title:Do You Use This Approach To Position Contracts? author:Mike Hayden source_url:http://www.articlecity.com/articles/business_and_finance/article_1971.shtml date_saved:2007-07-25 12:30:06 category:business_and_finance article:

“I couldn’t wait for success… so I went ahead without it.” — Jonathan Winters
More Org Chart boxes than people?
In previous issues of Profitable Venture Tactics (PVT), I have discussed how to develop your Strategic Objective, Organizational Strategy, and Org Charts. For best results you must develop these in order, before you develop your Position Contracts.

Strategic Objective
Organizational Strategy
Org Charts

(For more information on these topics, see PVTs 2, 3, 4, 9, 11, 22, 29, 36, 42, 58, 60, 65, 81)
In this issue, I will attempt to tell you how to determine the best sequence to develop Position Contracts.
Whether you’re in a business start-up or small business, you face this one problem:
“More boxes (on the Org Chart) than people.”
In other words, when you first develop your company’s Org Chart, you see how the number of positions (boxes) exceeds available people to fill them. So inevitably, certain people must occupy two or more positions at once.
While filling more than one position has inherent problems, it also complicates how you sequence the development of Position Contracts. Let me explain.
What are the limitations of this “Standard Approach?”
If you stick to the “standard approach” to developing Position Contracts, you’ll use the following strict procedure.
You develop the Position Contract for the President (or CEO, or an equivalent title). You then have this Contract approved and adopted. (For more on Position Contracts, see PVTs 15, 18, 81)
Then you proceed to the next management level (typically VPs). Again, you (or someone) would write the Contracts for approval (with likely revisions) and adoption.
Diligently, you continue this process down your entire Org Chart, one level at a time, until you reach the lowest positions.
Here’s the Good News:
This “standard approach” is good since it sticks to the idea that a Contract for any position must be derived from its immediate managing position (“above”). Thus, the process is orderly and logical.
Now, the Bad News:
The problem is that this “standard approach” does not address your realities of start-ups or small-businesses.
In these situations, the President typically fills many positions, including some of the company’s low-level functions. In this case, your objective is to replace yourself in each position (even the presidency, if you wish), beginning at the lowest levels and progressing upward.
So, you have two opposing movements:

Replacing yourself (“moving upward”) and
Developing your Position Contracts (“moving downward”).

Unfortunately, these movements rarely meet in a convenient location on the Org Chart or at a convenient time in your company’s growth.
This is annoying because you might want to hire a Payroll Clerk but, according to this “standard approach,” you should not employ that Payroll Clerk until your development of Position Contracts has reached that level in the Finance Department.
Since this “standard approach” is not consistent with start-up or small business priorities, you may want to abandon it for a more realistic, more effective strategy.
Before developing Position Contracts, you should:

Develop your Organizational Strategy and Org Chart. (Only then can you determine which positions have no personnel to fill them.)
Develop the Position Contract for the position you will ultimately occupy.
Store all Position Contracts in their associated Operations Manuals.

As I have mentioned before, a Position Contract is very different than a “job description.” Why? A job description is NOT a binding contract.
Next week, I will discuss a more effective approach to developing Position Contracts,

“Keep away from people who try to belittle your ambitions. Small people always do that, but the really great make you feel that you, too, can become great.” — Mark Twain
Until next week…
Quest^ions? Comments? Call me at (800) 637-8182 or send me an email.
Best Regards,
Mike Hayden, Principal/Consultant Your partner in streamlining business.
PS. If you’re not on our P V T Roster, sign up (fr#e) at: http://www.SeniorManagementServices.com
(c) 2005 Mike Hayden, All rights reserved. You may use material from the Profitable Venture Tactics eZine in whole or in part, as long as you include complete attribution, including live website links and email link.
See full color web version and even listen to this PVT, visit: http://www.SeniorManagementServices.com/pvt-94-position-contracts.html

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