The four functions of a company

It’s been said before, but it’s worth repeating; the people in your company are the most important asset you have. A brilliant business idea can be easily ruined with the wrong people, but you will always succeed with the right people – regardless of the quality of the business idea. I’ve experienced both scenarios and can only agree. But even the right people need to know what to do and how to prioritize. By fulfilling the four functions, your company can achieve unrestricted success.

No machine or equipment can replace the diversity, innovation and passion of humans. But finding the right employees is difficult, but definitely possible by being distinct, thoughtful and utilizing your corporate culture.
But your company employees need to cooperate and complement each other – without cooperation you’ll never reach your true potential. To deliberately build a skilled, motivated and efficient team is a factor for success. I’ll try to clarify a few concepts, so that you can easier determine what skills and types are necessary in your team.
You should always distinguish the following 3 elements when you think about what kind of employees are necessary in your organization:

• Function
• Role
• Responsibility

The goal is that all three of these elements should co-exist. The functions are to be included by the company’s role distribution and everyone should feel a sense of personal responsibility to fulfill their duties.

Function

To consider the employee’s function, rather than their title or role, will make a fundamental difference in your organization.
A company needs only four features to achieve optimal performance and these are:

• The Creator
• The Salesman
• The Banker
• The Project Manager

This is according to a model by Ernesto Sirolli, who in his model only mentions three roles. I don’t think three roles capture the entire content of a company, so I have chosen to add the role ”Project manager”.

The Creator
The function which produces what the company delivers to the client. It may be the programmer or the consultant. The organization’s responsibility is to ensure that the Creator always have time to create and are not occupied in other processes. The goal is that the majority of your employees should be Creators in your organization, because they are the ones who produce what the customer wants to pay for. If the Creator isn’t occupied in the producing procedure, it will show itself in the form of frustration and the delivery to the customer will suffer.

The Salesman
The function which ensures that the company’s product or service is offered on the market. The function has to network, be visible, talk to customers and suppliers and constantly create new relationships. Without salesmen, you will never reach the market in a good way – no matter how good the product and the service may be. Many think that the Salesman has to take care of the customers after the sale. However, my experience is that the Salesman will never do this in a qualitative manner and it’s necessary for another function to do this. Without The Salesman in your organization you’ll never sell your products, and the Salesman must always be focused on selling for this exact reason.

The Banker
The Banker will keep track of income, expenses, measuring results and monitoring the objectives that have been set up. Without the Banker you won’t have a completely overview of the business operations and will have to work on ”intuition”. The Banker doesn’t rely on emotions and instead calculates and produces facts, which makes the company reliable. Without the Banker, you won’t earn any money since the profit margin is entirely dependent on the Banker.

The Project Manager
This function ensures that all parts of the company work together in the most optimal way. The Project Manager is an excellent judge of character who listens and makes sure that everyone feels continuously motivated and have set clear goals. The Project Manager is an expert in caring for customers and should do so as soon as the Salesman has completed a deal. The customers love the Project Manager! Without the Project Manager, the company will lose quality, deliver in time and lack in corporate culture.

Four functions become a functioning business

With these four functions, you can get a perfectly operative and balanced company. But what happens if you are the only one in the company? Will these functions be fulfilled? The solution is to either buy competence or simply ignore the functions.
By buying the functions I mean hiring people who have the knowledge, personality and attitude to fill these functions, of course. Just imagine how much easier your recruitment will be when you already know which function the employment requires.
But the second scenario is less than satisfactory. I know a lot of entrepreneurs who say they do everything in their company and that they could never imagine recruiting anyone else because they get on fine as it is.

Wake up! You’re living in a fantasy

I don’t know anyone who can handle all these functions simultaneously. Exceptional people that I’ve worked with were able to manage a maximum of 2 of these functions in a reasonably good manner, but never more than that. The reason why you can’t and shouldn’t be able to handle multiple functions simultaneously is all about focus. You can only handle what you’re responsible of with the right focus, because the goal has to always be to be the best in the world at what you do. If you settle for less, then you can ignore function and do everything at the same time.

Roles

The role is the occupation or title of each employee in the company. We all have more or less fancy titles on our business cards, but the title is actually uninteresting to me. The only thing that’s important is what function your role fulfills. Always ensure that whatever role you’re filling as an employer only consists of one function, otherwise there’s a risk that the person will find it difficult to perform their duties in a good and responsible manner.

If you want to inspire your employees to become world leading at their job, you should just give them the possibility to do that

One person, many roles
A person having many roles becomes significant in a small company, where it’s common to have up to 4 simultaneous roles. You can have a role as a salesman, member of the company’s management, Board member and owner. It’s easy to confuse these roles, and especially if you have multiple owners where it can easily become even more complicated. For that reason, it’s very important to separate the roles in accordance which forum you are in. However, your function is always the same, no matter which forum you are in.

See below for pointers on how functions and roles can take shape in a company:

So, can you have different functions and roles depending on which company you work for? The answer is, of course, yes. You always have to adapt to the company’s needs and whatever is currently being prioritized. But you have to always be aware of what function you represent in your role. Below you can see my functions in the companies that I’ve had an operational role in:

So I’ve changed my function during my time at the companies, even though I didn’t always change my role or title.

Responsibility

Once you’ve entered a role at the company that is the limitation of your responsibility. We can’t demand any employee to have full responsibility for the general overview of the company.

Responsibility and alignment
Responsibility is what each individual within the company undertakes to perform in accordance with their role. Responsibility is always highly personal, no one else can and should take responsibility for another employee. If we were to begin performing each other’s tasks, it’ll never work in the long run. Only when everyone within the company feel a personal responsibility for their role can we have demands on each other and be confident that each party will do what they have undertaken. In other words, we agree (alignment) on what needs to be done and everyone takes their own responsibility.

Clarity
But one can only require personal responsibility from employees if there are clear areas of responsibilities, quantifiable goals and stated expectations. If the parties don’t agree on this, you can’t possibly know what has to be done and prioritized in a manner that helps the company’s goals to be reached. Clarity is an underestimated condition for employees to be able to take personal responsibility.

The right to take decisions
With responsibility comes the right to take decisions. There is nothing more frustrating than when you have the responsibility of an issue, but the decision to implement changes lies in the hand of someone else. It’s actually impossible to take personal responsibility of those types of cases and it’s easy to just ignore the task, since the decision lies with someone else anyways. You become a victim in your own role and situation. We don’t want to create victims in our organization – we want to create successful employees who constantly strive for development and improvement.

Board and Management group

If you’ve kept up with my way of reasoning, you already know the answer to how a management group and Board should be assembled. They should, of course, capture all four functions needed in your company, and in this way, utilize all the knowledge and skills in order for your company to work both operationally and strategically. A title or role doesn’t automatically make you a member of a management group – we are trying to build a company, not feudalism.

Consider what functions are or aren’t being currently met in your company. What shortcomings do you have in your business today? If you keep the functions in mind, you’ll find it easier to define what should be prioritized and what functions you need to fill.
If the four functions are fulfilled and performed in an excellent manner, all your staff have clear roles and are taking personal responsibility, you’ve gotten a lot of steps towards success.

See Ernesto Sirrolis Ted Talk here.