Management is a multifaceted skill, each facet seemingly standing on it’s own, and yet all so interdependent that alone they are almost meaningless and only function fully when all are in place. This is rather like the old fashioned wagon wheels, several spokes supporting the wheel rim around the hub. Without all the spokes in place, the wheel would probably turn but the ride would certainly be bumpy, and the risk of calamitous failure of the wheel extraordinarily high.

In this series of articles I intend to deal with each of the spokes of the mythical “Management Wheel”, hopefully demonstrating how they hang together and how important the are to the functioning of the organization as a whole. I have selected organization as the first spoke to talk about, not because it is the most important, although it certainly is important, but because it is without question the most basic, and the most abused.

Let us review what passes for organization in most small companies. (Do not be embarrassed if you recognize your company here, you are not alone.) The owner is convinced he can do it all, and while the company is small, he can. The three main functions of the business, get work, do work and get paid are all he is concerned about.

Get work or sales, is what he does when there is not enough real work for him to do, and he either does it himself, or assigns his most senior operations guy to help, after all “You got to know all about the job to sell it!” The ‘do work” part needs skills and training, so over time the owner builds up a group of workers he can trust. He often will appoint a supervisor for a part of the group, but when he is around everyone knows who is boss.

Finally, as far as “get paid” is concerned, the boss hates paperwork, so he gets his spouse, mother, or daughter to do that. “Just call the CPA, he will set you right”. Of course she also handles payroll, so she gets stuck with dealing with all those nasty discipline issues the boss hates also. “Can’t chew someone out, then ask them to work Sunday can you?” No job descriptions, no organization chart, no established lines of communication or authority, If this owner does make it through the first few years he suddenly realizes that he is working way to hard, and he is earning less than he pays his employees.

Compare that with functional organization. The entire organization is studied to define all the work that is required to be done. All the tasks thus identified are congregated into “functional’ boxes, and authority levels are defined for each box. Also defined are the measures of performance that will be applied to each box, and the most appropriate lines of communication and responsibility are also defined. Doing this defining achieves a secondary objective, it creates a “functional description” for each box, commonly referred to as a job description. The process also creates by default the most appropriate organization structure which can pictorially be presented in an organization chart,

Now, and not until now, do we look at our people. Each employee is matched with the each box, with some picking up more than one, while some boxes cannot be matched with current employees suggesting new hires may be required. (Regrettably, the reverse is often also true, some employees cannot be matched with a suitable box. As difficult as this may be it helps identify the dead wood in the company.)

As the saying goes, “If you don’t tell people what you want them to do, don’t be surprised if they disappoint you.” A well conceived and documented organization with defined authority and appropriate measurement is the first and most effective step towards creating an organization where employees are responsible and accountable. It requires a definite investment in time and effort but the dividends will be enormous and they will be measured in profit and peace of mind.