Business Blog No. 6 – Organisational Structure

The next step to set your business up for success is to get your internal organisational structure set up. Successful enterprises are powered by the right people in the right roles covering all the key disciplines of the business, including the day to day running of the business itself. You might recall that I have mentioned ‘brainstorming’ a number of times in this blog series so far? It is your management team that you should be doing these processes with.

The key four pillars of a senior management team are the CEO, Sales and Marketing Manager, Chief Operations Officer (COO) and the Chief Financial Officer (CFO). Other management team roles can include Quality Manager, IT Manager, Technical Manager and HR Manager and these roles should also be involved in the strategic planning brainstorming process.

The head of the management team is the CEO. The CEO him/herself is expected to have a skill mix covering five key areas:-

  1. Strategy
  2. Leadership
  3. Commercial
  4. Operations
  5. Finance

In the SME sector, typically a CEO’s strength will be in the operations or commercial areas, particularly if the CEO is the founder or owner of the enterprise. The CEO’s skill set may need specialist support in the finance and strategy area if this is the case. This is where ensuring quality personnel are in the key roles either within your organisation or as part of your external advisory team (such as a Part-Time Virtual CFO).

Choosing an appropriate organisational structure to support the senior management team is essential. The most common organisation structure is the functional structure whereby departments of like functions are grouped in a traditional top-down hierarchical structure. Modern structures to ensure agility and efficient communication have arisen whereby various departments work in tandem to a common aim such as at a divisional level, or a new product/service grouping. The matrix structure is a dual reporting dotted line structure with a blend of traditional functional lines along with product or divisional reporting lines.

Use this week to consider which organisation structure best suits you and your entity to build a sound foundation for business success. Next week it will be time to get into the strategic plan itself.

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