All Practices have an organizational structure in place, though most of them are informal and not documented. Having a written, formal organizational chart can play a major role in the development of your staff and the successful growth of your Practice. It can serve as a blueprint for the development of the management team, a roadmap for hiring/developing employees, a tool to improve the access/flow of information and a process framework to increase productivity /operational efficiency. The organizational chart provides a visual method for communicating valuable information to all employees.
Initially, when the Practice is a small entity, the staff fills multiple positions. As the business expands, it is critical for the Practice owner to identify and/or hire people who will take the Practice to the next level of continued success. An organizational chart is a navigational tool and is instrumental in guiding the Practice owner to objectively look at prioritizing the needs of the business. The Practice owner endeavoring to allocate responsibilities, activities and management authority to various employees also has to make certain that he/she coordinates the activities of those employees to avoid gaps and/or redundancies in operations and management. Filling positions in the organizational chart with people who have the skills to lead specific areas, do jobs that are necessary for organizational performance and empowering them to own key responsibilities, enables the Practice owner to spend more time thinking creatively and strategically about the Practice – a very fluid team. The organizational chart will provide the Practice owner with a reliable indication as to whether the Practice is positioned to meet future business goals.
An organizational chart shows in a visual illustration the structure of an organization: the reporting relationships, levels of management and divisions of work by departments/ functions and positions/jobs – and how they interact with one another. It depicts the chain of command (decision-making process), distribution of authority (who has authority within departments) and span of control (how many people a manager supervises) It can be drawn hierarchical, matrix or horizontal (cross-functional).
An organizational chart is ideal for sharing the Practice’s strategic vision, as well as defining responsibilities and dependencies in a concise manner as it is currently structured and respond to changing conditions and opportunities. The organizational charts should be linked back to spreadsheets for planning, budgeting and workforce modeling for the Practice. Workforce planning assists the Practice owner in determining the correct structure (is the organization aligned with business goals?), allocating resources accordingly (do we have the right number of people with the right skills, experiences and competencies?) and revision (assessing is this working and not working?).
Organizational charts are evolving to an innovative design that provides insights into the organization’s informal groups by mapping and measuring relationships and information flows between people, groups or knowledge-processing entities which is vital in many Practice settings. The development of forming cross-functional partnerships for sharing ‘institutional’ knowledge will transform one’s Practice. It is important that as a Practice documents and relies on organizational charts, it must continually review and update the ‘snapshot’ picture of its reporting relationships, divisions of work and levels of management to reflect current business realities and be positioned for future opportunities.