Any company or organization needs a good structure to run smoothly. Without clear procedures, hierarchies and policies, confusion can seep into your daily activities and affect the productivity of your company negatively.
That’s why learning how to have a flawless company structure is extremely important if you want to take your organization to the next level, whether you’re a small business, or a big enterprise.
Why Organizational Structure Matters
One of the biggest sources of frustration for employees, or even outright conflicts between your team members, is an overlap or lack of clarity between positions. When the marketing specialist and the PPC manager both have to do copywriting for ads, it can get confusing as to who has to deliver what, by when. That’s one of the ways in which organizational structure matters.
But there’s more to it than keeping your employees happy. Having a flawless company structure also means freeing up time. When everyone has a clear job to do, and exhaustive procedures that dictate what they have to do, they can focus on doing their job better, innovating, and taking your business to the next level.
On top, an organizational structure can be very insightful. Knowing exactly what people have to focus on means you can gauge the areas in which your company lacks resources, and better allocate them so that everyone stays on top of their tasks.
Lastly, a flawless company structure is fundamental for setting the right course for your business. You can’t hope to outline a solid marketing strategy, without being able to delegate tasks because nobody knows exactly what they have to do.
On the other hand, being unclear about your organization structure can result in:
- Confusion and frustration
- Unhappy employees
- Resource mismanagement
- No clear course for your business
- So let’s see how you can avoid all of that.
How To Create A Company Structure
A company structure, while rigid in nature after you’ve completed it, doesn’t need to follow a strict set of rules during the creation process. If you’re selling motor parts online, the classic departments structure will help you a lot. On the other hand, if you run a small marketing agency, there’s no point in setting-up a sales, marketing, and financial department. You’re better off structuring your company based on the projects you run.
That being said, we will cover a classic company structure in this guide — but feel free to adapt and change stuff according to your company’s needs.
Step 1 — Analytics
Before creating departments, assigning people to them, and writing procedures, it’s important to understand your business. Analyze your past performances, looking for:
- Revenue, sales, profit, ROI, and all the other basic metrics
- The projects that net you the most numbers
- The promotion practices that work the best for you
- The target audience that converts best
And then prioritize structural changes based on that. Let’s say that your marketing efforts are driving in more leads than the sales department has time to process. In that case, you’ll structure your company by investing more into sales, all while keeping the marketing efforts running as they do now.
There’s not a lot of universal advice you can follow when analyzing your business. It’s important to adapt this research process to your company, and its needs. Once you do that, and you have the data about what works, and what doesn’t work for your company, it’s time to actually structure it.
Step 2 — Create Departments
After you gain a deep understanding of your company, it’s time to put it to good use. Take what you’ve learned and adapt it into departments with clearly defined roles, and human resources.
In general, a company will feature:
- A marketing department
- A sales department
- Financial/Admin department
But the priorities and duties of each department will depend on your business. For example, let’s say you’re a startup with a lot of funding secured and big plans for an exit in the near future. In that case, it’s better to merge the sales & marketing department, and spend as many resources as you can in your Operational/Product department, because that’s what enterprises are looking at when trying to buy you out.
That’s just one example, and this type of changes can happen in a lot of other scenarios. That’s another reason you have to analyze your business from the beginning, and understand what structure works for you.
Once you have your departments laid out, it’s time to assign roles to each of them. Each department, or project, your company is focused on should have a lead that’s in charge of the day-to-day operations.
Step 3 — Create Rules And Procedures
Your departments will have a hard time working properly without procedures and policies in place. Spend some time brainstorming with your leads to figure out what procedures need to be established, and then delegate the task of creating them to the right people.
This is a very important step.
If you manage to create comprehensive rules and procedures for your departments to follow, you’re cutting your work (and your managers’ work) in half. Whenever a new situation, or a problem arises, your employees can solve it on their own by referring to the rules and procedures.
Step 4 — Accept Feedback And Criticism
Learning how to have a flawless company structure is an ongoing process. For the most part, you won’t be the person directly affected by these changes, your employees will. So it’s important to follow-up on your created structure often, especially in the beginning, to understand how this transition is being received by your employees, and make the necessary adjustments.
Creating a flawless company structure is important if you want to get rid of confusion, frustration, and set a better course for your company. However, just following a basic template won’t cut it. You need to adapt your company’s structure to your organization’s particularities, and then establish departments, positions and procedures accordingly.
Now, we’re curious to know — if you’re willing to share, of course — how is your company structured? Did you find this article helpful? Check out my website for further articles on business and more!