The Future of Management is Teal
This ERA post features an article from strategy+business adapted from Frederis Laloux’s book, Reinventing Organizations: A Guide to Creating Organizations Inspired by the Next Stage of Human Consciousness. Many of us sense that the current way we run organizations has been stretched to its limits and we are increasingly disillusioned by organizational life. Laloux suggests that another, more soulful organizational model may be just around the corner.
Highlights from the Article
In survey after survey, business people make it clear that in their view, companies today are places of dread and drudgery, not passion or purpose. All of us yearn for better ways to work together – for more soulful workplaces where our talents are nurtured and our deepest aspirations are honored.
The premise of this article is that humanity is at a threshold; a new form of organization is emerging. A number of pioneering organizations in a wide variety of sectors – profit and nonprofit – are already operating with significantly new structures and management practices. They show how we can deal with the complexity of our times in wholly new ways, and how work can become a place of personal fulfillment and growth.
A History of Organizational Paradigms
In describing the pattern of organizational evolution, Laloux draws on the work of a number of thinkers in a field known as “developmental theory.” One of its basic concepts is the idea that human societies, like individuals, don’t grow in linear fashion, but in stages of increasing maturity, consciousness, and complexity. Using colors to identify them, the successive stages of management evolution include:
Red – Description: Constant exercise of power by the chief to keep foot soldiers in line. Highly reactive, short-term focus. Thrives in chaotic environments. Key Breakthroughs: Division of labor and command authority. Current Examples: Organized crime and street gangs.
Amber – Description: Highly formal roles within a hierarchical pyramid. Top-down command and control. Future is repetition of the past. Key Breakthroughs: Formal roles (stable and scalable hierarchies) and stable, replicable processes. Current Examples: The military and most government organizations (e.g. public school systems, police departments).
Orange – Description: Goal is to beat competition; achieve profit and growth. Management by objectives (command and control over “what,” freedom over “how”). Key Breakthroughs: Innovation, accountability, and meritocracy. Current Examples: Multinational companies, investment banks, and charter schools. Note: Orange is the dominant management paradigm in today’s business world.
Green – Description: Focus on culture and empowerment to boost employee motivation. Stakeholders replace shareholders as primary purpose. Key Breakthroughs: Empowerment, egalitarian management, and stakeholder focus. Current Examples: Businesses known for idealistic practices (e.g. Ben & Jerry’s, Southwest Airlines, Starbucks).
Today, in small but increasing numbers, leaders are growing into the next stage of consciousness, beyond Green. They are mindful, taming the needs and impulses of their ego. They are suspicious of their own desires – to control their environment, to be successful, to look good, or even to accomplish good works. Rejecting fear, they listen to the wisdom of other, deeper parts of themselves. They develop an ethic of mutual trust and assumed abundance. They ground their decision making in an inner measure of integrity. They are ready for the next organizational paradigm. Its color is Teal.
The Nature of Teal
In Teal organizations, self-management replaces the hierarchical pyramid. The organization is seen as a living entity and is oriented toward realizing its potential. Like previous leaps to new stages of management, this new model comes with a number of important breakthroughs:
Self-management. Teal organizations operate effectively, even at a large scale, with a system based on peer relationships. They set up structures and practices in which people have high autonomy in their domain, and are accountable for coordinating with others. Power and control are deeply embedded throughout the organizations, no longer tied to the specific positions of a few top leaders.
Wholeness. Whereas Orange and Green organizations encourage people to show only their narrow “professional” selves, Teal organizations invite people to reclaim their inner wholeness. They create an environment wherein people feel free to fully express themselves, bringing unprecedented levels of energy, passion, and creativity to work.
Evolutionary purpose. Teal organizations base their strategies on what they sense the world is asking from them. Agile practices that sense and respond replace the machinery of plans, budgets, targets, and incentives. Paradoxically, by focusing less on the bottom line and shareholder value, they generate financial results that outpace those of competitors.
Making purpose the cornerstone of an organization has profound consequences for leadership. In today’s dominant management paradigm (Orange), leaders are supposed to define a winning strategy and then marshal the organization to execute it, like the human programmer of a machine who controls what it will do. In the Teal paradigm, founders and leaders view the organization as a living entity, with its own energy, sense of direction, and calling to manifest something in the world. They don’t force a course of action; they try to listen to where the organization is naturally called to go. There is no strategy document. Gone are the often dreaded strategy formulation exercises, and much of the machinery of midterm plans, yearly budgets, cascaded KPIs, and individual targets. Instead of trying to predict and control, they aim to sense and respond. Practices based on sensing and responding, combined with self-management, lead to high levels of innovation. In a self-managing, purpose-driven organization, change can come from any person who senses that change is needed.
Every stage of organizational evolution is more mature and effective than the previous stage, because of the inherent attitude toward power. A Red leader asks, How can I use my power to dominate? An Amber leader asks, How can I use it to enforce the status quo? An Orange leader asks, How can we win? A Green leader asks, How can we empower more people? A Teal leader asks, How can everyone most powerfully pursue a purpose that transcends us all?.
Read the article here.
The Enlightened Rebel Perspective
Frederic Laloux provides a very enlightening and useful framework for understanding the nature of the various organizations that we’ve all experienced throughout our careers. We work with clients who are embedded in a variety of organizational systems reflecting the various colors of his evolutionary spectrum – with Orange certainly being the most common.
In our experience an increasing number of people in organizations really are yearning to create and work in more “soulful” environments, where work is more productive, fulfilling, and purposeful. We’re excited about the prospect of a new organizational paradigm where this dream can become a reality!
We want to be part of accelerating the movement toward a new form of organization which, as Laloux observes, has profound implications for leadership. Let us help you develop the mindset required to be a Teal leader!
