NEW YORK, NY--(Marketwire - April 6, 2011) - Major companies are highly aggressive in efforts to recruit and retain great talent. But they often fail, not because of their talent practices, but because of the antiquated organizational structures they expect talented people to work in. 

Talented leaders often fail because the organization's structure is wrong: key players don't have budgets or authority, the company moves too slowly and the structure promotes destructive conflict. Younger, motivated people with highly sought-after skill sets often find their talents underutilized. The result is that talented people lose motivation and the organization suffers "brain drain" as they look for opportunities elsewhere.

Companies often fail to recognize, let alone solve, the design/talent problem -- they throw coaching and training at it, when they should instead redesign the organization to help talent thrive, according to Amy Kates and Greg Kesler managing partners at Kates Kesler Organization Consulting and coauthors of Leading Organization Design: How to Make Organization Design Decisions to Drive the Results You Need (Jossey-Bass, December 2011). 

Organization design -- the deliberate configuration of business units, processes, support functions, geographic offices, reporting lines and responsibilities -- is essential for organizations that want to get the most out of their talent. But most companies think that talent, motivation and creativity should be addressed through talent-management practices, not through the design of the organization, they explain.

"Talented people join and stay in an organization to have an impact -- to do work that matters to them and to make a difference. But a badly designed organization keeps them from having an impact or satisfying their values," says Ms. Kates.

"A well-designed organization promotes positive conflict -- the kind that motivates and energizes talented people by forcing them to break boundaries and work creatively across barriers. Organizational silos create demoralizing conflict and a frustratingly slow pace," says coauthor and Kates Kesler managing partner Gregory Kesler. "Unnecessary layers and narrow spans of control remove people from the customer and often distance them from motivating, interesting work."

  • How sub-par organization design debilitates talented people. "When organizations don't address design, they allow complexity to grow unchecked," Ms. Kates says. "Fiefdoms and boundaries develop, while lines of authority become unclear. The pace slows down as work requires approval in more and more business units and bureaucratic layers. Talented people get frustrated, and they look for opportunities elsewhere so they can get more traction. Size doesn't have to mean bureaucracy, but it takes fresh organizational thinking. Companies worry about losing talent to Google -- but Google is itself losing talent to Facebook as it becomes bigger, slower and less agile."

  • How good organization design can energize talent -- and why creating "good conflicts" is key. "Bad complexity slows an organization down," says Mr. Kesler. "Effective organization design creates connections among the many competing objectives of a large company -- balancing global and local authority, setting up good, creative conflict. For example, when a global brand manager and a local sales organization share responsibilities, and are rewarded for working together, they will fight for their interests so that both the global brand and the local market are addressed. Talented people thrive on that kind of energy. There are boundaries, but you can reach across them -- and good creative work happens when boundaries are broken. Nothing creative happens without working across functions."

  • Why talent at the top doesn't notice bad design while talent in the middle suffers. "Top-level talent is often insulated from the effects of organization design," says Ms. Kates. "Top-level leaders create the matrix, but the burden of living in it falls on middle management. It's mid-level talent that experiences the frustration."

  • How to unlock the value of talented people. "Companies need to recognize the importance of addressing strategy, talent and organization design together. It's hard to do, but absolutely necessary. When it comes to talent, specifically, companies must set up structures and systems that make the work 'matter': taking away layers of approval; making it possible to work across cross-functional boundaries; creating matrixes that are complex for the right reasons -- that give full scope to both global and local interests, and allow managers and the organization as a whole to 'finish the play.' These steps will make it more likely that you can keep the people you want," Mr. Kesler says.

  • Which companies are getting it right and using organization design to attract and keep talent. "GE is an example of a company that gets it," Ms. Kates says. "They provide training that specifically addresses how to manage and function effectively in their matrix. They bring together training with organization design, and apply an awareness of how the two interact."

"Most leaders agree that great talent can overcome poor organization. But if organization and talent can be aligned for performance, who would choose the lesser course? The most effective leaders realize that a thoughtful balance of center-based leadership with local initiative is critical, that the greatest creativity and innovation emerges from managed conflict between central and local initiatives and perspectives. Creating this kind of tension should be the goal," Mr. Kesler says.

To arrange a conversation with Amy Kates and/or Gregory Kesler, please contact Frank Lentini at Sommerfield Communications, Inc. at (212) 255-8386 /

Greg Kesler and Amy Kates are the authors of Leading Organization Design: How to Design Your Organization to get the Results You Want (2010, Jossey-Bass).

Amy Kates is a managing partner at Kates Kesler Organization Consulting. In addition to consulting work, Kates teaches organization design in the M.B.A. program at the Executive School of Business in Denmark and through Cornell University. Amy is the author of several publications including the books Designing Dynamic Organizations and Designing Your Organizations with Jay Galbraith. She is an editor of the journal, People & Strategy

Greg Kesler, managing partner at Kates Kesler Organization Consulting, has worked with more than 50 major corporations in Europe, North America, Latin America, Africa and the Pacific. He has published numerous articles on succession planning, executive development and human resources strategy. Before beginning his consulting career, Mr. Kesler held senior HR-management positions in three Fortune 200 companies in the US and Europe.

About Kates Kesler Organization Consulting

Kates Kesler Organization Consulting is an organization design and strategy firm which provides leading companies with organization design assessment and implementation, executive talent development, human resources capability building, and management development programs. The firm's methodology, which has been refined through 20 years of application and learning, is the standard in the field and is used at companies such as Intel, Bank of America, Dell, Merck, Nike, MetLife, John Deere, Coca-Cola, Beiersdorf, SC Johnson, Gallo, and Disney.

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Contact Information:

Frank Lentini
Sommerfield Communications, Inc.
(212) 255-8386