This post is part six of Dan Pestretto’s seven-part systemization series. Read on to part seven, “Systemization Series: How to design a system,” here.

Last week I cruised over the importance of having a well-defined description of the future business you intend to create.

You could think of it like, “How do I want this business to be running when I am ready to sell it or hand it off to my kids or employees?” This is called your strategic target, and an organizational chart is a graphic image of the positions in your company when you have hit your strategic target.

This strategic target is a factual, detailed, written and publishable description of your business. The document, which I advise you hang on a wall in your office, addresses questions such as:

  • What will your best clients be like?
  • How many will you have?
  • How many services will they purchase?
  • What will the customer experience be like?
  • How profitable will you be?
  • How many employees will you have?
  • What will your employees say about what it is like to work there?

By having this document, you have a far better chance of achieving your objectives than if you don’t. It makes perfect sense because if you don’t really know where you are going, how are you ever going to get there?

With a clear vision of what you’d like your business to become, you can create an org chart of that future business. This is something you make up when you put your first five-year plan together. In too many instances, though, it sees the light of day, like … never?

But it should be a critical tool.

The org chart helps you understand the required human resources to accomplish your objectives. It provides a strategy for growth in terms of what position you need to fill next and what you have to do to get that hire up to speed quickly. It also illustrates the functional accountability of your business. Consider which positions are accountable for getting the business (sales); which ones are accountable for doing the business (operations); which are accountable for running the business (administration); and which positions are tasked with guiding the business (management).

So many business owners look at an org chart as a useless tool. You might be one of them if you’re thinking, “We don’t have many ‘people’ so we don’t need an org chart.” Wrong.

The org chart does not represent “people.” It represents “positions.” And every company, no matter the number of employees, needs an org chart to establish and define the functional accountability for the four core functions of the business.

Each position is expected to perform a function, and the employee filling that position is accountable to that end. Each position on the org chart needs a job description describing what it is they are expected to do and how they are expected to do it.

At this point, you should be brainstorming how you’ll craft your org chart. I recommend you do so online. is a respectable creation program.

Be sure to reference the systems you listed in the prior articles in the series, the systems related to the core functions of business that are sales, operations, administration and management.

After you have drawn your org chart for your business’s strategic target, assign each system to a position on your org chart. As you detail each system, you’ll be documenting and detailing each position or job description for your business.

In the end, what you’ll have is an operations manual on how to run your business, comprising complete instructions for each job within your organization.

But the first step, of course, is creating it.

This process, albeit tedious at times, is at to the crux of why business owners should take the time to create these systems, and get out of the mindset that they should be out there “doin’ it, doin’ it, doin’ it,” as Michael Gerber, author of The E-Myth, puts it.

Instead they need to take a bit of time to organize, plan and monitor their business. That’s the definition of working on your business instead of in it, and creating your org chart directly aligns with that.

In the final installment of this series, we’ll look at how to detail and create the named systems for each position on your org, chart.


This is posted in Blog

About the Author:

Dan Pestretto is an Amazon best-selling author, business leader and consultant working with designers, contractors and trade service providers, with his specialty being in horticultural trades. He helps business owners develop, fine-tune and implement their companies' systems and empowers them to increase annual revenues.

1 Comment on "Systemization Series: How to create (and use) an org chart"

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  1. Dan, thanks for all the articles. This is a great time for me to find this…just on linked In and was searching for a ‘how to’ get a business organized! This is perfect! I’ve clipped each article to my Evernote account and plan to glean from it for a LONGGGG time! Please keep these coming…very helpful!