Your Org Structure Matters — Even If It's Just You

Transcript

You Have an Org Structure (Whether You Know It or Not)

Good day. My name’s Mike from Lone Wolf Unleashed, and today we’re talking about your org structure. I know it’s a bit of a weird one because you’re a solo founder and you probably go, well, I don’t have an org structure because it’s just me, but let me explain.

When we build businesses and you want to grow, and inevitably you hire someone to take care of things because you are wearing too many hats.

The requirement of having an org structure that is not just hierarchy in terms of who reports to who, but it’s how work is done and who does what work is really important.

Right now I’m working with some very large businesses and they’ve gotten to the size now where some of the problems that we’re facing with how work is done and structured is really quite a problem.

So I’m going to walk through some concepts now for you to think about as we go about building up your business, and hopefully this gives you some ideas around how to structure the work and what layer of work needs to be looked at as you systemize your business.

Now this is a little bit more technical than normal. This is beyond just procedures or process maps. This is really getting into the depths of the detail about the types of work that goes into what, to make sure that as you grow your business, that you standardize whatever work you can across the board as you go.

Run, Serve, and Change

So I’m doing this off the cuff. I have no notes on this one. I’ve been waist deep in this in the last few weeks, so I want to give a shout out to the guys over at Synexia. Axion. They have a framework called Axion, and they basically have three layers of work.

There is Run, Serve, and Change, and all work takes on all three layers, but different layers do different things.

So what happens is Run is the people who are doing the frontline work. They’re the managers who are trying to keep the wheels on the engine while it’s screaming down the track. It is the frontline staff who are trying to serve customers and do those types of work.

And then there’s Serve, which provides the compliance, what they call the grammar. It is the compliance, it is the terminology, it’s the standards. All those things go into Serve.

And then there is Change, which is longer term thinking. It’s how things change, go from one state to another.

When Layers Get Confused

And what I’m seeing at the moment in these bigger companies is the Serve layer either gets pushed into doing Run work because there’s not enough resource in the Run function, or there is Run trying to pick up the Serve and trying to make up for the gap in terms of how the system is designed to do the compliance and the standardization.

So let me give you some examples. One example is, let’s say it’s an aged care home. They have nurses on the front line, and they have checklists. They have a certain number of things to do, and they have a certain number of compliance related things as well as care related things.

Now, the care related things are in the Run function. That’s work that they should be doing.

But if they are not given the standards, they’re not given the regulatory compliance things in a way that they’re just able to operate their day job in, they’re also now having to pick up that compliance work and make decisions around that.

I know this is a technical language, but we have to understand that they’re taking much more effort now to make those decisions about what is required as part of this job and what is not. And that takes a lot of time.

So something we have to think about now is, well, who provides them with the structure so that they’re not having to bear the load?

Because they’re bearing a load that they don’t have the capacity to bear. They are taking on additional responsibilities that are outside of their remit really, to be able to serve the company as well as the client.

They’re serving the company in that they’re trying to meet those compliance thresholds and they’re serving the client in doing the service delivery to that client.

So what we want to be able to do here is we want to be able to make sure that whatever functions are set up in the company are doing the right thing. We don’t want Serve doing Run work and we don’t want Run people doing Serve work.

How This Applies to a Small Business

So basically, how does this apply to a small business?

Each business has a set of standards. Maybe there are certain laws that apply to you. So maybe you’re running a financial services company. Maybe you’re doing financial advising. You will have a certain set of regulatory compliance things that needs to happen, and it is up to a certain function of your business to make sure that your service delivery meets those requirements.

So setting up the requirements and setting up the terminology and all those things you need to use is the Serve layer. Those are the things that can be standard and there’s the checks and balances that you check against.

Now, if you set things up that way, that means that when you actually go to serve the clients, you can just focus solely on doing that and the Serve layer takes care of the rest.

So what does that mean? It means that all the standard documents that you have, because we’ve talked about this in previous weeks, the standardization of documents and artifacts and those specific phrases or paragraphs and things that go into that. They are the required information you need to collect from those clients.

Those types of things are all already defined for you to now run against.

So you are not having to make a decision now on the front line about do I need to collect that document or not. Actually, it’s already defined that I do need to collect that document and it’s already laid out for me that I need to collect that document, and that means that I now don’t need to make a decision about whether to collect that document or not. It’s already been made and I just do it.

It’s those types of things that, that type of decision making could go into 50% of the information that you collect from a client. But if it’s already defined and it’s already defined in a way that the structure is already given, then serving that client becomes way, way faster.

The Confusion Tax

So you know, as you get bigger, the amount that it’s costing your business in that confusion is way, way higher, like eye wateringly higher.

So what we want to make sure of is that things aren’t getting confused, things are running smoothly, and that those structures are set up for you to just be able to serve your customer.

So what we want to make sure of is that those compliance layers, those compliance requirements and things are already set up so you can now go and do that work seamlessly without having to escalate, or only escalating under the very specific circumstances that need to be escalated through.

What does this mean? It means that you save potentially hundreds of thousands of dollars worth of efficiency and productivity as you grow.

Some of the small use cases, I’m using these structures now to identify improvement opportunities that are in the six to seven figure range, and we are now doing it every two to three weeks.

That’s astounding given that I only work with a handful of clients at the moment. And yes, some of them are bigger, but you have to remember that you being a solo founder, are working 60, 70 hour weeks and you’re really running hard and it’s up to you to do both setting up of the structure and changing, and also running and making sure that your clients are served.

Setting Up for Delegation

One day you are going to hand one of those functions off. You are going to hand Run off to someone else. You are going to embed AI or automation into parts of this. How does that work? How is that supposed to work?

Now, my recommendation when you go to do your org chart and you list out all your different functions and types of work that your business is doing, and you list your name against all of those — this framework about how to do this is outlined in the E-Myth, so absolutely go and read the E-Myth if you haven’t done that already — but there’s going to be certain functions of that, and you are going to be able to write down your name or someone else’s name about what you want them to start to do.

And I highly recommend that being in the operational space, in the Run space. Why is that? That is because you being the business owner, you are the one who’s responsible for setting up those structures.

How many times have we heard people say, oh, I hired someone, or I hired a VA and I just didn’t really know what to give them, or I didn’t have the specific set of instructions, so I didn’t have this, that, and the other. Managing them took too much time. I just took the work back because it was just easier. Quote unquote, easier.

Setting up those structures is your job as a business owner, and if you’re not setting up the structures, then you are going to confuse people when they go to do that frontline work about what they should be making decisions about and what they shouldn’t be.

Your Job as the Business Owner

So you need to be able to set up that Serve layer, set up those standards, set up that language, that grammar, all that terminology needs to be established.

That means that you can’t be sitting in the Run function to do that. You can’t be continually serving clients like that because you’re not going to have the time. You don’t have the time today. You’re not going to have it tomorrow.

Setting this up, I’ll tell you right now that you will save so many hours. Once you agree and you document and you push those standards to your operational work, it means that the operational work, the Run work can be done seamlessly without having to worry about whether they’re compliant or not.

What’s the best system that we can set up? The best system that we can set up is the one where doing the right thing is the default thing to do.

So it’s having those conditional fields on your forms. It’s having those required fields on your forms. It’s making sure that your team is trained. It’s making sure that everything is in place to ensure compliance to the standard.

And then when the person goes to do the job, they just know what to do. The system leads them through about what needs to be done, and they can go from there.

Summary

In summary, there’s three layers. There’s Run, there’s Serve, there’s Change. I will put a link to the Synexia website where you can read more of this.

Now it is quite a bit more technical. It is in the organizational design space. It is generally for larger companies, but what I’m trying to demonstrate here is that there is value in setting up these standards early on.

Because if you don’t, you end up in the position of some of my current clients. I’m seeing it all the way from the 20 person business all the way up to the 20,000 person business. It’s the same thing. The people on the front line are having to make structural decisions about what the standard should be. That should not be the case.

It means that if you set it up right and you have this in mind as you design your systems, that you are going to save having to onboard more and more people and have more and more overhead to manage that.

What we want is more profit in your pocket and you get more profit in your pocket by setting up the systems correctly in the first place.

So definitely go and check out Synexia. But in short, we want to make sure that your company, its structure is set up with the right things in the right place. I’ve said this before, business is a big puzzle and we want to make sure that the pieces are in the right place.

We don’t want those frontline people to be continually trying to make decisions about what the standards should be on the fly. We want those standards to be in place.

Equally, we don’t want those people in the Serve layer to continually have to be stepping into operations to try to manage and get people set up and to try to make sure that people are running right. The system should already be determined and supporting the work.

So that’s going to do us this week. Thank you so much for joining me today. I really appreciate your time. You could have been doing so many other things. Thank you for hanging out with me and learning about how you can set up your organizational structure to serve you in the long term.

Make sure to check out my website. And I’m going to do a little thing a little differently this week. Send me an email about the types of things that you want to hear from me in the coming episodes.

I’ve had a couple of reply emails from my newsletter, which is really nice, about wanting to learn more about Claude and how I’m using the code stack. I’m currently in the Max plan. And yeah, I’d really like to share some more of that. So if that interests you, please email, let me know if there are specific things in there about that and how to create systems in there.

Again, thank you so much and I’ll see you next week.