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Thoughts on Organisational Charts and why organisational culture is important

Some thoughts on Organisational (ORG) Charts

organisational charts image

What Can an Org Chart Show? Or, How To Read An Organisational Chart

Why organisational culture is important? Even the traditional waterfall Org Chart can still communicate a lot about an organisation, if we reframe what we are looking at. The layers being a representation of power and certainly that’s the first thing people think of when they think Org Chart: it shows who is who’s boss.

But in a modern organisation, layers represent a scope of focus, and lines represent channels of accountability.
Granularity of Decisions
Probably the biggest differentiator between modern organisations and old, top-down hierarchical organisations is that modern organisations recognize that to be fast, to be flexible, and to make good decisions in quickly changing environments, you have to push the decisions down through the organisation to the people who are closest to the decision point, to the people that have the most timely and accurate information about what needs to be done there.
Organisational Chart explained
So one of the things an Org Chart can show you in a modern organisation is the level of granularity of decisions that any person in that organisation should be making. For example, the CEO at the top is responsible for setting the vision and the direction of the company, and those are very high-level, non-granular decisions to make. Then you have your managers who are responsible for a slightly more granular and more focused towards their specific expertise areas level of decision-making around planning, setting charters for their specific teams, and defining KPIs. Finally you have the ICs on those teams who are responsible for the super granular decisions around execution: what are we actually going to do and how are we actually going to move those needles on those KPIs, which all rolls back up into the organisation’s vision. this is why organisational culture is important.
Are you a big picture thinker or a detailed-oriented doer? Either type of person can be successful at any level, but your personal strengths on either spectrum will lend itself to being a superstar at different levels.
In this case the Org Chart is a great check and balance, because if your CEO is making decisions about how you’re executing on a single team’s contribution to the vision, that’s not something your CEO should be doing. That is at worst a misuse of power and at best a huge distraction from what the CEO should actually be doing — execution details are definitely not the most effective way for them to be contributing to the organisation!!!
And it also works the other way for ICs coming into the organisation and looking at their career path. At what level do they want to make decisions and contribute to the organisation? The Org Chart gives them an idea of where they are and where they need to get to in order to make that kind of impact and do that kind of work. And some people want to be in the granular details forever and that’s ok too, there should also be career growth paths within those IC levels. Just one more reason your level on the Org Chart shouldn’t be equated with power or seniority.
Type or Kind of Role
An Org Chart can also show who are managers and who are individual contributors within the organisation. This seems like it should be obvious, but in practice in fast growing startups, it’s harder than it seems, or at least making the right decisions based on this information is harder than it seems.
We just love that superhero CEO trope don’t we? So much easier to build a personal brand on making yourself look successful than it is to build one on making thousands of other people actually successful at their jobs.
The difference between manager and IC is important thing because those two kinds of people within the organisation should be judged very differently. Individual contributors are judged on their personal execution and how their efforts are contributing to moving the needle on certain factors within the organisation. But the manager should be judged on how well their team is able to do their jobs. A manager should never be judged, and should never judge themselves, on their personal contributions to the organisation above that of their team.
This is something that especially people first moving into management really struggle with, but that organisations moving from that everybody-wears-a-lot-of-hats phase also repeatedly drop the ball on. As people’s roles shift and change in a growing organisation you can end up with this kind of legacy issue; with people who are now managing people still judging themselves or being judge by the organisation as if they are still that lone individual contributor. People can struggle to get their manager legs back on even if they’ve managed people before and they know better.
Channels of Accountability
Finally, the Org Chart makes clear what the channels of accountability are. I want to be really clear about this because in old-school Org Charts the line between you meant that your boss was in charge of you. They got to tell you what to do, and you were accountable directly to your boss. That is not true in modern organisations, especially data-driven organisations (or data-informed, if you prefer). The idea now is that every individual is accountable to the organisation and for how their contributions move the organisation’s metrics.
Individual Contributors are accountable to the organisation, first and foremost, but managers are highly accountable to their reports for communicating the organisation’s vision down to them and contextualizing it for their specific scope within the organisation. This is reflected in what managers are first and foremost accountable to their reports for: for communicating a team charter; for communicating clear KPIs that affect the company’s vision; for enabling them with a healthy team structure, tools, resources and information they need to make good decisions regarding the KPIs; and for unblocking them and helping them work across the organisation when necessary to affect those KPIs.
Those are all things that the manager is accountable to their reports for. In comparison, the manager acts only as a channel of accountability on behalf of the organisation — reviewing performance, granting raises and promotions, and executing hiring/firing decisions — all based on whether or not people are contributing to the organisation’s goals and working with the team as expected.
Where do we go from here?
So we’ve redefined what you are seeing in Org Charts, what that means in a modern organisation and how you should be using it to communicate. Hopefully seeing what these can contribute even in modern, fast-changing organisations has convinced you that you do need one.
But even I’ll admit that maybe the traditional Org Chart just has cultural bias that’s built into it, and even reconfiguring our communication around WHAT the Org Chart is meant to show doesn’t solve all the problems I mentioned originally.
The “flat” organisation is a great example, because the thing is, I don’t think an Org Chart CAN represent this. It has almost nothing to do with your structure, and everything to do with your culture — with what informs your decisions, how you structure the conversations around decisions, and how you communicate those decisions. You could have an organisation with 20 layers, and if it does those things well, it will be more “flat” and fair and open to everyone’s ideas than an organisation with zero layers that only listens to 3 or 4 people all the time and can’t communicate the structure for how it makes decisions. As any of us that have worked at so many of those supposedly “flat” organisations can attest to.
But saying that being “flat” and inclusive has to do with the number of layers is confusing correlation with causation. Older organisations are more likely to have more layers, because they are bigger and have more people. And older organisations, for the time being, are also likely to be more top-down hierarchical, because we’ve only started playing with new models in the last 40 years~ish and only really succeeding and scaling with them in the last 20. And yeah, smaller organisations are likely to have less layers and feel more inclusive because consensus-based decision making can still work at sub-25 people. But I don’t know how a traditional waterfall Org Chart is ever going to capture that kind of political or cultural information.
Another thing that old-school Org Charts have lost when applied to modern organisations is the map of how communication works within the organisation. Waterfall Org Charts did used to represent how communication worked in old hierarchical organisations, because teams didn’t laterally talk to each. But we do that all the time now in modern organisations because it would be too inefficient to ask your manager to talk to their fellow manager to talk to their people to go all the way back through that chain with the information. There’s just a ton more lateral communication happening across teams, and we’ve just totally lost that mapping of how does communication work at this company? I think it’s one of the reasons good communication seems to be one of the first things that breaks down for startups as they grow. It seems almost unavoidable.

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This guide is only an aide memoire and intended for information only for anyone appraising the documentation needed in an audit/compliance check. It is not to be considered as direct advice or intended to replace specific 1 to 1 engagement with your compliance and risk professional.

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