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The organizational chart is an important tool for any business. It allows management to get a clear idea of who does what and it helps the company run effectively. Here are three simple steps for making your own organization chart using Microsoft Excel.
An organizational chart (also known as an org chart) is a diagram that shows who reports to whom and who is accountable for what in your company. In the form of a drawing, diagram, flow chart, or photograph, it usually depicts the firm owner or department head at the top with subordinates below.
This essay was made possible thanks to the support of Pingboard. Pingboard is a free organizational chart application that will assist you in creating and maintaining your own org chart. You may also try out their sophisticated organizational charting capabilities for free.
1. Determine the kind of organizational chart that you need
There are three sorts of organizational charts you’ll likely want to build for managing your small business: hierarchical/top-down, functional by department, and matrixed or cross-functional.
Organizational Chart (Hierarchical/Top-Down)
A hierarchical organizational chart depicts an organization’s reporting structure from the top-down, with the firm owner or department manager at the top and workers who report to them below their name. To show reporting linkages, all positions are represented by boxes linked by a line.
Sample Organizational Chart (Hierarchical/Top-Down)
Because it is the simplest of the three forms, most small organizations will adopt a top-down organizational chart. Your organizational chart would display your name at the top and the names of your workers below if your company consisted of only you and a few employees who all report to you.
When you start adding supervisory personnel and department heads, or when you have vacant, unfilled roles, it becomes a little more difficult, but the essential concept remains the same. Using the trial version of Pingboard, the example organizational chart displayed above was created in roughly three minutes.
Organizational Chart with Functions (by Department)
You’ll probably utilize a functional organizational chart if your company grows and you start grouping your employees into departments like sales, finance, operations, and customer service. This diagram shows who is in charge of each department, how many there are, and who reports to each manager. Here’s an illustration:
The graphics you use to create an organizational chart in an organizational charting tool aren’t static. You might, for example, dig down on the number of direct reports in Sales and Marketing in the figure above to see the exact names of each person in that department. If you make an organizational chart on paper, you won’t have this functionality.
Organizational Chart Matrixed/Cross-Functional
Multiple reporting connections are shown in a matrixed, or cross-functional, organizational chart. It’s utilized to represent complicated company organizational structures that include project reporting links as well as supervisory (top-down, hierarchical) relationships. It depicts both supervisory and project or team ties, such as “who is my boss.”
Employees at a small marketing business that handles client projects, for example, report to their supervisor and give project managers deliverables. A matrixed, or functional, organizational chart might be beneficial to this sort of company.
2. Decide if you want to use a free or paid organizational chart tool.
You may discover free tools and templates online or inside your current office software systems, such as Microsoft Office or HR or payroll software. You may also construct your own organizational chart using specialized organizational chart software. Let’s take a look at some of the most popular ones, beginning with the free ones.
Tools for Creating Organizational Charts for Free
- As illustrated in the photos above, Pingboard offers a free org charting tool.
- Many commercial websites provide a free (limited feature) version in exchange for an email address. Pingboard’s premium organizational chart choices come with a seven-day free trial.
- If you currently use the MS Office Suite in your firm, you may design an organizational chart in numerous MS Office applications.
- In MS Word, once you have a document open, choose Insert>Smart Art>Organizational Chart. Instructions can be found here.
Create an Org Chart using MS Office SmartArt Menu Options
- You may create your own organizational chart in MS PowerPoint by inserting text boxes and lines, or you can look for free organizational chart designs online.
- You may also get a free organizing chart add-in for Excel, PowerPoint, and Word.
- Use a basic drawing or presentation application, such as Google Slides, that is already installed on your computer.
- HR/payroll system — If you already have an HR or payroll system in place, such as Justworks, SAP/Success Factors, or Zenefits, some of them may give an organizational chart based on employee data.
- Internet templates for free – You’ll discover lots of free printable org chart templates if you search for “free org chart template.”
Paid Tools for Creating Organizational Charts
For software that enables you to construct organizational charts, you may expect to spend anything from $5 to $100 per month. These applications are ideal if your company is fast expanding, you need to make a lot of organizational charts, or you need to create other types of diagrams in addition to organizational charts (such as flowcharts and process maps). Many of the commercial organizational charting websites provide free trials, however, you may be required to submit your email address in order to get access.
The cost of organizational chart software is usually divided into levels based on the features included. Pingboard’s beginner subscription, for example, allows three workers access to the software, as well as mobile app access and email support, in addition to the free plan’s capabilities. Advanced capabilities like interfaces with your HR or IT applications and access for your complete workforce are available when you upgrade to Pingboard’s Standard or Pro subscriptions.
Drill down to view specific employee information (profiles), color code the charts, search the charts by name or job description and even add employee photographs are all features of the top org charts.
The following are some of Pingboard’s most helpful features. The first 10 functions are accessible in the free version of Pingboard, while the four features at the bottom need an upgrade:
3. Fill in the blanks on your organizational chart.
Each placeholder might include as little as a name and title or as much information as you can fit into each box, depending on why you’re making your organizational chart. In most organizational charts, we suggest including the following in each position box:
- A name (leave name blank if the position is open)
- Department (sales/marketing, accounting, and operations, for example)
- Job title or role (for example, sales rep, supervisor, clerk, acct mgr)
- Optional:
- The location (use if employees are geographically diverse, i.e., NY, TX, CA, or if you have multiple buildings)
- Information about how to contact
- Phone number (work phone extension or cell phone)
- Sending an email (work or home email to be used for business contact)
- Headshot/photo
You may add more information to certain org chart applications to make it more resemble an employee directory. Here’s an example from Pingboard that shows sensitive data that only the Pingboard admin and the employee can access, such as the employee’s shirt size and dietary restrictions.
Why Do You Need an Organizational Chart for Your Small Business?
You are not required to have an organizational chart, but it is recommended as an HR best practice. There are a number of reasons for this:
- To promote cross-departmental and team communication
- to save time by identifying who is responsible for what
- To show business partners (banks, finance partners) that your company is well-structured for success and that key positions are filled.
- To assist you in making development and transition plans
An organizational chart, like a phone book, is a tool for defining your reporting structure and therefore improving communication. It saves time by eliminating the need for new workers to ask questions like “Who is our IT person?” or “Who can I ask a question regarding my employee benefits?” “Who is my boss’s boss?” or “Who is my boss’s boss?”
Investors, banks, lenders, and the Small Business Administration (SBA) may want to examine how your firm is organized to guarantee it’s likely to be successful and able to repay a loan, therefore organizational charts are vital.
In fact, having two versions of your organizational chart — one that illustrates current employee reporting connections (to share with your team) and one that indicates how your company will be organized when you grow/expand or when a staff member quits — is an HR best practice.
Unfilled jobs in the second version of your org chart are likely placeholders for roles you intend to employ in the future. Here’s an example of two jobs that aren’t filled:
What Are the Advantages of Using an Online Organizational Chart?
One of the advantages of using a cloud-based organizational chart like Pingboard is that you can often sync it with existing applications, such as Google’s G-Suite, Okta, Azure Active Directory, or ADP, so that if data changes in one system, such as Google’s G-Suite, Okta, Azure Active Directory, or ADP, your organizational chart will automatically update, saving you time and reducing duplicate data entry and errors.
Pingboard has a number of data synchronization and import features.
Another advantage of most online organizational charts is the option to import data from a spreadsheet or HR software, but this usually necessitates a premium version upgrade. For example, Pingboard allows you to import data from a spreadsheet or Google, as well as HR, benefits, and payroll applications like ADP, Gusto, Justworks, Zenefits, and others.
Final Thoughts
Before you waste time in the workplace building an organizational chart, consider if you truly need one. You probably don’t if you have two workers who both report to you. However, if you start hiring additional people, an organizational chart becomes quite useful.
In the beginning, we suggest keeping your organizational chart basic. Pingboard, for example, allows you to construct a free organizing chart on one page and then edit it by adding or removing boxes, lines, or text.
Whatever you decide, remember to update your organizational chart as your company expands – roles, people, and responsibilities all change. As you grow from three to fifteen to fifty personnel, your organizational chart will certainly get more complicated. So keep the first one you penned on the back of a napkin; you never know when you’ll look back on it with fondness.
