Traditional organizational charts fail because most companies design them around the people they have (at that time) rather than the needs of the organization. The result is that as people come and go or move around the organization, the org chart breaks.
The correct way to build your organizational chart is to take a structure first, people second approach. This will ensure that your org chart is helping you fill your organization with great people for the needs of your organization.
This video will provide more context and help guide you through some of the tough decisions that may arise when you build your org chart the right way.