By Trent Lee — The CEO’s Sage
Part 6 of the Hitting the Ceiling Series

Most companies have an org chart.

I'm not sure most companies get much value from it.

Typically, it shows names, titles, and who reports to whom. That's helpful, but it doesn't answer the more important question:

What is each of those people actually accountable for?

That's why I prefer the term Accountability Chart.

An Accountability Chart does two things. It defines the structure of the organization, and it identifies the specific outcomes and responsibilities each box owns.

As organizations grow, getting this structure right becomes one of the most important abilities of the leadership team.

I have found that most every business problem comes from a people problem, and most every people problem comes from an organizational structure problem.

Wrong person. Wrong seat. Unclear accountability. Conflicting authority. Or simply a structure the company has outgrown.

One Box, One Owner

One of my simplest rules is that you can't have two people in the same accountability box.

You can't have two CEOs. You can't have two VPs of Sales accountable for the same result.

When two people are accountable, eventually nobody is accountable.

It's perfectly acceptable, however, to have one person sitting in multiple boxes.

Your Chief Revenue Officer might also occupy the VP of Sales box. A Sales Manager might also carry an individual sales territory.

The distinction matters.

Each box has its own accountabilities. When someone occupies two boxes, they should think about and evaluate their performance in each role independently.

It also tells us something about future hiring.

During quarterly reviews, one of the first places I look is where one person occupies multiple boxes. As the company grows, those are often the first roles we need to separate and backfill.

Everybody Gets One Boss

Another rule I prefer is no dotted lines.

People can collaborate across departments. Someone in finance might influence sales decisions, and HR may support leaders throughout the company.

But ultimately, every person should know who they are accountable to.

Matrixed organizations can look sophisticated on paper, but unclear authority creates confusion surprisingly quickly.

And this isn't just for large companies.

If you have four employees, you need an Accountability Chart. If you outsource accounting or marketing, put those functions on it too.

In fact, treating outsourced partners like part of your Accountability Chart often improves their performance. We sometimes get frustrated that an outside firm isn't delivering what we expect, while never defining their accountabilities as clearly as we would for an employee.

Every Business Has Three Legs

Regardless of industry, most organizations ultimately have three fundamental legs.

Sales, generating demand and bringing business through the door.

Production or Delivery, creating the product or delivering the service the customer purchased.

Administration, supporting the business through finance, accounting, HR, legal, and other infrastructure.

As the organization grows, those three legs expand and people become more specialized.

That's natural.

The danger is allowing layers to multiply unnecessarily. Eventually you have managers managing managers who manage other managers, while leadership gets farther and farther away from the customer.

Growth should allow you to push appropriate decision making down into the organization, not continually pull it upward.

Build Tomorrow's Team

One of my favorite Accountability Chart exercises is to stop looking at today's organization and ask:

What organization will we need 18 months from now?

Think like a football coach taking over a team built around the running game when you know the future requires a passing offense.

You don't start by looking at your existing players and designing the offense around them.

First, determine what the future offense requires.

Maybe you need two great receivers, a running back who can catch out of the backfield, different offensive linemen, and a quarterback with a great arm.

Build the structure first. Then put your current players on the sideline and decide who earns each position.

Some will fit perfectly. Some can develop into the role. And occasionally, you'll discover you don't currently have the player you need.

That's an important realization.

Too many organizations design tomorrow's structure around today's people. They change the box because they're afraid to acknowledge that the person currently occupying it may not fit where the company is going.

The better approach is to define the future first, then help your people develop toward it.

One of the best talent strategies I've heard is simple:

Grow your people faster than they can outgrow you.

And when you can't, you have to be willing to draft new players.

Final Thought

Structure isn't hierarchy for hierarchy's sake.

It's clarity.

Who owns what? Who answers to whom? What does success in each role look like? And, most importantly, is the organization we're building capable of taking us where we intend to go?

Review your Accountability Chart quarterly. Look closely at people occupying multiple boxes. Challenge unnecessary layers. Clarify outside partners. And periodically build the chart you will need 18 months from now before looking at the people you currently have.

Don't build your future organization around today's roster. Define the team you need to win tomorrow, then develop, recruit, and position your players accordingly.

That's the leadership ability to Structure, and another way growing organizations break through the ceiling.

About the Author

Trent Lee is a Vistage Chair, leading CEO peer groups, and helps business owners escape founder dependency and scale sustainable companies using the Value Builder System and strategic execution coaching.

Want to learn more about building a business that can execute, scale, and create long term value?

Visit www.compassleadershipadvisors.com

or connect on LinkedIn: https://www.linkedin.com/in/trentrlee/