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For our growing small business, should we focus on a formal or flexible organizational structure?

Answers

Topic Expert
Keith Perry
Title: Consulting CFO and Business Operations A..
Company: Growth Accelerator
(Consulting CFO and Business Operations Advisor, Growth Accelerator) |

Formal: flexible structures are cool in theory. However the basics (who is my boss? Who signs a contract?) really need to be drawn clearly, especially when you are growing. You can move the lines around daily if you want, but knowing how to get things done once you get past the "two squirrels and a nut" phase means that you have *some* formality.

Flexible structures do have their place, especially when you are doing new projects or programs, or you need for one person to do three different jobs. Allowing for that...make sure that at the end of the day, everyone knows who their one real go-to person is.

Topic Expert
Scott MacDonald
Title: President/Owner
Company: AlphaMac Resources, Inc.
(President/Owner, AlphaMac Resources, Inc.) |

My experience is that small companies have difficulty following a formal structure. Small companies typically have to have a group of generalists who can do multiple jobs. Therefore, trying to build a formal structure is next to impossible.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Every business is different. The depth of the hierarchical organizational tree is based on the culture that is created by both the Owner, the industry and the individuals themselves.

In the 70's I was an avid Inc. Magazine reader. They always highlighted unique businesses with exceptional growth and business structures. Problem was, they were unique to "that" business and for the most part couldn't be transferred.

In the final analysis, created a structure that works for you, but be dynamic; because your business will change, and if you can't change to meet the needs you are out of business.

Topic Expert
Randy Miller
Title: Partner
Company: CFO Edge
(Partner, CFO Edge) |

Even a small company can and should have a formal organizational structure. Each person should know where they stand in the company, and who they report to. The structure provides the framework for the flexibility and the accountability to make sure that employees still get their main job done. Flexibility without the structure can breed confusion (who do I report to?) and sometimes a convenient excuse for not completing a required task (I was working on... instead).

The difference is the culture that you build. Beyond the structure you need to build a culture where people are encourage to seek out answers, build collaborative solutions to problems, and exchange ideas to move the company forward.

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