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When do I need a hat chart (organization design)

Like with all good questions, the answer to when you need to think about your hat chart or organization design, is: it depends.

But we can give you some idea of on what.

Designing your organization will help you when you want to start professionalizing the work that you do. It is essential to building a machine, but it is not the first step.

The first step is to decide what your business is about, the problem you solve, for whom, and how. Design your product and figure out how you will deliver.

The first steps in creating a business are a jumble of work that crosses all disciplines. That is why starting a business is its own (learnable) skill. No matter how good you are at business, starting a business is managing the jumble.

As you do this, you will start to get some traction. The work quickly becomes overwhelming, and you feel drawn into the MSP ownership spin cycle. At this point, you should start thinking about your organization.

The danger of the jumble

Here’s why: you can’t scale if you continue with the jumble of activity that was key to starting a business. It is impossible to bring somebody else in to share the work of the jumble because you can’t describe what you do.

You do work, and things get done.

So you end up looking for people to help you do work. This is a trap.

It is a trap because one of two things happens:

  1. You find people who disappoint you. One of the most common scenarios is that no matter how hard you look, you cannot find anyone to do the work you need them to do. They start, and then they leave. Everyone seems incompetent.
  2. You find someone who can do the work and lean on them too heavily. The second most common scenario is finding someone who does the work you do. You pile more of the jumble onto them. They seem to do great until they get sick of it and leave one day. Then you are back to square one. The jumble is still undefined, and you have to look for people who disappoint or appear like fairy godmothers.

So structure your organization

If you are at the point where you realize that you need help, where you start working with other people, and the work feels like a jumble: that is when you design your organization.

You should create the entire hat chart and assign roles. You, and your small team, may wear many hats; to begin with, that is fine. But you at least know what the hats are.

Once you know what hats everybody wears, you can start finding specific people to wear specific hats.

Dolling out hats, delegation, is a core MSP ownership function

This process of delegating hats is a core part of being an MSP owner. At first, you wear them all without knowing it. Then you define them so that you at least know what hats you wear, and then you start handing them out to others. Start with the hats you least like wearing (or where you have the least capability) and progress from there.

For more on delegation, check out these posts:

The delegation matrix, the four stages of delegation, and how to hire a virtual assistant

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