This is probably the most inspiring book for companies that want to be relevant in the future as well.
Once every now and then I read something that completely resonates with everything I believe in and stand for. This was the case when I read “Reinventing Organizations” by Frederic Laloux.
Introducing the concept of how organizations have evolved over time, Laloux perfectly shows why our (organizational) world looks like it does today. But could it be that our current worldview limits the way we think about organizations?
“Could we invent a more powerful, more soulful, more meaningful way to work together, if only we change our belief system?” – Frederic Laloux
I’d love to give you a quick overview of the most important things I took out from reading this book and exploring this question.
Evolving from Red to Teal Organizations
In the roughly 100,000-year history of humanity, we have gone through a number of successive stages. At every stage we made a leap in our abilities – cognitively, morally, and psychologically – to deal with the world. With every new stage a new way to collaborate, a new organizational model was invented.
In the Red paradigm, starting around 10,000 years ago, organizations are structured around a strong leader who has absolute power over others. Power structures are constantly in flux as subordinates jockey for position, rather like wolves in a wolf pack around the alpha male. Red Organizations can still be found today in the form of street gangs and mafias.
In the Amber paradigm, the organization chart with boxes and reporting lines appears, resulting in a static pyramidal structure of stacked layers of hierarchy and a clear chain of command. People identify with job titles and job descriptions and their place in the hierarchy. “Command and control” is the dominant leadership style: decisions are made at upper levels of the hierarchy while lower levels simply follow orders.
Today these organizations are still very present: most government agencies, public schools, the Catholic Church, and the military (an army is a good metaphor for these organizations) are run on Amber principles and practices.
In Orange organizations, the pyramid remains the fundamental structure. In the pursuit of innovation and to beat competition, more degrees of freedom become necessary.
Project groups, virtual teams, cross-functional initiatives, expert staff functions, and internal consultants drill holes into rigid functional and hierarchical boundaries of the pyramid to speed up communication and foster innovation.
“Command and control” gives way to “predict and control”: managers and employees are given targets to achieve, and some freedom in how to achieve them. New departments, such as Human Resources, Research & Development, Marketing, Product Management, etc. are formed to support Orange organizations’ pursuit of innovation. Central staff functions, like Finance, IT, Risk, Audit, etc. become very prominent in large organizations, often concentrating much power at headquarters, far away from operating units.
Today, Orange is arguably the dominating worldview of most leaders in business and politics. Choose any of the defining brands of our time – say, BMW, Shell, Nike, or Coca Cola – and you’re likely to have picked an organization whose structures, principles and cultures are inspired by the Orange paradigm.
Green organizations still operate with a pyramidal organizational structure and strong staff functions, but there is an emphasis on empowering front-line employees. Top and middle managers are effectively asked to share power and give up some control: to move from being doers, problem solvers and fixers to be servant leaders. This is often symbolized in the notion of “inverted pyramid”, where the CEO at the bottom supports senior and middle managers who support front-line employees.
Examples of Green Organizations are Southwest Airlines and Ben & Jerry’s.
Teal organizations consciously operate as complex adaptive systems with distributed authority, often structured as decentralized, self-managing teams or networks. The static hierarchy of the pyramid gives way to fluid natural hierarchies, where power flows to people who have most expertise, passion or interest. The dynamic adjustment – or actualization – of hierarchies and power is ensured thanks to a range of specific practices.
Source: “Reinventing Organizations”, by Frederic Laloux
The shadows of each worldview
One paradigm is not better than the other; each stage is well adapted to certain contexts and can deal with certain complexities.
At the same time every paradigm, seen from a higher stage, comes with its own lights and shadows, its healthy and unhealthy expressions. The dark side of the Achievement-Orange paradigm for instance is hard to ignore these days: corporate greed, political short-termism, overleverage, overconsumption, and the reckless exploitation of the planet’s resources and ecosystems.
What colour is your company?
What determines which stage your organization operates from? It is the stage through which its leadership tends to look at the world. This means that an organization cannot evolve beyond its leadership’s stage of development.
Is this good or bad news? What does this mean? And does this stand in the way of creating a future-proof organization? I’d love to read your comments about what you think is the worldview your organization operates from, and what you see as the consequences.
So, what’s next?
I highly recommend you start reading “Reinventing Organizations”, if you haven’t done so. You can buy or download the book on Laloux’ website, and he even offers a pay-what-feels-right option.
Then, if this concept resonates with you and you’re in a position to ignite a Teal Organization, it’s time to start exploring. Are you open to embrace the Teal worldview? Like really? Could you initiate a small isolated pilot organization, that – completely independent from its roots – creates learnings and best practices?
“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” – Richard Buckminster Fuller
If you are interested in a workshop or speaker about “Building Teal Organizations”, or want to explore how to gain experiences with operating from a Teal paradigm, don’t hesitate to contact me.