How an organizational chart can help identify problem areas Featured

8:00pm EDT July 31, 2012
Lois Melbourne Lois Melbourne

There are many interdependencies between people and departments at most companies. At times, communication breakdowns or inabilities of processes can stymie the best intentions. It is often difficult to diagnose the issues. Just like many health issues of the body, sometimes we in business have to go back to our roots.

When done right, an organizational chart can be a tool of enormous benefit. Let’s look at a homeopathic approach to diagnosing and fixing  problems within an organization using the organizational chart.

Visualizing structure

You may need to ask yourself the following questions if your company is experiencing inefficiencies, poor employee engagement, increased turnover, lack of responsibility for decisions, or bad communication.

  • Who has too many direct reports?
  • Where are the open positions?
  • Which managers are using contractors, and where do they fit?
  • Who has accountability?
  • Are the right positions reporting to the right people?

An organizational chart is a visualization of the structure of your organization. When you can see information visually in the context of the structure of the organization, the understanding of that information can often be instantaneously clear and impactful.

Some organizations claim they don’t need or want an organizational chart because they work in teams. Unless all workflow for decision-making  — expense reports, raises, promotions, disciplinary actions — are made across the entire team, then you likely have a hierarchy. Visualizing information about the reporting relationships in your organization can help you fix many issues.

Direct reports

There are a lot of issues that can come with the burden of too many direct reports. Managers can be stretched too thin to develop their direct reports, even if they can supervise that many people.

Your organizational chart should contain a roll-up of the headcounts. At a glance, you should be able to see how many direct reports and how many total reports a manager or executive has under his or her purview.

Companies often tout how flatly their organization is structured, but flatness can create painful consequences. Identify the span of control of your managers, and then analyze them for effectiveness.

Open positions

When open positions are tracked inside of an organizational chart, a world of opportunity opens. This communication of open positions allows employees to see where there is potential for them to move into a new role.

Developmental moves that provide exposure to new experiences create better-qualified employees for promotions in the future.

Visible open positions allow employees to recommend people they know for the job. This is an enhancement to your culture because people are more engaged when they have friends working at the same company. Referrals also reduce the cost of hiring. So keep those open positions visible in the organizational chart and in front of the entire company. It will save you money and frustration.

Using contractors

Your workforce probably consists of more than employees. Most companies have some level of consultants and contractors. This is often a great way to expand your capabilities without making an employment commitment.

It is important to know where you are supplementing your staff with contractors. The use of contractors, often to work around rules and budgets established for hiring, could actually cost the company more money.

Using contractors can also create an employee engagement issue if prime experience is being blocked from employees due to contractors filling positions. Track your contractors in the organizational chart and hold your managers accountable for your plan in working with these resources alongside their developmental plans for their existing staff.

Who is accountable?

There is a reason that regulatory agencies often require an organizational chart. They need to be able to identify who was responsible for decisions. The organizational chart may not be the official map of communication trails, but it should represent who has authority, and thus accountability, for decisions within the organization.

It is also helpful inside an organization to identify where you can go for the authoritative assistance you might need.

When you are feeling pain within your organization, evaluate your real organizational chart. It may diagnosis the source of your symptoms and provide healing answers.

Lois Melbourne is co-founder and CEO of Aquire, a workforce planning and analytic solution company based in Irving, Texas. Visit www.aquire.com for more information.