Reinventing Organizations

I’ve heard a lot of buzz about the book ”Reinventing Organizations” in the Lean & Agile community. Now I have read it for myself. It is written by Frederic Laloux, has 278 pages and was released in 2014. The book describes the emergence of a new organizational model, that is more suitable for companies in the rapid changing world we all live in today. They are called Teal Organizations.

”Reinventing

Content

The book is divided into three parts and they are:

  • Part 1 – Historical and Developmental Perspective
  • Part 2 – The Structures, Practices, and Cultures of Teal Organizations
  • Part 3 – The Emergence of Teal Organizations.

The first chapter starts with describing how different organization models have evolved from past to present, representing them by colors:

  • RED organizations – ”Constant exercise of power by chief to keep troops inline”. Guiding metaphor: Wolf pack. Current examples: Mafia.
  • AMBER organizations – ”Highly formal roles within a hierarchical pyramid”. Guiding metaphor: Army. Current examples: Military.
  • ORANGE organizations – ”Goal is to beat competition; achieve profit and growth”. Guiding metaphor: Machine Current examples: Multinational companies.
  • GREEN organizations – ”Focus on culture and empowerment to achieve extraordinary employee motivation”. Guiding metaphor: Family. Current examples: Culture driven organizations.

An organization cannot evolve beyond its leadership’s stage of development, meaning for example that GREEN is not possible with a ”military management”.

What is the metaphor of Teal organizations? Founders of teal organizations talk about living organism or living system. Three major breakthroughs is needed to become Teal:

  • Self-management – A system based on peer relationship, without the need of hierarchy or consensus.
  • Wholeness – An inner wholeness to bring all of who we are to work (beyond the ”professional surface”)
  • Evolutionary purpose – Organizations having a sense and direction of their own.

How is self-management expressed? At AES (a global company in the energy sector) they are using voluntary task forces instead of fixed staff functions. It has multiple benefits, employees can express talents and gifts that are not shown in their primary role. This also develops a true sense of ownership and responsibility.

How do you make decisions without formal managers? In general, we think it can be done in two possible ways: By hierarchical authority (”someone call the shots”) or by consensus (”everyone gets a say”). At AES (and other Teal companies) an ”advice process” is used:

”It’s very simple: in principle, any person in the organization can make any decision. But before doing so, that person must seek advice from all affected parties and people with expertise on the matter”.

How about internal communication? Everybody expects to have access to all information at the same time (including salaries). Meetings? A Teal organization have far less meetings than other organization types, thanks to the empowerment of individuals (doing things without asking for permission first). Offices? Winston Churchill once said ”We shape our buildings, and thereafter they shape us”. This is true to office and factory spaces, they subtly shape our thinking and behavior. How about profit? ”Profit is like the air we breathe. We need air to live, but we don’t live to breathe”. Meaning that another (higher) purpose than just profit is needed.

If you want to start to become a Teal organization you can look at ”Holocracy”. It was created by Bryan Robertson at Ternary Software. He has now moved on to HolocracyOne, a consulting and training firm to spread Holocracy in organizations. Holocracy can be described as an ”operating system for an organization”. What is needed? The CEO and members of the board need to get and support the ideas of the Teal organization. Otherwise there is no idea in trying, unfortunately.

Recommendation

I can now totally understand the buzz about ”Reinventing Organizations”. It does a great job in describing the Teal organization that I fully support and also thinks is the future. Maybe the book is a bit too long, the last 1/3 feels like much of repetition of the ”message” already stated earlier. Anyhow, a solid must read!

All the best,
 Tomas from TheAgileist

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