From Michael Gerber’s “The E-Myth Revisited”
Why Do You Need an Organizational Chart?
- “Everyone wants to “get organized.” But when you suggest that they start by creating an Organization Chart, all you get is doubtful- and sometimes hostile- stares.” (p. 166)
- “Don’t be ridiculous,” a client once retorted. “We’re just a small company. We don’t need an Organization Chart. We need better people!’ “I knew that the organizational development reflected in the Organization Chart can have a more profound impact on a small company than any other single Business Development step.” (p. 166)
- “What Jack and Murray don’t understand is that without an Organization Chart, everything hinges on luck and good feelings, on the personalities of the people and the goodwill they share.” (p. 169)
- “Without the Organization Chart, confusion, discord, and conflict become the order of the day.” (p. 182)
- “Because it’s critical if you are to begin your business all over again that you’re able to separate yourself from the roles you need to play. To become independent of them, rather than these roles becoming dependent on you.” (p. 184)
How to Form an Organizational Chart
- Each person should write down what their “Primary Aim.” is. Each person should write down what their goals and dreams are for the company.
- You should write down who the Shareholders are. Each Shareholders should describe what their roles are outside of the business.
- You should write down the job titles of COO, VP, Managers, etc. Under each Title you should write down what the responsibilities are.
- Once the chart has been finalized, you should write down who will take each title.
- “It is a contract, rather than just a description, between the company and an employee, a summary of the rules of the company’s game.” (p. 174)
Other Good Quotes:
“Tactical work is all the work technicians do. Strategic work is the work their managers do.”
“If Jack and Murray’s business is going to thrive, they have to find other people to do the Tactical Work so as to free Jack and Murray to do the Strategic Work” (p. 179)
“Jack and Murray go to work in their business. But now with a difference. They are no longer interested in working in their business. They are now focused on developing a business that works. To do that they begin to work in an entirely different way.” (p. 179)
“Murray and Jack start building their business by looking at each position in the business as though it were a Franchise Prototype of its own.” (p. 180)
“the Sales Operations Manual contains the exact scripts for handling incoming calls, outgoing calls, meeting the customer at the door. The exact responses to customer inquiries, complaints, concerns. The system by which an order is entered, returns are transacted, new product requests are acted upon, inventory is secured.” (p. 180)
“Only when the Sales Operations Manual is complete does Murray run an ad for a salesperson. Not a Master Technician. Bu a novice. A beginner. An Apprentice. Someone willing to learn what Murray has spent so much time and energy discovering.” (p. 180)
“as Murray interviews the candidates, he shows them the Sales Operations Manual and Widget Maker’s Strategic Objective, and explains how they were created and why.” (p. 181)
“Murray has taken the most important step in feeing himself from the Tactical Work of his business. Murray has replaced himself with a system that works in the hands of a person who wants to work it. And now Murray’s job becomes managing the system rather than doing the work.” (p. 182)