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14 MASTERING THE ROCKEFELLER HABITSAccountability charts: A company will often become stuck or experiencea lot of miscommunications and balls getting dropped whenthere isn’t clear accountability established within an organization. Allprojects, line items on an income statement, priorities, and processesmust ultimately be owned by a single person, even though theremight be hundreds of people who have some kind of sub-accountabilitiesand responsibilities in seeing something completed.There are two basic rules accompanying the creation of anaccountability chart. First, there can be no “to be determined’s” onthe chart. If you can conceive of a position, put someone’s name init, even if his or her only accountability is to make sure the positionis filled. Organizations often place the term “acting” in front of thetitle of someone filling a spot until it can be permanently filled.Second, there are always a few people in the organization whoshouldn’t be leading other people, yet are considered senior in theorganization. In this case, a few “off org chart” positions are advisable.Work process charts: Because the accountability chart can’t captureall the interactions necessary to run a business without a mass ofdotted lines running all over the chart, it’s better to keep theaccountability chart clean and then establish four to nine work flowcharts representing the critical processes that flow through the organization.These processes might include how you acquire a customer,how a project moves through the organization, how employeesare selected and trained, and how customers are billed and paymentscollected. It’s advisable to take the one process per quarterthat seems the most dysfunctional and clean it up. Processes are likegarages and hallway closets, which become messed up over time andrequire regular attention.Almost Matrix: This chart shows the relationships between organizationalfunctions and the business units that form as the organizationgrows. These units begin to feel and act like separate businesseswithin the business. They can be organized around product lines, customerniches, geographical locations, or business units acting aswholly owned subsidiaries of the parent company. Conflicts oftenarise between the functional leaders, like the VP of Sales andMarketing, and the business unit heads who have sales people drivingtheir revenue. The key question is, to whom do the sales peoplereport in the organization? This kind of tension often leads to a reg-Copyright 2002 © por Verne Harnish
Mastering Growth 15ular cycle of centralizing and then de-centralizing certain functionswithin the organization, which can consume a lot of energy. Ourposition is that most people should be accountable to the businessunit leaders; the role of the functional leader is one of coaching andbringing best practices into the organization. It’s a complex issue thatrequires some real thought and expertise.Overall, it’s important to think in terms of multiple organizationalcharts and to assign accountability to someone to make sure thevarious charts are being updated.Market DynamicsThe market makes you look either smart or dumb. When it’s goingyour way, it covers up a lot of mistakes. When fortunes reverse, allyour weaknesses seem to be exposed. And there’s a counter-intuitiveaspect of growing a business: when the firm is under $10 million inrevenue and just a little more focus internally on establishing healthyorganizational habits would pay off in the long run, you have a tendencyto focus mostly externally. In turn, as the organization passes$10 million, the organizational complexity issues start drawing theattention of the senior team inward at a time when it’s probably moreimportant for the team to be focused more on the marketplace. Thisis when it’s useful to have outside assistance in dealing with internalissues so you can remain focused externally.Going back to the evolution and revolution chart and consideringthe basic measures of a business—revenue, gross margin, profit, andcash—there is an important sequence of things to focus on. Betweenstart-up and the first million or two in revenue, the key driver is revenue.The focus is on getting interest in the marketplace interestedin you.As for cash, the entrepreneur has to rely on self-funding or friendsand family in the very beginning.Between $1 million and $10 million, you add to your focus on revenuethe cash concerns you had been putting off. Since the organizationwill typically grow more and faster during this stage than anyother, cash will be rapidly consumed. In addition, in this stage theorganization is experimenting a great deal to figure out what its specificfocus and position in the market should be. These experimentscan be costly.Copyright 2002 © por Verne Harnish
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