March | 2018 | Richard Haywood

Reinventing Organizations: A Guide to Creating Organizations Inspired by the Next Stage of Human Consciousness
by Frederic Laloux
My rating: 4 of 5 stars

This book looks at what it describes as the leading edge of organisational structure, what it describes as Teal organisations. For comparison it compares them against more established organisational structures which it describes as follows:

Red – Chief exercises power to keep people in line. The people are only together because of fear and thrives in chaotic environments and has a short term focus. Examples are mafia, street gangs etc. Similar to a wolf pack.

Amber – These follow a strict top-down command and control structure. Stability is values and this is implemented thought rigorous processes. As such, the future is the repeat of the past. Examples are the church, military, public schools, governments etc. Similar to an army.

Orange – The goal is to beat competitors, growing and making greater profit. Management is by objectives – allowing people control on how they do things but not on what they do. Examples are multinational companies etc. Similar to a machine.

Green – Within a classical pyramid structure but with a focus on culture and empowerment which allows people to be very motivated. Examples are culture driven organisations etc. Similar to a family.

This is in contrast to the primary focus of the book, teal organisations.

Teal – No pyramid structure, equality and a focus on individuals achieving their best. This is an evolution of the green organisation and can be clearly seen in comparison to Orange organisations.

	Orange	Teal
Structure
Organisation Structure	Hierarchical pyramid	Self Organising teams No manager but a coach if the team need
Coordination	Meetings at every level in the organisation, leading to meeting overload	No executive team meetings Coordination and meetings mostly ad hock when needs arise
Projects	Heavy process to try to control and prioritise resource	No project managers, people self-started projects Minimum (or no) plans and budgets, organic prioritisation.
Staff function	Lots of central staff e.g. HR, IT, purchasing, finance control, quality, safety, risk management etc	Functions performed by the team or a voluntary task force Few central staff only have advisory roles
Human Resources
Recruitment	Interviews by trained HR personnel, focus is on fit with job description	Interviews by future colleagues, focus on fit with organisations and with purpose
On boarding	(mostly an admin process)	Significant training in relactional skills and in company cuture Rotation programs to immerse oneself into the organisation
Training	Training trajectories designed by HR Mostly skill and management training	Personal freedom and responsibility for training Critical importance of common training that everyone attends
Job titles & descriptions	Every job has a title and a description	No job titles Fluid and granular roles instead of a fixed role
Individual purpose	(It’s not the organisations role to help employees identify their personal calling)	Recruitment, training and appraisals used to explore juncture of individual calling and organisation purpose
Flexibility & time commitment		Honest discussions about individual time commitment to work vs. other meaningful commitments in life High degree of flexibility in working hours, as long as commitments are upheld
Performance managment	Focus on individual performance Appraisals established by hierarchical superiors Appraisal discussions aims for objective snapshot of past performance	Focus on tema performance Peer-based processes for individual appraisals Appraisal discussion turned into personal inquiry into one’s learning journey and calling
Compensation	Decision made by hierarchical superiors Individual incentives Meritocratic principles can lead to large salary differences	Self-set salaries with peer calibration for base pay No bonuses, but equal profit sharing Narrow salary differences
Appointments and promotions	Intense jockeying for scarce promotions leads to politics and dysfunctional behaviour Silos: every manager is king of his castle	No promotions, but fluid rearrangement of roles based on peer arangement Responsibility to speak up about issues outside of one’s scope of authority
Dismissal	Boss has authority to dismiss a subordinate Dismissal mostly a legal and financial process	Dismissal last step in mediated conflict resolution mechanism In practice very rare Caring, support to turn dismissal into a learning opportunity
Daily Life
Office spaces	Standardised and soulless professional buildings Abundant status markers	Self-decorated, warm spaces, open to children, animals, nature No status markers
Meetings	(many)	Specific meeting practices to keep ego in check and ensure everybody’s voice is heard
Decision making	High up the pyramid Any decision can be invalidated by hierarchical superiors	Fully decentralised based on advice process
Conflict	(often glossed over, no conflict resolution practices)	Regular time devoted to bring to light and address conflicts Multi-step conflict resolution process Everyone trained in conflict management Culture restricts conflict to the conflicting parties and mediators; outsiders are not dragged in
Information flow	Information is power and is released on a need-to-know basis Secrecy towards the outside world is the default position	All information is available in real-time to all, including about the companies financials and compensation Total transparency invites outsiders to make suggestions to better bring about purpose
Values	(only on walls)	Clear values translated into explicit ground rules of (un)acceptable behaviours to foster safe environment Practice to cultivate discussions about values and ground rules
Reflective spaces		Quiet room Group meditation and silence practices Large group reflection practices Team supervision and peer coaching
Mood management		Conscious sensing of what mood would serve the organisations purpose
Community building		Storytelling practices to support self-disclosure and building community
Major organisational processes
Purpose	(no listening process)	Organisation seen as a living entity with its own evolutionary purpose The concept of competition is irrelevant; “competitors” are embraced to pursue purpose Practices to listen into the organisations purpose: – Everyone a sensor – Large group processes – Meditations, guided visualisations, etc. – Responding to outside prompting
Strategy	Strategic course charted by top leadership	Strategy emerges organically from the collective intelligence of self-managing employees
Innovation and product development	Outside in: customer surveys and segmentation define the offer Client needs are created if necessary	Inside out: offer is dfined by purpose Guided by intuition and beauty
Supplier management	Suppliers chosen based on price and quality	Suppliers chosen also by fit with purpose
Purchasing and investments	Authorisation limits linked to level in hierarchy Investment budget steered by top management	Anybody can spend any amount provided advice process is respected Peer-based challenging of tea’s investment budget
Sales and marketing	Brands positioned to fit consumer segmentation (outside in) Sales force driven by targets and incentives	Marketing as a simple proposition: this is our offer to the world (inside out) No sales targets
Planning, budgeting and controlling	Based on “predict and control” Painful cycles of mid-term planning, yearly and monthly budgets Stick to plan is the rule, deviations must be explained and gaps closed Ambitious targets to motivate employees	Based on “sense and response” No or radically simplified budget, no tracking of variance Workable solutions and fast iterations instead of searching for “perfect” answers Constant sensing of what’s needed No targets
Environmental and social initiatives	Money as extrinsic yardstick: Only if it doesn’t cost too much initiate Only the very top can begin initiatives with financial consequences	Integrity as intrinsic yardstick: What is the right thing to do? Distributed initiative taking, everyone senses the right thing to do
Change management	Whole arsenal of change management tools to get organisations to change from A to B	(“Change” no longer relevant because organisation constantly adapting from within)
Crisis management	Small group of advisers meet confidentially to support CEO in top-down decision making Communication only when decision is made	Everyone is involved to let the best response emerge from collective intelligence If advice process needs to be suspended, scope and time of suspension is defined

The book highlights that the only way an organisation can transition to Teal is lead by the CEO and with support of the board – others within the organisation don’t have sufficient power to be able to achieve sufficient change to make the transition. If the support of the board or CEO stops then a traditional organisational (more Orange) process will emerge.

Richard Haywood

Monthly Archives: March 2018

Book Notes : The Coaching Habit

Book Notes : Reinventing Organizations