When cash is tight and every question lands on your desk, a chain of command can look like a luxury for bigger firms. If you want it to run well, don’t wish it away. It isn’t about big corporations. It is about making sure everyone on the team knows who to report to, and who’s ultimately responsible. Who has the authority to sign off on things. Put simply, a chain of command describes who each employee reports to and when they should consult a supervisor before deciding something on a project. It tells you who’s in charge, who makes the decisions, and how work gets accomplished. The intention here is not to prevent people from moving forward and making decisions. It’s to make sure everyone knows how they’ll get help when they need it, and who they can go to when they don’t. If you don’t give people authority to make their own decisions, projects will bottleneck on you. That will frustrate you and your employees. It will also slow everything down. In a small shop the real benefit is that people don’t feel like they’re sitting around waiting for your approval.
Start with the people. Everyone on your team is at a different point in their career, with different levels of experience. Without a chain of command, less experienced members of the team could feel like they are on their own and not able to get help easily. A clear structure teaches them how to ask for the help they need from the more senior people. It means everyone has at least one person to ask questions before embarking on a course of action that might not be the right one. With that kind of backing, they’ll feel supported and learn to make decisions on their own. They also gain the confidence to suggest new ideas and build their skills. A good chain also encourages collaboration and a sense of physical and emotional safety, while protecting the company from unnecessary risks, and that holds whether you run a software shop or a construction crew.
Larger organizations usually split into three tiers. At the top sits senior management: the chief executive officer, chief operating officer, the chief financial officer and the chief marketing officer. Middle management means vice presidents, managers, supervisors and foremen. Below them are the individual contributors, such as financial analysts, HR generalists and sales reps, who don’t manage anyone. Go past three and the chain usually gets too complex to work efficiently. In a small company you can often get away with fewer layers, and the smaller the business, the less likely it is to have distinct tiers at all, since people take on several roles to keep things moving. So you probably shouldn’t pigeonhole people into an unduly rigid company structure. They’ll feel crimped by it, and so will you.
The Payoff
Done well, the payoff is real. Responsibility comes first: everyone knows who’s in charge, and who makes decisions and approvals. It also means that if someone makes the wrong decision, or if a decision needs to be overruled, there’s never a confusion over who to ask. A clear chain of command leads to greater job satisfaction. When the chain of command is defined, people on your team know how the team operates, and what is expected of them. People in a stable environment feel less stress and get more done. It also helps with efficiency. The chain of command makes it clear who needs to be involved in each decision, and how projects should be executed. Drawing it out can even expose redundancies that slow the work down. There’s also the benefit of career goals. When there’s a clear chain of command, it’s much easier to reach professional development objectives. Finally, specialization enables people to be specialists in certain areas.
A Chain of Command Causes Its Own Trouble
Set up thoughtlessly, though, a chain of command causes its own trouble. When people feel confined to their department, it can curb their collaboration with other departments, and they hold back ideas unless a manager invites them to share. With employees working in silos, they’re sometimes not able to share information or help one another. They can also be wary and suspicious of one another, and not always willing to collaborate. Communication slows, because a decision has to climb the chain and the answer has to come back down, and the travel time is often unacceptably long. This means that the person who is actually handling the problem has to wait while the decision is made. Then there is diminished innovation. When risk-averse managers keep shooting down ideas, it can turn into a self-fulfilling prophecy. If I came up with 20 ideas, and 19 of them were nixed, I’d learn to keep my thoughts to myself. On the other hand, the wrong chain of command can lead to a culture of fear that discourages people from speaking up. Lastly, there’s the risk of internal competitiveness. Managers can start thinking they’re entitled to a kind of proprietary ownership over employees. It can make for a lot of tension and conflict in the workplace.
Set up a Chain of Command
So what can you actually copy? There is no best way to set up a chain of command. Yours will depend on your industry and the duties essential to running the business, but two models make good starting points.
The first comes from a marketing agency. It has several chains of command, one for each division, with three levels in each. Individual contributors report to their division’s director, and each director reports to the CEO. For a small company, the appeal is obvious: that’s only two levels between an employee and the CEO. When you sketch your own version, I suggest you start with the highest rows first, and then fill in each row beneath it. This way, you’ll be sure to have someone directing everyone who doesn’t have a director yet.
The second comes from the sales side of a tech company, where there are two chains of command inside the one division. The Sales Manager has employees reporting to them, and so does the VP of Sales. Both report directly to the Chief Revenue Officer, who reports to the CEO. As the company grows, more people can report to the Sales Manager and the VP of Sales. The thing about this setup is that it depends on leadership. You are assuming that everyone in the leadership chain is fully capable of their respective roles. The lesson here is for each manager or supervisor to clearly define the roles and responsibilities for each employee under them. This ensures that everyone knows their jobs, and what is expected of them.
To get started, write down a list of everyone on your team. Then, for each member, ask yourself who you’d want them to report to or turn to for advice. What would make sense for them? Who should sign off on things they do? Who has the authority to make decisions? The best way to connect these employees is to design the chain of command with the goal of supporting the people at every level. As a result, you begin building a culture of clear communication, efficient workflows and mutual respect. At each level, we ought to think about how that particular level serves the team. Pick the roles best equipped to guide people at each tier, and then ask the hard question. Do you need any more layers in your organization? If you put too many road blocks in place, the company can become too slow. The lesson? Keep it simple.
