From the Ask Tom mailbag:
Let’s say I buy into Elliott Jaques model of Requisite Organization. But I have a small company. As you describe the layers in the organization, it is clear that I am missing some key roles. But in this recession, I have to stick to a personnel budget. I cannot afford to hire the people necessary to fill all the roles.
If you were thinking about purchasing a machine, a major expensive machine, for your operations, and you were concerned about budget, how would you make that decision?
Actually, it doesn’t matter whether you are concerned about budget, the answer is still the same. You would purchase the machine only if it were necessary for the operation. I don’t know of a single business owner or manager who would put something in place unless it was necessary.
I use necessity as a driver for many decisions. Is that machine necessary? Is that role necessary? If your business model requires a role, yet your budget will not allow the hire, then you have to modify your business model.
Rather than questioning the validity of organizational roles and layers, let Elliott’s model help you understand what is missing and what modifications you might have to make until your company gets back in the zone of profitability and growth. You will get there faster.