The Definitive Guide to Org Charts

Defining an Organization

Real-time org charts

The changing corporate landscape and market demand is motivating executives and HR leaders to completely rethink how the organization is designed. Employee culture, technology and employee expectations have shifted in recent years and companies are daring to redefine their identity.

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The natural side effect of all of this change is having its effect on how companies are organized. Company structure is getting an overhaul. As companies shift their design perspective, their construction is transforming to better represent the actual structure of the organization.

Org charts are the graphical representation of the organizational structure and are often challenged to accurately map and keep up to date these newer, constantly changing organizational structures. A result of this ambiguity is the popularity of org chart software to bring order to the abstract.

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What Is an Org Chart and Why Are They Important?

At the most basic level, the typical org chart helps companies visualize their company structure. If the right org chart is used correctly, however, it can do much more.

In the past, org charts were a mixture of boxes and lines connecting them, an attempt to bring order to a workforce, at least on paper. With functional, divisional, and product organizations, org charts were relatively easy to construct using basic tools. They were referenced typically by management to identify resource gaps or by new hires to get an idea of who was who.

The problem with these org charts, however, were that they were static, rarely updated, and almost never a real-time depiction of the organization. Every time an employee was hired, fired, changed positions, or left the company, the org chart was instantly outdated. Instead of being a valuable resource, the org chart was filed away and rarely referenced.

Modern org charts, however, are more flexible, interactive, and user-friendly. Instead of residing in a PowerPoint slide or Visio file on someone’s computer, they are instantly accessible and editable from a mobile device. They may include much more detail than simply a name and job title. In fact, they can serve as a critical asset that makes the entire organization smarter, more productive and happier at work.

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The Evolution of the Org Chart

The first org chart was credited to Daniel McCallum, a general manager at Erie Railroad. It looked more like a complex family tree than what we now imagine and tried to illustrate the complicated structure of the Erie railroad system and its employees. IBM changed things up a bit by introducing the more familiar pyramid shaped org chart.

History of the org chart

Functional org structures came nearly 50 years later, followed by divisional and product-oriented structures and matrix structures. Since the 1970s, organizations have gotten increasingly more creative in how they are structured to reflect the changing workforce dynamics. Today, there are few rules in how a company is structured, making the org chart a moving target.

The future of org charts is as uncertain as the changing structures they represent. It is clear that today’s progressive, fast-growing organization needs a new kind of org chart. Companies are increasingly cross-functional and networked in structure, rather than simply vertical. There are fewer lines and boxes and more inter-related, dynamic ecosystems. Managers and teams are agile, forming and re-forming productive relationships on the fly. Talent and responsibility are allocated across multiple projects and geographies. Yet, through all of this, a shared sense of culture and employee engagement is more crucial than ever. The org chart is definitely evolving, embracing technology and mobility to better address the needs organizations have today.

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Ways to Use an Org Chart

The one-dimensional org charts we once rarely referenced have benefitted from technological advances. They still help business leaders identify resource gaps and help all employees see who is who, but they can also help with budgeting, hiring planning, communicating, managing re-orgs, talent allocation and many other tasks across all employees.

Because these org chart can now be mobile and accessible through a company app, employees up and down the ladder have real-time access to know who’s who and who does what. It can be a daily tool for everyone, managers as well as employees, to get the knowledge, resources, information and alerts they need the instant they need it. The org chart becomes a powerful tool to connect with people and better understand the organization as a whole.

Mobile org charts

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How to Build an Org Chart that Will Be Used

If you want your company org chart to emerge from the shadows and actually be used as incredible resource is has the potential to be, a few questions must be considered.

You must first start with data and ensure it is up to date. Data is king and it’s no different with the org chart.

  1. Where is your employee data?

  2. Who will be responsible for inputting employee data into the org chart?

  3. How often will the data be updated?

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Next, think about the kind of org chart you want to develop.

  1. What is your organizational structure?

  2. How do you want your organization to be visually represented?

  3. How will it be updated?

  4. Will it be shared electronically and/or printed?

Finally, you have to demonstrate how everyone else can benefit in new ways from the org chart.

  1. Who can benefit from the org chart resource?

  2. What executive-level support can you obtain?

  3. How can you best announce, train and incentivize employees for the easiest adoption?

  4. How soon can you make the resource available for employees to use?

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