Why do we want a systemic company structure? Because in order to manage our organization effectively, we must be able to see the  interdependencies of the system.  Therefore, we must manage our organization according to the systemic model.

On the other hand, in order to manage effectively we must have control over the organization and therefore we must manage it according to the hierarchical model. Why? Because if we divide up our organization into so many boxes, we can exercise control over each one and over the whole thing.

The new managerial structure emerges from the resolution of the conflict between hierarchy vs. system.

As with any conflict, we solve it by surfacing the assumptions. The assumption underlying the hierarchical vision is that control has to be exercised everywhere in an organization.
 

Managing a stable system

In a stable system, the only part which needs to be controlled is the constraint. The mechanism that allows us to do that  is buffer management. Accordingly, any effective form of control can only stem from the control of the constraint and the buffer protecting it.

It is not possible to outline in general terms what a control structure for a systemic organization should be. This depends on the organization. A suitable structure for a hospital would be very different from one for a manufacturing company or a software house. However, it is clear that whatever governing mechanism we  design, it must favor effective management of the buffer.
 
If we want to implement a systemic, Deming-Goldratt based management approach that allows us to achieve results and long-term improvement, we have to create a suitable managerial structure. This means challenging our beliefs how and where control should be exercised, as well as how we measure, motivate and reward people in our system.

All this requires great energy and courage. However, by this stage in our transformation process, we have achieved concrete results to spur us on. We also have the  Thinking Processes Tools we need to bring about a change of this magnitude.