In reality, organizational charts are a way to future-proof your business as it scales, ensuring consistency and a concrete document to refer back to in case of confusion.įinally, organizational charts also serve as a way for you to see holes in your company’s structure. Often, small businesses choose not to create an organizational chart because the employee count is low, or because it seems like a waste of time in comparison to core business functions. With an organizational chart, it’s 100% clear who reports to who, who has authority over which teams and members, and where information should be going to and from.ĭocumented organization structures also double as a roadmap for current employees to use to see where their next promotion may be, improving employee motivation. If you let responsibility slip into informal, half-forgotten guidelines, you’ll notice teams missing deadlines, information getting lost, and disagreements over authority. Why do you need an organizational chart?īusinesses have so many moving parts that it’s necessary to have a single source of truth. Here’s a very simple example, illustrating upper management and the departments they lead:Īnd here’s a more complex specimen, including departments, individuals, and even descriptions of job functions:Īs you can see, it makes it easy to see which branches report to which department heads, and which departments perform which function. As Business Dictionary puts it, “power travels downwards and answerability travels upwards”. How to use different types of charts for alternative organizational structures, like matrix and flatĪn organizational chart - or, for some reason, an organigram - is a diagram that illustrates rank, responsibility, and information flow in your company.How to use templates to create a simple org chart in Word, PowerPoint, Excel, and dedicated diagram tools.
Creating a cloud-based organizational chart in Google Sheets that you can automate.The hidden benefits of organizational charts, and why they’re not just a formality.The definition and components of an organizational chart.In this article, I’m going to show you how to create organizational charts using simple free tools, or powerful paid alternatives. It’s just as important as solid processes because it’s the single source of truth for the architecture of your business. You need to make an organizational chart for your business, no matter what size your company is because it ensures your company can scale consistently with a clear view of its structure. Is your team confused about responsibility, hierarchy, or who reports to who?ĭo you have a clear idea of where there’s room to give a promotion, or which department could do with more hires?
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