Is your team confused about responsibility, hierarchy, or who reports to who?
Do you have a clear idea of where there’s room to give a promotion, or which department could do with more hires?
You need to make an organizational chart for your business, no matter what size your company is because it ensures your company can scale consistently with a clear view of its structure. It’s just as important as solid processes because it’s the single source of truth for the architecture of your business.
In this article, I’m going to show you how to create organizational charts using simple free tools, or powerful paid alternatives.
- The definition and components of an organizational chart
- The hidden benefits of organizational charts, and why they’re not just a formality
- Creating a cloud-based organizational chart in Google Sheets that you can automate
- How to use templates to create a simple org chart in Word, PowerPoint, Excel, and dedicated diagram tools
- How to use different types of charts for alternative organizational structures, like matrix and flat
What is an organizational chart?
An organizational chart — or, for some reason, an organigram — is a diagram that illustrates rank, responsibility, and information flow in your company. As Business Dictionary puts it, “power travels downwards and answerability travels upwards”.
Here’s a very simple example, illustrating upper management and the departments they lead:
And here’s a more complex specimen, including departments, individuals, and even descriptions of job functions:
As you can see, it makes it easy to see which branches report to which department heads, and which departments perform which function.
Why do you need an organizational chart?
Businesses have so many moving parts that it’s necessary to have a single source of truth. If you let responsibility slip into informal, half-forgotten guidelines, you’ll notice teams missing deadlines, information getting lost, and disagreements over authority.
With an organizational chart, it’s 100% clear who reports to who, who has authority over which teams and members, and where information should be going to and from.
Documented organization structures also double as a roadmap for current employees to use to see where their next promotion may be, improving employee motivation.
Often, small businesses choose not to create an organizational chart because the employee count is low, or because it seems like a waste of time in comparison to core business functions. In reality, organizational charts are a way to future-proof your business as it scales, ensuring consistency and a concrete document to refer back to in case of confusion.
Finally, organizational charts also serve as a way for you to see holes in your company’s structure. Too many people reporting to one manager? Not enough testers on one particular software team? You’ll see when you map your organization out.
How do you make an organizational chart?
For the first sketches, you can use any diagram tool you’re comfortable with (or even a pen and paper) to make an organizational chart.
Source:: Business 2 Community