When it comes to sports teams, the coaches have a pretty solid picture of what they need for success. A baseball team needs nine players on the field, soccer eleven, and basketball five. But when it comes to the workplace, there is no hard and fast rule for determining the perfect number of roles for your team.
Whether you are a growing startup, or an established business, your company's products and services are only one part of the success equation. How you structure your organization can make the difference between long-term failure and success.
Here are some tips for planning organizational structure, how you can evaluate your current organization, and one way to make the most out of your team going forward.
Planning Your Company's Ideal Organizational Structure
There are many ways you can structure your company, and it will likely change as your organization grows. Your company's structure is meant to increase the effectiveness of your business' operations with a defined hierarchy. The three main types of organizational structures are called functional, divisional, and matrix.
- If your company uses a functional organization structure, your hierarchy is based on each employee's job function. This structure groups together employees based on their roles in the company. For example, all of your marketing staff will be in the same group, with the number of leaders dependent on the size of the department. A functional structure puts employees together who have a common goal, such as promoting your business.
- A divisional organizational structure separates the employees by region or product instead of according to function. If your company is spread across the U.S. or is international, it might make sense to have this type of structure. This way, you would have teams with finance, marketing, and sales department for each region.
- A matrix organizational structure is a combination of the functional and divisional structures. Matrix organizations are more team-oriented, and employees not only come together as teams to focus on certain projects but will also fill specific roles in the organization. This is another structure that is common with companies that operate across different regions.
Your company may start with one business structure and find that it doesn't suit your needs at a later date. You may experience enough growth that your current structure no longer supports your operations and company vision. For example, you might begin serving just one city but decide to expand regionally or even nationally. This could require a different organizational structure to better fit the needs of your growing company and its clients.
Signs That Your Organization is Short-Staffed
There are no hard and fast rules for staffing a company, but not keeping up with growth can prove disastrous. While a temporary staffing issue may not create long-term problems, a prolonged period of being short-staffed will.
You may have high standards for your business, but when your company's management and other staff are stressed and unhappy, this is going to impact your business. Understaffing can lead to a strained company culture, low productivity, and higher turnover rates. A few signs that you are short-staffed and need to beef up your team include:
- Lack of Teamwork. When a company grows, it is usually due to teamwork and trust. A lack of this in the workplace is a problem and could indicate communication issues and a need for more staff and leadership.
- Long Work Hours. Running any business is difficult, but a company's tasks and goals should be reasonable enough that employees can get things done without suffering burnout. There is a new Japanese word “Karōshi” which means “death by overwork.” The emphasis on avoiding “Karōshi” hopes to create awareness and work-life balance. Employees can work longer hours for short periods of time, but need balance to return to remain productive in the long-term.
- Heightened Emotions. A growing business can be an emotional environment, but if all the outbursts are negative and occurring frequently, it's likely that your staff is overworked and stressed.
- Attendance and Turnover Issues. When you have employees who are calling in sick, showing up late to work, and just plain quitting, there is a good chance that your company has a staffing and morale issue.
- Dissatisfied Customers. When you have stressed and unhappy employees, that dissatisfaction is going to be felt at the customer level as well. Fulfilling your company's mission is going to require that you dedicate time and attention to the roles within your organization.
Is Your Business Overweight with Staff?
What if the opposite is the case and you have hired too many people as you consider the current scope of your operations? Instead of being "too big to fail," your company might have become "too big to manage." Here are few signs that your company might operate more effectively as a leaner version of itself.
- Diluted Mission Statement. If you want to grow your business, the company's mission is clear to everyone. A clunky or overweight organization may not have clear enough goals that tie into the overall mission.
- Unfocused Business Functions. Most early-stage companies have an intensely focused strategy where everyone knows their role. When a company grows just for the sake of getting "bigger," it's possible that business functions can lose sight of their core activities.
- Lack of Control. If your company's business segments aren't integrated, the result can be a bureaucratic mess of red tape, lack of accountability, and loss of control.
- Undefined Culture. A company that lacks a sense of unity and cohesiveness could be too large to succeed.
Being Flexible and Adaptive as You Build Your Team
Companies rarely exist in a vacuum. The scope and depth of your business operations on opening day hopefully won't be same one, two, or five years down the road. As a result, it is difficult to designate a specific number of roles required which makes it very important to stay aware of and anticipate the consequences of under or overstaffing.
As your company continues to grow and expand, the best entrepreneurs and managers must adapt to become the best leaders possible at each stage of business growth. This requires not only a sense of self-awareness but also a keen eye towards both short and long-term strategy. A senior executive may wear several hats with multiple roles to save costs but in reality, it can split their focus and effectiveness.
When you and your top managers take a proactive approach to identifying your optimal business structure and filling key roles in your organization, you will have a more cohesive and productive team, which will deliver the best possible bottom line results.
If you are considering the financial benefits and risks related to adding staff and roles to your organization, please contact us here. We can help you evaluate the benefits and consequences of adding (or reducing) staffing and roles at your company.
