One of the most important business concepts I have learned is to work on your business, not just in it. This means, take a step back from the daily workload and strategically plan the future structure of the business when it will be many times its’ present size.
The reason I put this first is that the owner or senior managers of any small business spends most if not all of their time putting out fires and multitasking. It may feel good to be able to “do it all,” but it also the main reason your business is stuck in neutral. Ask yourself at the end of such a day, have you made progress as a business? How can you change things so that you have time to plan the next step?
The answer is to start planning to remove you from every job that someone else can do. Human resource management begins with creating the roadmap that you will follow in the future.
Let’s create the roadmap through a three-step process:
- Create an Organizational Chart
- Create a Job Description for each position
- Put a name in each box in the Organizational Chart
The first step is to create a simple organizational chart for the future “big” business. You can start simply by drawing a series of boxes on a piece of paper, with a job title in each, or download a free spreadsheet template from vertex42. Here is an example of a vertex chart:
Second, write a job description for every position. A job description is a summary of what is required for effective performance of a particular job. It is not only a useful document when it comes to hiring new employees, training existing employees, and for performance appraisals, it is a strategic document to be used with the organizational chart above.
A good job description should not be more than one page in length. Focus on what this position should be responsible for and how that will be measured. You can do some research online for job description examples, but many of them are extremely wordy and abstract. Be precise and concise!
Here is an example of a job description:
JOB DESCRIPTION – Staff Accountant
Position Title: Staff Accountant
Reports To: Controller
Scope of Position:
The Staff Accountant assists the Controller in financial reporting and administration.
Primary Job Duties:
- Process month-end balancing and journal entries.
- Complete the month-end process.
- General ledger analysis of accounts.
- Prepare monthly Standard Reporting Package.
- Extend credit to customer and handle wire transfers.
- Prepare sales tax returns for multiple states.
- Approves expense reports for employees.
- Prepare monthly inventory reports for Inventory Management.
Additional Duties and Responsibilities:
- Accomplishes all tasks as appropriately assigned or requested.
- Be able to work with Microsoft Office programs.
Measurements of Successful Performance in this Position:
- Key indicator reports and other standard reports are distributed to management based on the accounting schedule, 100% of the time, in keeping with the “On Time, The First Time” standard.
- Journal entries, month-end balancing, sales tax, expense reports, inventory reports, and payroll are accurate to an agreed upon percentage, as measured by periodic audits.
- Meets personal goals.
- Completes all assigned training and educational programs.
- Meets with his/her supervisor on a quarterly basis to discuss goals and progress.
I have read and understand the job duties and responsibilities of this position.
Name of Employee Date
Put a Name in the Box
Now that you have created an org chart and a job description for each position, complete the org chart by putting a name in each box. If you have a small company, you may find yourself putting your name in many boxes. That is great, it is a snapshot of how things are getting done in your company – and also provides you with a strategy to move your business to the next level, which we will go over shortly.
For example, below is Bill’s Bicycles Organizational Chart. There are only two employees, Bill and Fred. Fred is acting as VP of Sales and also Account Manager for the bicycle retail stores. Bill is President, and is also handling all of the production, logistics, and accounting. Quite a load!
Bill and Fred want to expand but cannot do so if they are doing everything! Exhausted by putting out fires all day, they decide that they will implement a strategic human resource plan. Starting from the bottom of the org chart, they will replace themselves as finances allow.
First they hire an Account Manager, removing Fred from that position and allowing him to find more new business. Then they hire a Staff Accountant, freeing Bill to focus more on Production and less on assembling accounting reports. Step by step, they take themselves out of the business – except in those areas where their presence is crucial and can be done by no one else.
18 months later, this is what their organizational chart looks like:
As the company grows, revise the org chart accordingly.