What is one issue when organizing around hierarchical functions?

When organizing around hierarchical functions, one significant issue is that it does not align with how value flows through an organization. In a traditional hierarchical structure, departments are often siloed, focusing on their specific tasks without adequate collaboration or communication with other areas. This can hinder the seamless flow of value across the organization, as teams may prioritize their own objectives over the organization's overall goals.

In contrast, a value-focused approach emphasizes cross-functional teams that are designed to deliver end-to-end value. These teams draw from various disciplines and skills, allowing for better collaboration, faster decision-making, and a more efficient response to customer needs. This alignment with value flow is crucial in Agile methodologies, where the aim is to create products and services that meet customer demands effectively. Therefore, not organizing around how value flows can lead to inefficiencies and a lack of responsiveness in an Agile environment.