A wise colleague of ours always said, “80% of business problem can be attributed to inappropriate structure”.

Yet we often hear business owners proudly say, “We have a flat management structure”. They see it as a symbol of the friendly, accessible and chatty nature of the business that they run. But as a structure for a large and growing business, it may well be inappropriate.

Businesses that need to address structure and conduct may show the following signs:

• The owner has employed managers and experts in their field. He or she assumes that they will know what is expected of them and how they should do their job. But somehow, this does not occur, and his new people eventually disappoint.
• There are no written policies and procedures. Where they do exist, they are out of date, in manuals on dusty shelves and not known by the staff that is expected to know what to do.
• There are no written, meaningful or up-to-date job descriptions for any of the staff. People do not receive regular or structured performance reviews. They do not really know how they are going, apart from the occasional on-the-fly comment from the owner.
• The business is people dependent, not systems dependent. If a key person were to leave, get sick or die, the business would suffer immensely. When staff change, there is a steep learning curve for replacement people due to lack of acclimatisation, mentoring, training and documentation
• Staff are frustrated, demotivated and dis-empowered. Staff turnover is increasing, and individual productivity is falling.
• Meetings are not run properly. The owner is often key to the meeting yet is frequently absent due to more pressing issues. Proper “action” minutes, conduct and follow up are not practiced. Often a waste of time.
• That friendly “flat” structure means that all decisions must go via the owner at the head of the tree. Fine for small businesses but as the business grows; the owner becomes a bottleneck to effective management.
• A more tiered structure may exist but not be real. When accountability and responsibility is built to suit the people rather than the roles, the structure can end up like a “spaghetti tree” with lines running all over the place. This is very common in family businesses where non-performing people block a business structure.

Clearly, these are critical issues to get right. To use the words of our wise colleague again, “The right structure plus proper conduct delivers business performance”.