By Jody Grunden
Building the Virtual CFO Firm in the Cloud
“Getting the right people on the bus, the wrong people off the bus, and the right people in the right seats – these are all crucial steps in the early stages of buildup…” – Jim Collins, “Good to Great”
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When Adam and I first started the company, we didn’t have much organizational structure. We didn’t need it. But as the company grew, it became necessary to develop an organizational structure. There’s a great quote by Michael E. Gerber in his book “The E-Myth Revisited” that says, “Without the Organization Chart, confusion, discord and conflict become the order of the day.”
We got to a point where we realized that Adam and I didn’t have clarity around our individual roles, and we were overlapping one another. We needed to have clearly defined roles for one another as well as the people who were working for us. Lack of clarity can cause a loss in production.
When people don’t know what they’re supposed to do or think someone else is handling things when they’re actually not, things can fall through the cracks. This is the exact phenomenon we began to experience. Also, people can begin to overlap one another in terms of the work they’re doing, which can lead to stepping on each other’s toes, causing unnecessary conflict.
Developing an organizational structure and clearly defined roles within the company creates a framework for people to work together more effectively. It also gives people an understanding of where they fit within the company and their path to promotional opportunities.
I call this an “accountability chart” rather than an “organizational chart” because I’m not just talking about a traditional organizational chart like you might be imagining. Traditional charts simply tell people who reports to whom. What we did at Summit CPA was more than develop a hierarchy outline.
We brought together our leadership team to clearly define each role within the company – what are the responsibilities of the role, what is the role being held accountable for, etc. We started at the director roles and one by one looked at each role within the company to determine if we had the right people in the right seats. We discussed what we would need to change about each of those roles in order to be innovative and prepared for the way the upcoming changes in the industry would affect us.
In doing so, we used the GWC tool from Gino Wickman’s book, “Traction,” asking three questions about each of our people within their roles:
- Do they get it?
- Do they want it?
- Do they have the capacity for it?
The answer to these questions is either “yes” or “no.” If the answer to either of the first two was “no,” then we passed on that person as we determined he/she was in the wrong seat. If the answer to the first two was “yes,” but the last one was “no,” we had to determine whether we should create the capacity for that person to take on the role or find a different person for that role.
In particular, with the director roles, we had to alleviate some CFO duties knowing we were turning a highly billable person into a non-billable person. Although people in these roles were highly billable, having them in that director role would allow us to be even more billable as a team.
We also believe it’s important that we’re constantly evaluating our accountability chart and asking important questions around it. We consider our core values and whether or not our employees are living those values:
- Do they have a sense of humor?
- Are they empowered in their roles, and are they contributing to empowering others in their roles?
- Are they adaptable with the changes that are happening within the company?
- Are they collaborating effectively with others?
- Are they curious about how we can be doing things better individually and as a company?
- Are they candid in their communication?
If there are more “no’s” than “yeses,” then we need to evaluate whether we have people in the wrong seats or whether we have the wrong seats in general. We have to ask those tough questions on a regular basis in order to make sure that we are always working toward having the right people in the right seats all the time.