Organizational charts — not be to confused with organizational strategies — typically are deterrents for independent advisory businesses.
Because many owners don’t understand organizational strategy, they create an organizational chart with boxes and names on it. But this chart sends the wrong message to employees and creates a working atmosphere that prevents businesses from reaching full potential.
Virtually all the organization charts I’ve seen used in the independent advisory industry are what’s called “vertical organizational charts.”
These charts typically show a pyramid shaped diagram with each row of employees positioned below the person or job title they report to, with the rows getting shorter as you move up the pyramid.
The problem with a vertical org charts is they give the impression that the positions grow in importance as you move up the pyramid. This may be an accurate picture of a manufacturing business; in service businesses such as advisory firms, though, it couldn’t be more wrong.
The Issues Worth Noting
When you’re in the business of providing services, your success depends on the actions of every employee — from the owner to the receptionist.
When clients and/or prospects get poor service from any one of your employees or advisors, you run the risk of losing not only that client but also all the referrals they may have sent your way. If you run a future value calculation on this loss, it’s a big number.
Thus, owners should think about their employees in a different way. The perspective of each employee depends upon each of their employees.
From that vantage point, a number of things come into a different focus.