8 Ways Improving Organizational Design Impacts Your Small Business

organizational-design

Regardless of the staff size, a poor organizational design contradicts business responsibilities. These contradictions may include role confusion, lack of functional coordination, and slower decision-making processes. As a result, businesses may suffer from unnecessary stress, conflict, and complex issues if left unresolved.

To effectively run a small business, entrepreneurs need to implement organizational structures in the workplace. Delegating activities toward achieving the common goal in the industry is the main priority of organizational structures. As a small business owner, you should consider the importance of how enhancing organizational structure can affect your business by partnering with organizational design consulting firms like Navalent.

Without understanding how organizational design works, your small business may risk possible reputation strain and bankruptcy. To prevent these business risks, you must learn to enhance overall corporate practices. In this article, you’ll know the benefits of redesigning the organizational structures in your business.

Managing Small Business Operations With Organizational Design

organizational-design

The lack of organizational structure may jeopardize a small business due to the employees’ resistance to follow rules that don’t exist. Therefore, as a small business owner, creating a firm organizational structure is crucial in controlling overall business operations. As you incorporate new business structures, your staff will comply with the rules, which smoothens the overall business productivity.

With zero hesitation, your small business can easily make decisions because there’ll be no extra management layers that need approval. For example, your small business can increase revenues and boost employee engagement with quicker decision-making processes. As the organization reaches enhanced sales performance, your small business can be on top of the competition within a shorter period.

Opening Additional Business Locations 

Every startup entrepreneur dreams of eventually becoming a huge corporation. However, with the tough market competition, business owners lose motivation to strive to reach improved market grounds. While this scenario may seem disheartening, you can still prevent staying as a small business and earn the most significant market share by recreating your organizational structure.

You can receive enough revenues to open multiple business locations as you actively restructure and monitor your existing organizational design. When this situation happens, you already have a firm corporate design, helping you maintain, and enhance your market share consistently. Because the structure is the same in every business location, you don’t need to visit each place daily. Hence, adopting an effective organizational design provides you peace of mind, especially as you grow in the industry.

Boosting Overall Employee Performance 

Small businesses heavily rely on human resources to produce supplies and provide customer support. With that, productive employees can meet deadlines and sincerely contribute to building positive customer relationships with your brand. Therefore, if you aim to increase overall business market share, building and maintaining an organizational structure will help you enhance employee performance.

As a small business owner, your main role is to monitor every employee’s progress around business goals. However, since resources are limited, you have the choice to incorporate technology-driven tools to track and organize the day-to-day workflow in your operations accurately. Accurately monitoring employees’ productivity enhances business transparency, giving you the exact knowledge on which organizational issues need improvement.

Reducing Employee Conflict With Organizational Design

Employee conflict can be poor communication, misunderstandings, and opposing priorities. Moreover, the challenges of having employee conflict include lower productivity, project failure, work disruptions, and termination. Without handling any form of disagreement right away, your small business may not be able to achieve potential customer needs, which can directly impact your business reputation.

By using an organizational design, you may prevent employee conflict obstacles. For example, as you communicate the new small business structure, your staff will focus on their job responsibilities. With that, you provide a clear understanding of the importance of their roles, which makes them hesitate to indulge in conflicts.

Improving Communication 

When your employees know the vitality of healthy communication, you’ll eliminate unnecessary workplace issues and improve overall performance. Once you start promoting a communicative workplace, you create a more vital and engaged team. Therefore, you must create an organizational structure to avoid miscommunication in your small business.

A specific organizational design builds a hierarchy that fosters healthy communication between different departments in your business. For example, as you delegate duties to various teams, workplace staff will know who they need to turn to once an issue arises. In addition, employees don’t need to receive your approval to proceed with one communication issue.

Providing A Greater Sense Of Teamwork 

Teamwork in a small business workplace provides the business owner and the employees the skill to familiarize how to work with one another actively. However, organizing team members can be difficult without a clear job delegation. As your small business suffers from a lack of trust, physical proximity, and optimal conditions, you can’t just demand your team to work together without encountering workplace conflicts.

While acquiring a sense of teamwork is challenging, you can still save your small business by improving the organizational design. For example, you can connect each job role to begin addressing the teamwork obstacles.

Responding To Industry Trends And Marketplace Conditions 

organizational-design

Responding to periodical trends is beneficial in different ways. Since technology is constantly changing, small business owners must continuously engage customers to sustain market relevancy. By aligning organizational goals with industry trends, businesses can develop results.

Changing market preferences may cause product or service declination. In addition, trends will allow you to develop a reliable system to discover multiple sources of change. Therefore, if you want to adapt to ever-changing market trends, you must sustain high-quality services.  

Attracting Growth Opportunities

When an entrepreneur launches a business, the main goal is to build a reputable brand and eventually grow. However, growth doesn’t happen overnight. Indeed, change requires patience, hard work, and dedication.

That said, it allows small businesses to attract investors and expand opportunities. To attract growth opportunities, redesigning existing organizational design is beneficial. This strategy keeps both employers and employees compelled to long-term business goals.

Key Takeaway On Organizational Design

As a small business owner, you should look for ways to stay relevant in the industry. Restructuring organizational design helps you respond to industry trends, reduce workplace conflict, and boost staff productivity. Therefore, incorporate a new organizational structure to increase overall business sales performance.  

 

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Six Steps to Creating a “Must-Have” Organizational Plan

must have Organizational Plan

Do you have an organizational plan? Everything starts with planning. Whether you want to start a business, grow the business, or simply perform the necessary tasks to keep the business profitable. Without proper planning, all you have is an unfruitful idea.

All business plans require Organizational Planning. It is an integral part of defining your business module and your objectives. It is extremely important for business owners to have an organizational plan in place in order to navigate the daily progress efficiently. It should delineate not only your organizational structure of departments, managers, and staff but also the functions, tasks, and processes they regularly execute.

Your organizational plan should flow from your strategic plan. The strategic plan defines your long-term goals for the business, which can only be accomplished by achieving your organizational plan’s benchmarks.

These concepts may seem highly cumbersome, but let’s take a look at why you need Organizational Planning and how best to manipulate it for your business’s success.

organizational plan

Importance of an Organizational Plan

A detailed organizational plan is crucial for every small business. Besides outlining all the tasks, functions, and goals for a department or area, it should also show the assigned responsible person. It is also helpful to have organizational structures that clearly show supervisory relationships as well as the power structures for accountability.

This plan is the best way to simply and distinctly communicate what everyone should be doing and how it relates to the business as a whole.

Here are a few things you can accomplish with a well-defined Organizational Plan

  • Clarifies the role and function of each staff member

Having a defined Organizational Plan helps each member of your team understand what is expected of them. Their roles are preset; therefore, they can diligently perform their tasks without any confusion. This helps you finish your projects or reach your targets faster and more efficiently.

  • Shows how the staff is contributing to the goals of your business

A proper organizational plan helps you track your employees’ progress, which helps you determine just how useful they are to your organization. This comes in handy, especially at the time of appraisals and/or dismissal.

  • Displays managerial and team relationships

An organizational plan helps in determining the structural interaction between management and the teams. Each manager or supervisor can analyze, track, and evaluate how each team member contributes to the business function. This is useful for identifying who requires more training or guidance or even recognizing those who can handle a more substantial workload.

  • Can reveal gaps, issues, and liabilities

The incredible opportunity to track the progress of each task, team, project, and target actually provides insight into any shortcomings as well. Organizational planning helps identify any inadequacies or limitations that may be hindering the growth of your business.

  • Clarifies the when’s, how’s, and who’s in your processes.

Each member of your business has a strength, unlike others, and can handle specific types of tasks. With proper organizational planning, you can delegate the appropriate tasks at the right time to the most efficient member of the team for elevated output.

  • It makes it quick work to know whom to turn to when there is a problem.

Organizational planning invariably provides a detailed account of everyone’s strengths and weaknesses. Therefore, when you are faced with a difficult situation, you know exactly which member of your team can effectively solve the problem.

Everyone working with you needs to be aware of this information. Whether they are working at an entry-level or as management, their roles and expectations should be clearly defined. You can post it in a conspicuous place, whether it’s on a bulletin board or your internal website, so each member is well-informed of their responsibilities and the vision of the company.

Six Steps to Create Your Organizational Plan

If you already have an organizational plan, then it is good to verify and update all the necessary information. However, if you don’t already have an organizational strategy, it is not too late to start one now.

Following are the steps for creating your own organizational plan.

  • Pick Your Team – Choose an efficient team based on their skills, strengths, and determination for success.
  • Draw a Chart Showing Your Organizational Structure – Share your company’s progress and the targets you have set for short-term and long-term goals.
  • Drive Out Goals & Objectives – Define the company’s goals and objectives in detail to help them understand the vitality of their roles.
  • List All Tasks and Functions – Predefine their roles and stress on their tasks and functions so they know what is expected of them.
  • Review Current Business Processes – Go over the business’s current situation so everyone is aware of the current state and how they can contribute to the company’s growth.
  • Compile Findings into Organizational Plan – Invite their input and design an effective organizational plan.

Let us take a detailed look at these steps to create an Organizational Plan.

goals and objectives

#1: Drive Out Goals & Objectives

All organizational plans need to include what the business wants to accomplish and how to get there. Clearly, state what you want your business to become – which drives out your goal/destination and the objectives/measurements for reaching it.

Common goals include:

  • internal stability> reducing staff turnover, promoting consistency
  • creativity> inspiring innovation, ingenuity, and improvements
  • uniformity> consistent delivery of goods and services; branding
  • security> protecting data of customers, vendors, and the business
  • quality control> focusing on excellence
  • accountability > identifying who’s responsible
  • integrity > transparency, honesty, fairness
  • rapid delivery of goods > improving turnaround
  • excellent customer service> exceeding expectations
  • efficiency > refinements that lead to optimum operations

#2: Pick Your Team

While you may prefer to do everything yourself, it is imperative to engage with others when creating a plan for their knowledge, ideas, and perspectives. Every member of your team has a strength, unlike others. Some may be talented with development, while others have an innate sense of design.

You must ensure that each member has a vision for the company and their personal progress that aligns with your drive.

Look at your team and select your key players – that is, those staff members:

This team can be reconvened in the future to help with implementing your plans for the growth and development of the business.

Note that while most small business owners develop the organizational plan on their own, there may be time, staffing, or deadline constraints that make hiring an outside consultant a better choice.

#3: Review Current Business Processes

Write out each of your processes in detail. Look at what it does and how it does it. Then, list all the functions and tasks it performs as well as who does what.

Process What It Does How it Does it Executed By Functions/Tasks
Paying an Invoice Pays a Service Provider for Services or Products Rendered Through Accounts Payable System Mary Jones Enters billing information in the A/P system, which generates & prints a check

An often surprising result of this step is you will most likely realize there are differences in how the processes actually work versus how you thought they worked.

This step can be extremely time-consuming and, therefore, is why many small businesses hire a business consultant or business coach. It helps them realize a clear vision of what to expect instead of nurturing a delusion.

Thus a business consultant can actually help you formulate a more substantial and realistic organizational plan and make the necessary changes to accomplish your targets.

#4: List Tasks and Functions

Capture all the tasks and functions that your business is and should be performing. Include those things in your vision that you want the organization to do.

This process should drive out the gaps. You’ll see what is missing: perhaps where your company is lacking key pieces such as documentation, training, or analysis. It can also reveal issues and vulnerabilities (ex. insufficient safety practices or improper workarounds).

Once you have identified the factors hindering the company’s growth, you can look for viable solutions to address them. You can discuss these problems with your team and get their input.

This step can be easily combined with brainstorming to solve any existing problems before moving forward with your organizational plan.

#5: Draw Out Your Organizational Structure

organizational plan

Now would be a good time to draft an organizational structure chart. Map the current progress, your vision, the targets, all the shortcomings, and the viable solutions. Visual aids can help you, and your team determines exactly what needs to be done.

Include all the departments, roles, staff, and reporting structure. Define each section with clarity so each team, and the members consisting of them, are well aware of their responsibilities and their roles.

Simplicity and precision are the keys to defining an effective organizational plan. So you must pay attention to the details without complicating the plan.

#6: Compile Findings into Organizational Plan

The last step is to gather the collected information into one document.

Everything you have discussed and planned with your selective team should be compiled for posterity. This helps you track the progress of your organizational plan and make necessary updates or changes along the way.

Remember that your organizational plan is a part of your strategic plan for the company. It will be affected by external factors and subjected to change as per current business standards. Therefore you must prepare for such contingencies and leave room for errors or fallbacks.

Share the organizational plan with your entire staff. This might be an excellent opportunity to call a “town hall” or all-staff meeting.

Conclusion

The grave importance of an effective organizational plan cannot and should not be ignored.

If you are a new business owner, you can consult professional business consultants to devise a beneficial operational plan for your company. Even if you are a freelancer or a small business owner, an organizational plan goes a long way to help you establish your trade as a force to be reckoned with.

If you have an established business, but you know that there is room to grow and expand, you can start making an organizational plan now. You can use the steps that we have defined and seek professional help from business consultants to expand your company and increase your profits in multifold.

It is never too late to make an efficient and effective organizational plan to elevate and expand your business for betterment.

We hope you find this blog helpful in designing an organizational plan for your business.

Have you implemented an organizational plan in your business? If so, share with us what worked for you. Here’s an article on developing a Strategic Plan.

 

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