By: Paul Van Metre
You have a new shop with less than 10 people, (or perhaps you have a 20+-year-old shop) so why would you possibly need an org chart?!? Isn’t that something that big companies use for middle managers to fiddle with to pass the time? I once thought the same thing as you, but as I got “schooled” about why my shop wasn’t growing as fast as I wanted, my eyes were opened to the error of my ways. The reality is that only 45% of companies survive past 5 years, and 72% of companies have fewer than 10 employees. This is because companies past their toddler and adolescent years have learned important lessons to grow past those inflection points and the different things that are needed to break through different levels of growth. What will get you to 15 people is vastly different than what will get you through 50 employees and higher.
Most small businesses are started by people who are experts in their craft, with great technical skills for doing the job. I know countless machine shops that are started by someone who is a very good programmer/machinist with the guts and gumption to start their own shop. I also know countless shop owners who have been in business for 20+ years and still employ less than 10 or 20 people, despite their best efforts to grow (by the way, there is NOTHING wrong with running a small shop if that’s what the shop owner wants. A small, lifestyle business can be a beautiful thing.) The common theme with these shops with dreams for growth is that the owner is really good at the technical aspects of running their shops, but has little to no experience or schooling in running a business. It's no fault, just lack of prior experience.
One of the keys to growing a larger and more scalable business is envisioning and systematically planning for what the company will look like in its larger form. Do you want to have a 50 person shop? Great, then you need to design what that 50 person shop will look like, and how it will operate to ensure repeatable, consistent performance in meeting and exceeding client expectations. Who will be responsible for what? What are the metrics for good performance? What are the closed-loop improvement systems to ensure continuously improving client satisfaction? This is where the org chart comes in.
When you’re a shop of just a handful of people, and everyone wears many different hats, things more or less get done, and most (hopefully) jobs get to where they need to go on time with good quality. When you’re 50 people, the same structure won’t cut it and things will start to significantly break down. More defined structures, responsibilities, and systems are necessary to ensure performance.
When a future state org chart is created, it becomes more feasible to define each and every role, the required skills, the duties, and responsibilities, keeping in mind what systems should underpin the entire operation. Just like a well-run franchise like McDonald’s or Starbucks??, the key to client satisfaction is providing repeatable, consistent client experiences. Without systems to ensure this continues to happen while the company grows, client experience will always suffer, clients will leave, and growth will stagnate. When a well defined org chart is created along with all the corresponding roles and responsibilities, and it helps to structure the hiring, training, and promotion of employees in the company, that consistent client experience will not be elusive and the natural result will be the growth of the company.
This is easier said than done. Getting out of the daily scramble of urgent client demands and working on building the systems of the business is no easy task. Even on a small scale, the delegation of responsibilities and tasks is key to finding a few precious minutes per day to work ON the business, not just IN the business. One easy step I can recommend is to read the book “The E-Myth Revisited'' by Michael Gerber. It’s an easy read in a novel format about how to design a business with the systems and principles needed to allow a business to grow. It helped us shape our shop and the principles helped us grow to 75+ people before we sold it. A next step could include blocking out time in your day to spend working ON the business. Even just a couple of hours a week of dedicated time can help you make great headway on your business goals.
First of all, ProShop will dramatically reduce the time you spend on clerical tasks and keep things from falling through the cracks - causing everyday chaos in your business. So you’ll have more time to work ON your business while your head is clear, knowing that things on the shop floor are taken care of and running smoothly.
Second, ProShop has all the features and modules for you to define all those roles in the company, build the org chart as it looks today, and what you want it to look like in the future so you can envision what this looks like.[/vc_column_text][vc_single_image image="6832" img_size="full" alignment="center"][vc_column_text]You can also then define all the training requirements for an employee to be considered fully trained in each role so that when you hire employees, the onboarding process is easy and clearly laid out. This provides a roadmap for what roles you’ll hire in the future, and how the duties and responsibilities will be divided up. It also provides a path to advancement for employees who are go-getters!
Running a precision job shop is one of the most difficult jobs in the world! But it’s also one of the most important! Precision manufacturing is at the foundation of the entire economy and has the highest multiplier effect of other jobs in the economy. It’s essential to allow those shops to grow to the size that the owners want them to grow to. Planning out what the future of your business looks like is an essential part of that growth. Envisioning what your Org Chart will look like is a key part of achieving those future state goals.