The 10 Departments

Every business runs ten functions. Not ten departments with doors and headcount, ten functions that have to happen for the business to work. A one-man band runs all ten. So does a company with four hundred staff. The difference is not whether the functions exist, it is whether anybody has been made accountable for them.

Where nobody is accountable, the function does not stop. It gets done badly, late, by the owner, usually after nine at night, and usually in the week it has already caused damage.

What the ten actually are

Different frameworks name them slightly differently. This is the version we use, and the labels matter less than the completeness of the list.

• Leadership. Direction, standards, the decisions nobody else can make. This one is never delegated, only shared.
• Finance. Not bookkeeping. Pricing, margin, cash, budget, and knowing the numbers before somebody else tells you them.
• Marketing. Creating the enquiry. Everything that happens before a human conversation.
• Sales. Converting the enquiry. A different discipline from marketing, and usually a different person.
• Delivery. Doing the work, on time, to standard, at the margin you priced.
• Customer care. What happens after delivery. Retention, complaints, referrals, the second sale.
• People. Recruiting, inducting, developing, appraising, and the conversations nobody enjoys.
• Systems and IT. How the work is recorded, repeated and improved. Process as much as software.
• Legal and risk. Contracts, insurance, health and safety, compliance, data. Boring until it is not.
• Innovation. Improving the offer and the way it is delivered. The department that decides whether you still have a business in five years.

Why an unowned function costs real money

An unowned department does not announce itself. It shows up somewhere else, in a symptom that gets misdiagnosed.

Nobody owns marketing, so enquiries only come from referral, so the pipeline is lumpy, so in a quiet month you take work you should have refused. That does not look like a marketing problem when it arrives. It looks like a margin problem.

Nobody owns people, so hires are made in a rush against no defined role, so one leaves in five months and one underperforms without ever being told. That does not look like a people problem. It looks like a recruitment market problem, or a bad-luck problem.

Nobody owns innovation, so the offer is the same as it was six years ago, so the only argument left in a competitive pitch is price. That does not look like an innovation problem. It looks like a market getting harder.

What owning a department actually means

Three tests, and a function is not owned unless it passes all three.

A number. The person can tell you how that function performed last month without going away to work it out. Marketing knows the enquiry count. People knows the leavers. Delivery knows on-time percentage. If producing the number takes a week, nobody has been watching it.

A standard. They know what good looks like in that function and they are entitled to say when something falls short of it, including when the person falling short is you.

A boundary. They can spend, decide or commit up to a stated limit without asking permission. Accountability without any authority is not ownership. It is blame with a job title, and capable people work out the difference quickly.

Applied honestly, those three tests usually show that several departments you believed were covered are not. Somebody is performing the tasks. Nobody is holding the outcome.

A worked example

The figures are illustrative arithmetic, not a client. Take a manufacturer turning over £1.6m with 19 staff: an owner, a works manager, an office manager and the shop floor. The owner writes one name against each of the ten. The result:

• Leadership, finance, sales, systems, legal: his own name. Five.
• Delivery: the works manager. Customer care: the office manager, in practice whoever picks up the phone. Two.
• Marketing, people, innovation: blank. Three.

Now trace the blanks through the accounts.

With nobody on marketing, the factory ran at about 60 per cent capacity in three of the last twelve months. To fill it, the owner took work at 11 per cent gross margin against a normal 29 per cent. On roughly £130,000 of revenue in those months, that is about £23,000 of gross profit given away. It was recorded as a bad quarter.

With nobody on people, the last two hires had no written role and no induction. One left after five months. Recruitment fees and lost output on that one alone came to something like £9,000, and the second is still being carried because the conversation has not happened.

With nobody on innovation, the product range has not moved in six years, and the sales conversation has quietly become a price conversation. That one does not have a number against it yet. It will.

Add the first two together and the three blank boxes cost more than £30,000 in a single year, in a business making perhaps £110,000. None of it appeared on a report called marketing, people or innovation, because those reports do not exist.

How to apply it this week

1. Write the ten out and put exactly one name against each. No pairs, no shared, no we all do that. One name. The discomfort you feel doing it is the point of the exercise.
2. Count how many say you. Four or more and the ceiling in this business is you, regardless of how capable you are.
3. Give each department one number. Marketing gets enquiries per month. People gets unplanned leavers. Delivery gets on-time percentage. A department without a number is an opinion.
4. Fill the blanks with a person, not a hire. Two hours a week from somebody who already works for you beats a job advert you will not place. Accountability first, resource second.
5. Hand over one department properly this month. Written outcome, one number, a spending limit, and a monthly ten minutes to review it. That is a handover. Telling somebody they are now in charge of marketing is not.
6. Put the sheet on the wall and revisit it quarterly. Departments drift back to the owner silently. A visible sheet is the cheapest control you will ever install.

The mistake most owners make

They draw an organisation chart of the people they have rather than the functions they run. Every box on that chart has a person in it, so it looks complete, and the three functions nobody performs are simply not on the page. You cannot manage an absence you have never drawn.

The second mistake is believing you are too small for this. The function exists at £200,000 exactly as it does at £20m. At £200,000 it is being done at eleven o'clock at night by somebody who is tired and has no training in it. That is not the same as it not existing.

The third is confusing owning with doing. The owner of a department is accountable for the outcome and the number. They may do none of the work. A department can be entirely outsourced and still properly owned, and it must be, because an outsourced supplier with nobody holding them to a standard is just an invoice.

The questions to sit with

• Out of 10, how confident are you that all ten functions are genuinely being performed rather than merely assumed?
• Which three departments would show up as blank if you filled the sheet in honestly right now?
• Which of your recurring problems is actually a symptom of an unowned department somewhere else?
• If you had to remove your own name from two boxes by the end of next month, which two would you choose, and why not those two today?

This is the starting point for the Systems & Scale work and the Organisational Review. The review is not an exercise in drawing charts. It is finding out which functions your business is running on hope, and putting a name and a number against each of them.