Why do we have an organizational chart? The answer is simple. It exists to ensure efficient and effective governance.
From the business owner or chief executive down, they govern the daily activities of the employees to ensure the vision, mission and values of the business are executed. Unfortunately, what happens is as Jim Collins wrote in “The E Myth,” business people become so involved in working IN the business they fail to work ON the business.
Governance requires having all policies, procedures, processes and operations documented in writing and then faithfully followed. If changes happen, then these changes must be immediately incorporated into the existing policies to ensure clarity.
Another aspect of governance is enforcement. Leadership at each level of the organization must consistently enforce governance. Again, what happens is many instances enforcement becomes selective to “willy nilly.” These types of lackadaisical enforcement create disengaged employees, weaken the organization’s structure, reduce productivity and ultimately decrease business growth.
As more and more businesses expand across regional, state, national and even international borders, effective governance becomes even essential. Each geographic location must adhere to the same policies within operations. With remote workers becoming more prevalent because of technology, governance is for some in leadership like “herding cats.”
This governance becomes sometimes confusing as well as conflicting due to compliance and local to international laws. Here is where having a labor attorney as well as an intellectual property attorney may help to ensure consistent governance.
Finally, governance does extend to social media. Possibly this may be one of the more difficult areas for leadership to exercise governance control. Having a social media policy that has been legally vetted through a labor attorney along with strict information technology expertise to govern against hacking and viruses is now a best practice for small business owners and executives.
Governing a single office/home office to a small business to a 500-plus-employee organization will always be part of the organization’s structure. When that governance is clearly identified, then miss steps by all employees are far less likely to happen.
Next week, the column will examine the structure of a business and how that structure supports sustainable business growth.
Leanne Hoagland-Smith is an author, speaker and executive coach. Her weekly column explores issues that impact the bottom line of firms with fewer than 100 employees. She can be reached at 219-508-2859.
