Episode#54 – Reinventing Organizations

Reinventing Organizations

by Frederic Laloux

 

The book in one sentence

A history of organisational development and how the operating model for the next decades can look like.

 

My personal opinion

That’s a big one! Reinventing Organizations belongs definitely to my never ending Top 10 list!

Frederic Laloux researched past and present types of organisations. He does not only describes how these organisational models are operating, he describes as well why they operate the way they do. He aligns these so called “paradigms” to a colour schema. You can learn so much just by getting walked through the different “colours” of organisational evolution.

The more recent organisational structures give an understanding of why some things are today as they are. That’s why I want to explore them a bit more in the following paragraphs.

Amber: established structures and formal hierarchies are what this organisational paradigm is based on, bringing continuity to power and roles, based on stability and scalability, able to plan for the mid- and long-term. First processes are designed to make replication easier. The characteristics of the amber type are still present in most government agencies, public schools, religious institutions and the military: “Last year’s harvest will be our template for this year’s; next year’s classroom will be run with the same lesson plan as this year’s.” Members of amber organisations are looking for order and predictability. This comes on the price that change is suspicious and not welcome. “They operate on the hidden assumption that there is one right way of doing things and that the world is […] immutable. What has worked in the past will work in the future.” The organisational model expects that everybody stays in their box and to follow the rules. Or, as mentioned by Laloux, who quoted Henry Ford: “Why is that every time I ask for a pair of hands, they come with a brain attached.”

Orange: the next evolution accepts that there is no absolute right and wrong, more a better or worse. Decisions are now based on effectiveness: “the better I understand the way the world operates, the more I can achieve, the best decision is the one that begets the highest outcome. The goal in life is to get ahead, to succeed in socially acceptable ways, to best play out the cards we are dealt.” Authority is encountered with questions. Innovation and entrepreneurship are growing. Everybody has the chance to improve in his field and get to the top. But the orange paradigm brought advantages as well as disadvantages: “corporate greed, political short-termism, overleverage, overconsumption, and the reckless exploitation of the planet’s resources and ecosystems.” The goal is to make it to the next level, with the clear expectations that it will bring us more happiness. “More is generally considered better.”

These two organisational paradigms and their influence on our life and work are present to most of us, I guess. Let’s take a look at the next organisational evolution.

Green: leadership and trust are the foundational principles of green organisations. “Green leaders should not merely be dispassionate problem solvers; they should be servant leaders, listening to their subordinates, empowering them, motivating them, developing them. […] Frontline employees are trusted to make the right decisions, guided by a number of shared values, rather than by a thick book of rules and policies” or as Peter Drucker said it: “Culture eats strategy for breakfast.” A lot of green organisations can be found nowadays in the tech and startup world.

After Green follows Teal. Teal organisations incorporated three important pillars: self-management, wholeness and purpose.

Self-management: Teal organisations are empowering the frontline, the single teams and team members, to take responsibility and make decisions. Therefore, no direct or middle management is provided. “Learning to live with that amount of freedom and responsibility can take some time and there are often moments of doubt, frustration, or confusion. It’s a journey or personal unfolding, in which true professionals are born.” To achieve this level of self-management everybody needs access to the necessary training, coaching, tools and information. As a result, the organisation is based on trust rather than control: “The heart of the matter is that workers and employees are seen as reasonable people that can be trusted to do the right thing.”

Within the book, at the end of the chapter about self-management, you will find a great summary covering the topics structure, staff functions, coordination, projects, job titles and descriptions, decision making, crisis management, purchasing, information flow, conflict resolution, role allocation, performance management, compensation and dismissal.

Wholeness: It is important to see and understand the own organisation as a whole: “The more people, you know, the more you understand the whole, the more you’ll be able to come up with new ideas and turn them into reality.” If everybody has an understanding of the whole, there is no need for specific job titles. “The absence of a job title and job description forces us to search within ourselves for a personal, meaningful way to define who we are and what we can contribute.”

Laloux is relating organisational wholeness to the following areas: buildings, values and ground rules, reflective spaces, community building, job titles and descriptions, time commitment, conflicts, meetings, environmental and social initiatives, recruitment, on-boarding, training, performance management and dismissal.

Evolutionary purpose: the purpose of the organisation is the leading vision and the connection between all members or employees. Strategy develops from the intelligence of the group and execution is enhanced by the self-management of the single individuals. The organisation is focusing on progressing towards the purpose, not to win market share form the competition. And “in Teal organisations, profits are a byproduct of a job well done.”

The organisation’s purpose as the leading force is viewed within this chapter through the lens of it’s concept, strategy, decision making, competition, growth, profit, marketing, planning and budgeting, change, transparency, mood and the individuals purpose.

What makes this book so inspiring is that the things mentioned above are based on real-world examples. Laloux observed several companies e.g. AES, BSO/Origin, Buurtzorg, FAVI, Patagonia and many more to identify and derive the characteristics of Teal organisations.

Even better, the last chapter gives you some solid advice on how you can evolve or create an organisation based on the teal operating model. You will find a lot of best practices and reflections from all the people and companies Laloux researched for his book.

If you are inspired by the content above, I strongly recommend you to get a copy of this great book!

 

To whom I would recommend this book

Actually, I believe this is a topic everybody should take a look at. All in all, we are all part of social groups – be it a company, an organisation, a community. Depending on the circumstances and the purpose of the organisation, it is good to know which way of operating would fit best.

 

What I learned from this book

To say what I learned from this book is really difficult for me this time. Reinventing Organisations describes an idea you have to internalise. It is something you have to believe, to feel and to take this thought with you to your daily live.

  • “The greatest danger in times of turbulence is not the turbulence – it is to act with yesterday’s logic.” – Peter Drucker
  • “Seeing is not believing; believing is seeing! You see things, not as they are, but as you are.” – Eric Butterworth

 

Want to read this book?

Check it out on Amazon.com – Reinventing Organizations by Frederic Laloux

 

Publisher

Thanks to the publisher for printing such a great book!

Nelson Parker / Frederic Laloux