Recently I met with the founder of a 30-employee company that is struggling with dropping profits, missed deadlines and an increasing number of unhappy customers. He had spent a lot of time blaming unscrupulous competitors, rising costs, ineffective sales people and anything else that didn’t require him to take a close look at the way his company is being run. He was getting nowhere and called me him to help him find and fix the cause of his problems.

He looked blankly at one of my first suggestions: “Let’s look at your org chart”.

“We don’t have an org chart,” he said. “We’re too small for that stuff.”

I knew then I was on the right track.

Organization charts are a powerful tool for managing a company of any size.  It can help the transition from you doing everything to you assigning responsibility for tactical actions to others.

Whether it’s for a company, a division or a department, the org chart quickly shows who is in charge of what and how the reporting structure works. You can use it to map out the roles that are needed in your company and determine what is lacking and what might be covered by multiple people.  In the early stages of a company’s history, the process of creating an org chart forces you to think about what your company should look like instead of what it actually does look like.

Maybe most important of all, an org chart tells your employees who to go to in order to get questions answered.

In the case of the company I mentioned earlier, the lack of a formal organization picture left employees guessing about how to get information. It also meant they had to guess at who was in charge – and therefore had final decision-making powers – of each functional area. As a result, many employees came directly to the founder with all their questions. Even worse, the rest simply did nothing.

You’re never too young or too small for an organization chart. Might as well get started now. Here’s a template you can use: High Performance Organization Chart. If you already have a chart, when was the last time you updated it?

Read More In: Strategy and Leadership