Strategies for Organization Design

4Hierarchy

“Change does not come by fixing, firing, replacing, or retraining the people, but rather it comes from changing the pattern.”

—Barry Oshry, Context, Context, Context (2018)

Hierarchy still dominates the thinking of top‐level executives in the largest organizations in the world. One story from early in my consulting career will help provide some context into just how bogged down in hierarchy companies can become when struggling with important decisions.

It was hour three of an all‐day executive committee meeting. After facilitating the team through some challenging decisions on how to transform their health system to be better positioned for the market shift that would reward health outcomes instead of patient volume, they decided on center‐led corporate functions that would support the markets.

In this case, they had decided to make region their primary axis for the hierarchy, and traditional support functions like human resources and finance were to be shared across the regions. We had arrived at the part of the day where we began to discuss the organizational architecture that would best deliver value to their patients and their care workers. My favorite part!

Or so I thought.

An hour goes by. Then two. Fast forward to hour four. Then five. The chief finance officer (CFO) and the chief human resources officer (CHRO) were intently engaged in a heated debate that began before lunch and was still going strong. The question on the table seemed deceptively simple: ...