Option 4 is the most challenging structure. A strong functional leader must take on the development of a new focus area for the company. New skill sets must be developed to drive the significant change that’s required throughout the organization. Functional experts will need to be corralled continually for work to be advanced.
This is not insurmountable. In fact, this is the default approach that most companies take for all the reasons that are rattling around in your head right now.