Ever sense that your company's culture is degrading for no apparent reason? That after years of working as a tight, highly engaged team, your people seem increasingly detached, almost disaffected - even though on the surface, little appears to have changed in the business?

If you're experiencing a sense of entropy - if it feels as if you're watching your key staff ride a long, slow slide into previously unthinkable mediocrity, then it's highly likely that the culprit is something mundane, even prosaic: your org chart.

Here's the connection: In the early days - during the growth stages we call Early Struggle and Fun - most organizations have a necessarily tight, well-functioning, easily understood and responsive org chart. Even though it might not be called that (there may not, at times, even be a formal 'org chart' in existence), everyone knows how decisions get made, who wields power, who has authority, and who has influence. As a result, the line between thought, decision and action is short and efficient. Think of something, talk to the one or two people necessary, get an OK, and move on.

Then, over time, the org chart begins to morph into something entirely different. As the business becomes bigger and more complex, various rogue elements creep in to the org chart, draining it of both efficiency and effectiveness as a machine for decision-making. And, eventually, faced with having to navigate this Rube Goldberg-like monstrosity every time they need to get something done, key employees increasingly, instead, begin to not waste their discretionary effort by even trying.

Be warned - this doesn't just happen to Very Large Companies. Organizations of all sizes can find some or all of the key elements of a dysfunctional org chart creeping in. Take five minutes and run a quick self-assessment on your own org chart, and ask yourself honestly - how many of these are you prone to?

1. Titles that aren't.
So way back when, you had two great sales people, and you decided to call them both "Sales Managers". Except now, a couple of months (or years) later, it's abundantly clear that one of them is, and one of them isn't (a manager, that is). Or you decided to call someone "VP, Finance", but now it's abundantly clear that what you really have is a senior bookkeeper, at best.

Get rid of the ambiguity and confusion. Flush out job titles that are no longer appropriate by changing or removing them. Yes, it's difficult and sensitive to do, but the alternative (slowly losing your businesses identity and edge) is much worse.

2. Reporting lines that lie.
It says on your org chart that the marketing team reports to your VP Marketing. But everyone knows that key marketing decisions are really made by you. The VP of HR and the VP Finance technically both report to the CEO, but everyone knows the VP of HR has to run everything past the VP Finance first before standing a hope of approval.

Take a red pen to your org chart and change the reporting lines to reflect reality. And if you don't like what you see (you may conclude that some of the 'real' reporting lines are pretty screwed up), then change reality to fit what it should be.

3. Roles that are self-defined.
There was a time when you depended on your first flush of managers to define what their job was. It's natural to look to your first Sales Manager, or your first Director of Quality Control, to shape the role. After all, you never had one before so it was hard back then to know precisely what you wanted.

If, however, some years later your managers are still self-defining their roles, that's a problem. By now, you should know what you want from each key role in the org chart, and be able to clearly define it - without reference to the current incumbent.

Remove dependence on any one individual to define key roles in your business - draft a job specification for each that clearly defines that role independent of the person currently inhabiting it.

4. Jobs for the boys (or girls).
Any entrepreneur worth their salt has at some time shoehorned a job together for sister Jenny's kid, Henry.

Any entrepreneur worth their salt also reaches a point where they know it's no longer possible to do so without risking the loss of high performers who resent the lack of meritocracy. If you have some FOBs (Friends of the Boss) around who aren't there solely on their merits, start making a plan to sunset those roles now.

5. Red-headed stepchildren.
You never really liked investing in IT (or Marketing, or R&D). So while you have an IT (or Marketing, or R&D) department, it's stuck in the basement, strangled of funds and reports to the janitor's cat.

Well, now it's time to accept that you can't run a business without a fully functioning IT (or Marketing, or R&D) department. Pull it out of the basement, fund it properly and put someone competent in charge.

Get one-on-one coaching on the specific next steps your organization needs to succeed. Join Inc. and Les McKeown in Washington, D.C.

Published on: May 14, 2015
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