The risks associated with your role in your business and that of your key employees is a major contributing factor to the salability and value of your business. If your business is a collection of key players each with tribal knowledge and you in the middle as maestro then you’re risk is very high.
Ideally, your business performs a set of well-defined functions. Each of those functions is executed by one or more defined roles. Then you fill those roles with the right people. That’s how you build a valuable, scalable, salable business.
I remember in the early days of my business mastermind and entrepreneur peer groups we’d talk about tactics and strategies, often around growth, we’d talk about technology stacks and hacks… and then slowly, then all at once, almost all of our conversations turned towards our people.
You can eliminate, automate and delegate to get to a certain level but at some point, hopefully, the business needs more people responsible for more than just tasks in order for it to grow. You need people responsible for outcomes.
The seats that you define for your business and then the people you hire to fill those seats are crucial for growth.
The other day I was walking with a good friend and co-founder of a small but growing software company. We were talking about changes on his team and who was responsible for what and I asked: “Do you have an Org Chart?”.
Him: “Well we’re not big enough for an org chart.”
Me: “Well, what would your org chart look like if it were a real business?”
Him: “What do you mean if I had a REAL business!?”
I blame it on my Boston blood, ball-busting is our love language.
What I mean is, imagine that your business is full size, much bigger than it is today.
Who would work in it?
What would their roles be?
Imagine that your business is 10X the size it is now.
What does that business look like?
What are the core functions in your business?
Who is performing them?
What would it look like if it were done optimally?
Most of us start by hiring assistants, its a great way to start. But then we hire for a skill set, then another, and we grow like some kind of amoeba. But this only works for your first few people. Pretty soon you need some structure.
This approach to organizational structure changed my hiring and organization forever. Its pretty straightforward. I split my organization in two halves: Sales and Marketing and Operations. Once I redesigned my business, the management, and the communication flow around this concept my entire business changed.
The first step? Draw it.
Forget the names and faces that you have now and the roles they’re serving or tasks they’re performing. Start by designing your business. Imagine you’re 5-10X bigger than you are today.
What are the roles that exist in that organization?
Draw it out. Once you’ve done that its time to think about putting names back in those circles. Where are the gaps?
Here’s what my org chart looked like when I sold Distressed Pro.
Here’s the org chart I put together in planning the AltReports Newsletter, a business I ultimately decided I wasn’t interested in pursuing. In the very beginning its your name in all those circles.
As you start to grow you’ll have more names and some of those names will be in multiple circles.
When you approach growth this way its much easier to identify your bottlenecks and your next hires. Which functions are overwhelmed? Why? What does the right candidate look like to fill that role? All these questions are easier to answer once you’ve brought definition to the roles and seats.
If you’re serious about growth, plan for it.
Start by drawing out what your business would look like if it were a real business 😉
I use Lucid Charts (yes its an affiliate link).
Give it a whirl and let me know how it goes.