on there, but certainly the key members need to be in there because what a good org chart will do, Dave is help you spot holes in the organization, which is really important. You know, it’s not just, it’s not just as important to know who’s on the team, but who’s not on the team. Who are you missing?

Dave Braun
01:11:10
Right. Absolutely.

Larry Broughton
01:11:11
You know, you don’t have, your starting lineup has got holes on it. That’s important to do. But also Dave, think about every time we’ve done a mastermind, we’ve done an acceleration challenge or we’ve done Victory master class. We have folks do not just org charts for today. What’s the org chart look like, what are you gonna need in order to move you from the 5 million to the 15 million mark or from the hundred thousand to the 250,000 mark, right? Or from the 50,000 a year startup to break your first a hundred thousand dollars. Cause most people can’t do it by themselves. And sometimes these, these are even outsourced people. So I, I do believe Dave, where do you start? Will you start with, where are you today? What are all the different hats that you’re wearing today?

Dave Braun
01:12:00
Right.

Larry Broughton
01:12:02
Okay. If you were by yourself, if you’re not then put your team members down, maybe it’s you and a partner. Okay. Here’s what you’re responsible for. Here’s what your partner is responsible for.

Dave Braun
01:12:13
Yeah.

Larry Broughton
01:12:14
Okay. We start there. And there are plenty of org charts online, for crying out loud, just go to your favorite search engine and in the image section that can sample org charts.

Dave Braun
01:12:27
Right?

Larry Broughton
01:12:28
We’ve got ’em in our programs. I think ours are better than most.

Dave Braun
01:12:33
Of course we are. So, so

Larry Broughton
01:12:37
I’m so bad. I’m such a shameless plugger yeah.

Dave Braun
01:12:41
Well it’s our, it’s our podcast. Sorry about that folks. But no, we’re not sorry. So a couple of things that I wanted to highlight, you had mentioned some of the, so one of the benefits will help you spot holes in the organization. But another thing that I was thinking also it might help you spot duplications when you don’t need to have, or you’re overstaffed maybe in an area.

Larry Broughton
01:13:06
Well, that’s the key right there, right? If you’re overstaffed. I was saying earlier you may have duplicates. You may have five accounting managers. Well, why is that? Well, do you have enough workload to keep them employed? Or are, is there a phase coming a growth phase or it’s better to have them on board now in strength, strong in the organization who understand the DNA so that when you bring on an additional three or four or five clients that you hit the ground running without ever I’m mixing metaphors here, but you get it without missing a step.

Dave Braun
01:13:40
Yeah.

Larry Broughton
01:13:40
You’ve already got your team member, you got your team built right now. Then you just have to make that decision. Well, gosh, I’m not gonna have them on board for another six months. Is there something else that your team can do in the meantime to stay productive? Can they take time off? You know, you can ask yourself these questions, right? But particularly in today’s work environment, Dave, I think it’s better to hang onto strong performers than to cut them loose. You may never see them again.

Dave Braun
01:14:14
Oh, absolutely. Yeah, absolutely. So another point I wanted to bring up is you talked about having today’s and we do this in our program, right? Today’s org chart and tomorrow’s org chart. And one of the things I was thinking is one of the most important reasons you do the tomorrow’s org chart is it’s going to start putting in your brain a, I don’t know how you call at what you you’re gonna start activating your particular activating system. And then you’re gonna start looking for the people that may be filling those future roles.

Larry Broughton
01:14:49
Or you can say it that way, or you can talk about how us air fair people, you start manifesting the right people for your team.

Dave Braun
01:14:55
Yeah. Yeah. You’ll start becoming aware. It’s kind of like, okay, I’m thinking about getting this nice blue Tesla and then all of a sudden, oh you and

Larry Broughton
01:15:05
Where you look our blue Tesla’s. That’s exactly right. Because you can start putting it out there to the universe, talking to people that you know, that are in the industry. Hey, you happen to know anybody because in a couple of months I’m gonna be looking for that, this unique unicorn, if you know any unique unicorns like that, send them my way. Yes, absolutely. You should be looking down the field a little bit.

Dave Braun
01:15:29
Yeah. And I think that’s one of the reasons why it’s so important to start your organization right with a proper vision, mission and core values. So that you’re of course, so that you’re all set up to attract people who are maybe those unicorns, because listen, if they don’t see some great stuff in your company, in your business or being you being a great person, they’re gonna say, screw you forget it.

Larry Broughton
01:15:51
Gonna say that. Yeah. Maybe you’re one of the, maybe this is the first podcast you stumbled on by us. But I would encourage you to go back and listen to some of these other ones, because we talk about this a lot, the importance of having your published vision, mission and core values so that you can attract rock stars to your organization and not just team members, not just coworkers, you know, and those types of people, but also clients, investors, people are much more choosy about who they’re gonna be doing business with. So it’s, even if you are a solopreneur and I’m not a big fan of that term, but even if you’re a solopreneur, you should have your vision, mission and core values written out because someone is going to ask you and frankly, you may feel lost at some point you think, why am I been doing this? Why, why am I here?

Dave Braun
01:16:34
Yeah.

Larry Broughton
01:16:35
Why am I putting so much time, energy, and effort into this? So that Dave, I think is a good point so that when it’s time to bring on that critical player in the organization, you hand him your dynamic business plan for growth that has everything written on there, which basically your recruiting poster. Isn’t it?

Dave Braun
01:16:59
That’s true.

Larry Broughton
01:17:00
Right? Yeah. Here’s why I want you on our organization. I think you’d be an amazing fit. Okay. Let’s make it happen.

Dave Braun
01:17:07
Awesome. Yeah. Okay. Last practical question and thing to talk about is how often do you think somebody auto update this? How often should somebody update?

Larry Broughton
01:17:22
I hate these kind of answers, but it’s true. It just depends. It depends on what is the life cycle of your organization. At a minimum, I think you need to be looking at it annually. When you, when you review your dynamic business plan for growth, with all the team, all the key leaders in your organization. Now, if that key leader is you and your significant other good, pull it out, dust it off. Do my core value still make sense. Does my vision and missions don’t make sense? Does org chart still make sense? Am I on, on track here? But I would think at a minimum annually. But on the times, you know, business is so dynamic, which is why it grinds most people under the ground because it changes all the time. You may have had to slice off one of your business arms just to survive. That’s gonna take some adjusting of the org chart. You may have got two huge pieces of business that now bring 40 extra percentage points to the bottom line, tat’s gonna require some adjustment. So there’s not an easy answer to have most things in business. But at a minimum annually, you ought to be pulling these things out.

Dave Braun
01:18:34
Yeah.

Larry Broughton
01:18:35
But whenever there’s a significant change in the economy, in the industry, in your marketplace, in your business, you need to pull it out.

Dave Braun
01:18:42
Yeah. I, yeah, that makes a lot of sense.

Larry Broughton
01:18:43
Pull it out. I shouldn’t say pull it out. It should be someplace, very public where you know what it looks like. Yeah. So it’s not like digging through binders. Look, where did that damn org chart go? That’s just a tool that should be at your fingertips.

Dave Braun
01:18:57
Agree. Awesome. Okay. Well, let’s review a couple of things. We talked about how to start. We talked about getting it, it on the one page, list the major categories, put your key team members there potentially put in some of the, like the requirements like strengths or Kolbe score that you would want to have somebody ideally filling that position. You’d want them to have those things. We talked about doing today’s and tomorrow’s, or three months, six months a year from now. And then, so that’s kind of like getting started and really it’s just getting on, you know, having a piece of paper, normally putting it in the landscape mode and then start drawing boxes and assigning,

Larry Broughton
01:19:40
There are apps to do it. Now it’s very, very simple to do it.

Dave Braun
01:19:46
And then, so that’s how to start. And then how often update, we talked about it. Like the lawyer answer, it depends, but, but basically at least annually, or if there is some kind of a major change or significant change in the economy, in your marketplace, in your business, maybe somebody significant leaves your business, something like that.

Larry Broughton
02:20:10
yeah, that’s right.

Dave Braun
02:20:11
All right. Those are some great practical tips.

Larry Broughton
02:20:13
So you may have, let’s keep in mind if you are the only person Dave in your organization, or you’re just a couple of you, but let’s say that you’re playing the role of CEO and marketing person in your firm. And you’ve got someone else who’s playing chief operating officer and HR in your organization. You would still hold several positions on that org chart so that when you hire someone to come in and cover the, whatever it is, the marketing role or the team member development, or client acquisition, whatever you call it in your organization, those fill in and you start to narrow more under where your strengths are.

Dave Braun
02:20:51
Okay. Yeah. That makes sense. Okay. One other little piece of advice that just came into my brain is if you start filling in your organizational chart, you add a new person, please do not abdicate delegate. Don’t just say, oh, now I’ve got the person to fill that role. All right, Now I don’t have to worry about it anymore. The rest of my life, I’m gonna concentrate on the other stuff.

Larry Broughton
02:21:16
Yeah. Well, yes at the organization grows, obviously it’s harder to keep your finger on the pulse of every position in the organization. This is why you have layers in the organization, whether it’s right more horizontal or vertical or whatever it is, however you run your organization. But I would, I think there are definitely two areas that you do not advocate ever. Dave, you heard me say that, you know where I’m going with this two departments, the first strings, right? And your marketing initiatives, those things, you always have to keep your finger on the pulse and I’ve done it to various success and failure throughout my career. There’s been times where I’ve let my finger taking my finger off the pulse, trusting someone else, you know, and has come back to bite me. It has always come back to bite me and so I’m a, I really believe that you’ve gotta keep your finger on the pulse of the bank account and your marketing initiatives more than anything else.

Dave Braun
02:22:18
make sense.

Larry Broughton
02:22:20
The marketing is the messaging. What do you tell the world, is why I say that.

Dave Braun
02:22:24
Yeah, that makes sense.

Larry Broughton
02:22:25
Okay.

Dave Braun
02:22:26
Okay. Anything else?

Larry Broughton
02:22:29
No, I think that’s pretty good.

Dave Braun
02:22:31
Yeah, that was good. All right. Well, let’s put a bow on this one and thank you everybody for joining us today. Remember building a team is the way to reclaim your freedom. And we’re here to help you with our course and community and our White Glove service, where we find a rockstar VA for you. So three things we’d love for you to do, and we’d really appreciate it. Number one, subscribe to the podcast you haven’t already done so, either on your iPhone or Android phone and on YouTube by hitting the subscribe button and clicking on the little bell next to it, hopefully get reminders when we have a new episode out. And then number two is give us a rating, preferably five star, or leave a comment below this video. Any comment, it helps us to get the word out and we will respond very quickly to you.

Dave Braun
02:23:14
And then the third thing is go to Hireyva.com for more information on a course in community, check out some of our other podcasts, we have transcriptions there. We have some great downloads, our free checklist to learn what you need to do to properly prepare for hire and thrive with a Virtual assistant. So just go there- there’s just a lot of information. Now, remember though, even without experience, you’ll learn how to prepare for hire and thrive with Virtual assistants. Larry, we’ve helped a lot of folks, more people are coming into our white glove service. It’s fun to see people’s lives being changed. What was it, Last week? We just had great Virtual spotlight session. We had a Q and A, it was a, it was a pretty amazing week. Yeah. So everybody just go to hiremyva.com for more information. That’s really all you have to do to remember.

Larry Broughton
02:24:00
All right. My friends. Well, thanks for joining us today. God bless you. God keep you God hold of you. And until we see each other again, go get them. We’ll see you again.

Dave Braun
02:24:09
Bye. Bye folks.

Larry Broughton
02:24:11
Bye.

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