Laying the Foundations: How to Create a Management Structure that Allows Your Business to Grow

Estimated reading time: 3 mins

The best way for business owners to prepare for expansion is to address organizational weaknesses before implementing new growth strategies. This often involves creating a more efficient and effective management structure. Read on to find out how to get started.

Identify Problems

Identifying organizational weaknesses that could be contributing to financial losses gives business owners an understanding of what they need to change. The easiest way to get started is to commission a Service Organization Control (SOC) report. Contact a professional who provides detailed SOC Audit Consulting.

Define Structural Changes and Goals

Once business owners understand what problems need to be addressed, they can come up with detailed, well-defined goals for positive structural change. When these plans involve expanding to new areas, adding products, or changes in management structure, it’s important to be transparent with all the company’s existing managers and executives about what they will entail.

In some cases, just tweaking the company’s current organizational structure will be enough. Serious growth may require serious changes, though. They may include delegating new responsibilities to existing managers, hiring new staff, or even opening new offices or stores, but no matter what, everyone should be on-board.

Adopt a Value Stream-Based Structure

A value stream organizational structure will make it easier to keep track of employee performance, encourage team collaboration, and keep the business running smoothly. Most companies feature many disparate departments, including accounting, production, and human resources. Value stream structures focus on how these different departments operate together to help the business thrive.

Growing businesses can often benefit from layered structures. This accommodates the complexity of modern manufacturing, retail, and other workplace environments. Layered structures can also lead to economies of scale, further improving efficiency, and make it easier to evaluate the effectiveness of existing management structures and employees.

Evaluate Employee Performance

One of the great things about switching a company to more efficient organizational structures is that it helps executives evaluate manager and employee performance by linking organizational and functional goals to individual performance. As the organization grows, certain managers will have to take on new roles and responsibilities, so make sure everyone in the managerial chain is performing periodic internal performance evaluations.

Managers who are falling behind or having trouble keeping up with changes can be provided with ongoing employee education. Those that are thriving in the new organizational framework could be tagged for future promotions. In the end, everybody wins as the company’s operations become more efficient and the business continues to grow.

Encourage Teamwork

Changing organizational structures can also facilitate increases in collaboration not just among managerial staff, but also among low-level employees. Following up on a SOC audit and the subsequent structural changes with periodic performance evaluations allows managers or executives to identify managers that could benefit from additional training and teams that might want to participate in team-building exercises.

The Bottom Line

Most business owners don’t start out with large, thriving companies. They start as aspiring entrepreneurs with small businesses, few employees, and simple structures. As those businesses’ products or services grow in popularity, the company also grows and things can quickly become complicated. Simplifying and reorganizing managerial structures clarifies each person’s role and responsibilities, facilitates collaboration, makes it easier to identify potential organizational weaknesses, and encourages even more growth. Hire a consultant that can help today.

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