Episode 490: The Accountability Chart & CABs

Hey everyone, well, my guess is if you've been in business any amount of time, you have heard about having an organizational chart. It's a visual representation of the people in the positions on your team. Now, I think that at times, especially whenever our business is small, meaning 2, 3, 4 people, you can often begin to think, you know, it's not really necessary for me to have an organizational chart. I mean, maybe if I'm sharing that in some presentation potentially, but for the most part, it's not really that necessary. I think whenever you get to roughly $1 million in top-line revenue, this is where we want to move from just an organizational chart to an accountability chart. And with an accountability chart, you have what are called CABs, C-A-Bs. B, and that is critical accountability bullets. Let me begin to contrast the difference between just an org chart and an accountability chart and why we want to have an accountability chart and why when you begin to approach roughly $1 million in top-line revenue, I think that this is a necessity. Now, can you do it before that? Absolutely you can. In fact, I think it would be easier for you to start once you start getting 2 or 3 of your team members and watch your accountability chart evolve over time. The reason why I believe roughly around $1 million is simply just because of the number of team members you're going to have on your team. If you think on average something like $150,000 revenue per person, well, some easy math, you're going to have somewhere between 5 and 8 team members on your team. I mean, you know, obviously you don't have to do a lot of fancy math to know that if you had, if you were doing $1 million in top line revenue, and including yourself, by the way, you had you and 3 other team members, well, that's $250,000 in revenue per person. That would be absolutely fantastic. But typically you're gonna see maybe upwards of 8 people on a team with a company doing $1 million. So that's $125,000 revenue per person. Hence, what we typically see is a business owner that has— is doing around $1 million in annualized revenue, they're going to have roughly about 6 team members. And it's at this 6-team-member mark that you as the owner begin to feel a little bit of stress of having to run one-to-ones and having everybody report to you. So typically, this is why we talk so often about the path from $300,000 to $1 million is one journey, and it's a big one, and you want to celebrate that milestone. But when you get to $1 million, then the, then the journey changes on your way to $3 million, and your team begins to evolve and expand. You start to have your first levels of management and leaders in your organization that you probably haven't had up to that point. So therefore, it forces or encourages you to have a much more clear picture of what your organizational chart is, and more specifically, what we're going to talk about, which is your accountability chart. Now, functionally, the only difference between an org chart and accountability chart is that they both have the person's name and then the title. It's irrelevant which one is first. Typically, I would like to see the role itself, the title, the role that that position is carrying, and then down below that, the person that has that or carries that role. Title, and then the person who owns that role. And then it's down below that that we want to have up to 5 critical accountability bullets or CABs that then we're able to point to and say, this is exactly the top 5 responsibilities that this person carries or that this role carries. And so this is actually really helpful whenever you begin to kind of think about expanding your team. You go back to your accountability chart, you begin to look visually as where is this person gonna sit? Are they gonna be on the growth side of the business, marketing and sales? Are they gonna be on the delivery and fulfillment or production side of the business? Sometimes people would refer to that as the service side of the business. Depending on the type of industry you're in, it could be production. Construction companies will call it kind of production. I typically kind of look at the business really functionally in 3 ways. I look at it on the growth side, number 1. Number 2, I look at that on the fulfillment side, so fulfilling on whatever it is, it is that we're selling. And then number 3 is just operationally of the business itself. So I look at growth, fulfillment, and operations. And so once I kind of get my hands around that, then I can figure out, all right, where's this position going to— where's this position going to sit? So really, at the end of the day, it's very simple. It's a very simple visual. Look, there's a ton of tools you can use for this. You could use Miro. We use Miro. I love to visually map out boards in Miro. You could use a tool like Lucidchart to do this. You could also do this in an Excel spreadsheet, potentially, with, you know, different boxes on there. You could do it in a Word document or a Google document, putting visuals there. Maybe your very first one could be the most simple, and that is you go to a whiteboard, and on the whiteboard you use some sticky notes. Uh, you could use some sticky notes like this if you're watching this on YouTube, and have someone's name— or excuse me, the title, the person that owns that role, and then the 5 critical accountability bullets below. and those 5 critical accountability bullets are the top 5 most important responsibilities. Now, look, clearly every role in an organization carries so many different responsibilities, and they execute on so many different tasks in a business. I mean, the more— the smaller a business is, the more typically generalized you'll have to see team members. They have to operate a little bit more as Swiss Army knives. And as an organization grows, then they begin to kind of take off some of those responsibilities individually, and they're able to shrink down, and then they're able to go deeper in whatever it is that they do. And the reason is people can become more specialized because you have more resources to hire more people to do it. And that's why understanding that is helpful of why that it feels so different when your business is $500,000 versus whenever your business is doing $2.5 million in, in business. You can specialize more in a $2.5 million company than you can at a $500,000 company. Now, does that mean I think that somebody at $500,000 should be doing sales, operations, service, fulfillment, and be in your EA? No, clearly I don't. But I think specifically, it gets a little more gray in terms of the things that people do. They step in, they step up to fill in gaps along the way. And I think that's okay. The bigger you get, the more you grow, the more you can carve off some of those responsibilities for somebody over time. We just had this happen. I mean, somebody on my team was carrying 3 different roles. 3 different roles, not 3 different responsibilities, 3 different roles. We shrunk that down, took one of them off off and shrunk it down to 2. Now she is able to go much deeper into those 2 things because she started to begin to feel that she was stretched a little thin. Now, a year and a half ago, it worked just fine, worked just fine. But as the company has grown, things have expanded. What once was okay is no longer the case. So create a visual representation Take the title, then the person that fulfills that title, and then down below, list out 3 to 5— typically, we're going to be pretty easy for you to have 5 critical accountability bullets of the responsibilities that that person carries. I hope this was helpful to you. Till next episode, lead well and go be great.