Here’s the takeaway: Design your company structure with clear roles in mind.
In my last post, we outlined how visualization is the key to creating an efficient structure. First, your leadership team should imagine that they’re high-paid consultants for another company in any distant but similar city (for Omaha, I often use Austin, Texas). This company that they are consulting for looks very similar to your company back home and has identical goals. Visualizing this helps them to envision a structure that will work best for that company without taking into account the people in those seats. Our objective is to create the ideal structure to get this company to the next level, 16-18 months from now.
As “advisors,” the leadership team can develop a leadership structure (not as it is today, but as it should be and looking towards the future). This will help make the company as efficient as possible. They can design this with the idea of structure first and people second.
As we begin this process, we start with basis that every company whether its revenue is $100,000 or $100 million, starts with three basic functions or seats:
* There needs to be way to market and sell the product or service.
* There needs to be a way for operations to deliver this product or service.
* There needs to be a seat to handle paperwork, administration, and making sure everyone gets paid.
On top of these three functions, there is an additional function. There needs to be a leader who, like a symphony conductor, orchestrates and oversees everything ensures everything is running smoothly. In EOS terminology, we call this seat the Integrator.
Based on this initial outline, we then move forward to create a custom accountability chart for the company they are advising for (always with an eye toward the future). As we go through this process, it is not uncommon to adjust the number of seats. Perhaps there are separate sales and marketing seats. There may be a need for two to three different operations seats. Depending on the size and type of business, HR, IT, and accounting may all have their own seat as well. The point is this: As experts in the field, the team knows what the best structure should look like. We have to ask, what seats will make this structure as efficient and effective as possible?
As you go through the process, keep in mind that the Integrator should have no more than seven direct reports. There’s some pretty convincing studies that show us any more than seven direct reports is just too many. Some would even say that seven might be too many. An efficient executive team will not have more than seven people responsible for the company’s Integrator. Once the leadership team has outlined the best structure for their company, they can begin to build out the responsibilities of those seats.
In about 50% of the companies we work with, there is an additional role that sits above the Integrator that we call the Visionary.
This is what we will tackle in our next blog post.
If your leadership team struggles with clearly defining their roles or remaining accountable for company functions, this process might be helpful. Please feel free to share with anyone who might find value in this. As always, feel free to reach out for more information: We’re here to help.
