Principle 7: Business Within a Business
Every manager is an entrepreneur whose job is to satisfy customers (internal and external) with products and services.

An organization chart determines everybody's specialty. Principle 7 describes the best way to define that specialty. It's simply this: Each group should be treated as a business within a business.

This inherently satisfies the first six principles:

1. It empowers people since jobs are defined by what they produce, not how they work.

2. It provides clear focus as a basis for specialization.

3. Domains are distinct and comprehensive when you design the organization chart as a mosaic of all the lines of business within the organization.

4. When a bigger group is divided at the next level into sub-businesses, the basis for substructure matches what people are supposed to be good at.

5. Separating distinct lines of business minimizes conflicts of interest.

6. A hierarchy of lines of business keeps together all the people in a given profession.

The business-within-a-business paradigm brings out the best in people. It sends all the right signals and rewards the right behaviors, harnessing everybody's creativity in service of an enterprise's best interests.

Organizational structure is the key to achieving such an entrepreneurial organization.

The guideline for structure is: Define groups as lines of business, bounded by the products and services they produce -- by what each "sells," not what it does.

The Building Blocks (described next) are a taxonomy of all the lines of business that exist within organizations. These Building Blocks are the ideal way to define groups in an organization chart.