As business owners we tend to wear 10 hats in our business- how can you reduce those hats?
These are the 10 hats – aka departments – in EVERY business. These are as follows along with a brief description of the accompanying role:
- Shareholder – finances the business
- Director – maximises shareholder value
- Leadership – implements the plan effectively
- Product / Service Development – develops the products or services for sale
- Operations – generates revenue
- Marketing – generates leads
- Sales – converts prospects into customers
- Finance – manages the money
- HR – enrols and engages the team
- Admin / IT – maximises efficiency
To further clarify, the shareholder and director departments, are strategic in nature. These roles demand a long-term outlook as they are instrumental in charting the business’s future direction. Below them fall the operational departments, starting with the leader (CEO), who is supported by the heads of the remaining seven departments. The mandate of the operational departments is to execute the strategy.
The question is which of these hats are you currently wearing? Or perhaps you’re trying to wear all ten hats at once? That said, I’m reminded of the fundamental principle, you can be anything, but you can’t be everything; a concept with which some of you are likely familiar. Even if it’s new to you, you understand that as much as we’d like to pretend we’re superheroes, we’re only human after all, and it’s simply not possible to do it all. So, what’s the solution?
In short, redefining your organisation structure, including the functions, roles, and expectations of each department or Hat. Getting your organisation structure on track enables you to remove some of those hats and hand them over to the relevant team member, ultimately freeing up your time and capacity, and reducing your stress levels so that you can focus on the big picture.
The four key principles of a healthy organisation
Before we drill down into the functions and responsibilities assigned to each hat, let’s consider the four key principles which are vital to developing a workable organisation chart.
- There can only ever be ONE leader of the business and ONE leader of each department. One person may be able to wear multiple leader hats – for example, a CEO or Sales Manager – but two people can’t lead the business or lead one department; otherwise there is confusion regarding accountability and to whom the team should report.
- There’s a big difference between doing something and being responsible for it. Bottlenecks often occur because someone thinks they must complete every task for which they are responsible. When you delegate a job, you’re still responsible for it; you’re just no longer the one DOING it.
- Roles before people. Get clear on who is doing what, but don’t shape a role around a person.
- Function determines responsibility. To fully understand into which department each key responsibility fits, it pays to first examine each department’s function.
Function determines responsibility
Remember the fourth key principle of the 10 Hats? Function determines responsibility.
If you’re not sure to which department a task belongs, refer to the function of that department. Work out what roles you need within each department, bearing in mind that some positions could be part-time or contracted out. Then create a list of key responsibilities for each role.
For example, the function of the Operations department is to generate cash. So, say you have someone in your Operations team making calls to slow paying debtors. Ultimately, it’s the function of the Finance department to manage the cash, so this task could be passed to your Finance team, freeing up the Operations team to generate more cash.
Likewise, you may have Operations team members handling administrative tasks which are aimed at increasing efficiency when boosting efficiency is, in fact, the function of the Administration department, meaning you ideally need to migrate these tasks from Operations to Administration.
Benefits of a revised Organisation Structure
In the light of these brief examples, can you picture how clarifying the finer aspects of each role can help streamline your organisation structure?
When you undertake this process across all 10 departments of your business, the results are exponential. Clear job descriptions will strengthen expectations, priorities, reporting lines, and much more. This simply is best practice and ensures that no department is neglected, ultimately building a more sustainable and scalable business.
And when you, as the leader, identify which hats you’re wearing, you can act above the line and delegate those tasks that perhaps you don’t have the capacity or skill set to do well. This can be a truly empowering experience on a personal level. It’s also an opportunity to empower your team members or at least clear the path for progress.
To summarise the benefits of revising your Organisation Structure are as follows:
- Roles and expectations are clarified,
- You can quickly implement best practice,
- No departments get neglected,
- Your business becomes more sustainable and scalable,
- Less risk of burnout,
- Increased efficiency,
- Enables pathways to progress,
You, as the leader, are no longer inundated with non-critical problems.
Maybe it’s your propensity for micromanaging your team, your fear that only you have the best interests of your business at heart or your reluctance to delegate tasks which are driving you to try and wear all ten hats at once. Trying to do it all will lead to burn out and bad decisions.
As part of our monthly Lunch and Learn we conducted a workshop on the 10 hats business owners wear in their business. The session will be re-recorded so we will shortly have a video link on our website.
Don’t allow your wanting to do it all keep you from working smarter and taking your business to the next level. Contact SMART Business Solutions today to discover how we can offer your business the support and accountability required to improve.
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