Before reading this article, we invite you to think about what the organizational structure of your dreams would be like… Some questions can help you: Would you have more autonomy in decision-making? Would you like to feel that everything you do has a purpose? Would you long for more authenticity, community, passion? Well… hopefully, you have managed to let your imagination run wild! Please keep that image in your mind. We will return to it when talking about “teal evolutionary organizations”.

For now, let’s reflect on what an organization really is.

Technically, organizations can be defined as an association of people who combine individual and team efforts in order to achieve collective purposes. Closer examples of our reality are companies, associations, government agencies or public entities. Also, more distant from today, are tribes and fiefs of the Middle Ages. Regardless of the type, the fact is that since homo sapiens the existence of some type of human organization has been observed, be it for the purpose of survival, dominance or collaboration. More broadly, organizations are a reflection of several elements, such as history, paradigms and needs.

Organizations are complex and changeable. They are subject to changes coming from the external environment, in addition to being able to lead their own transformations according to what they understand about the world and what they aim to achieve. However, changes in management structures or models, especially when ingrained, are often difficult to perform.

And why is it so difficult to change?

Because organizational changes are related to what is most abundant and at the same time most limiting: our paradigms. Our beliefs. Here we are talking about individuals, people. Organizations do not change alone; they need their individuals to do so.

In this sense, one of the main organizational paradigms that is currently in check is the pyramidal hierarchical format where there are few managers making decisions and most workers at the base receiving orders and executing “commands”. These structures seem to be collapsing. The world changes very fast and top decisions tend to be slower. In addition, hierarchical structures undermine employees’ sense of belonging, generating demotivation and constant talent losses.

In this context, the Belgian researcher Frederic Laloux, dissatisfied with the slowness with which organizations adapt to new realities, leaves his job and spends two and a half years investigating management practices of more horizontal companies, which foment the development of their employees’ potentials.

Frederic Laloux defined criteria and selected 12 organizations in Europe and the USA, from 100 to 40,000 employees, from different sectors such as electricity, food, health, and technology. From this investigation, coupled with his experience in different types of organizations, Laloux launched a book that has been revolutionizing several organizations: “Reinventing Organizations: A Guide to Creating Organizations Inspired by the Next Stage of Human Consciousness”. In this book, he presents a conceptual model of organizations’ evolution, including the stages and paradigms that govern them. For each stage, he defines a color: red, amber, orange, green and teal (blue-green).

We have prepared a summary of these five stages. But before proceeding, keep in mind that the purpose here is not to classify one stage as better or worse than another. Rather, shedding light on organizational self-knowledge and providing support for the implementation of new management strategies. An organization can be in more than one stage at the same time, but there will usually be some predominance.

Which of the stages below do you believe your organization is in? Do any of them remind you of the organization of your dreams?

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Red (impulsive): Characterized by establishing and enforcing authority through power.

These organizations appeared more than 10,000 years ago, with small tribes in search of survival. A leader, through his strength, has power and leads the organization, keeping people afraid to achieve their goals. There are no formal hierarchies or titles. This limits growth. They are suitable for chaotic and less complex environments. Current examples of red organizations are mafias or street gangs.

Amber (conformist): Views of what is right are internalized according to a belief common to the group. Self-discipline is exercised to adhere to these views, and shame and guilt are used to enforce them.

Here we have already passed into the era of agriculture, states and organized civilizations. Divisions by social classes appear. Thus, a new way of organizing society emerges. It’s established a pyramidal hierarchical structure with defined roles and command and control. Power is not for the strongest but is related to the occupied position. Amber organizations brought a culture of long-term planning and stable structures. They operate very well in environments that change slowly. The Catholic Church and the Army are examples of amber conformist organizations.

Orange (achievement): The world is seen as a machine: predictable, and able to be scientifically understood and controlled to achieve the desired outcome.

Coming more strongly as a result of the Industrial Revolution. Standardization, mass production and the possibility of ascension through merit are pursued. This increases competition worldwide and also within organizations. The hierarchy still exists, but conformity is not welcome now. Power can be gained. People’s intelligence is valued for generating innovations and results-based management reaches all levels of the organization. But they are still slow in the decision-making process. This is probably the most common type of organization today. Their limit is on talent retention. Examples of orange organizations are Wal Street Banks, Nike, Coca-Cola or IBM.

Green (pluralistic): Characterized by a sense of inclusion, and a drive to view and treat all people as equal. A common metaphor used for relationships is that of a family.

After two great world wars, the highly rational and competitive model of the orange conquers begins to be questioned. What about values, morals and ethics? Harmony, tolerance and equality inspired by hippy communes of the 1960s have an influence on these organizations. They may be hierarchical, but the position of the leader is as a servant who provides autonomy and is concerned with team development. Decisions are made by consensus and people seek shelter as if the organization were their family. On the one hand, these organizations break previous paradigms, introducing the importance of relationships at work. On the other hand, the absence of more practical tools does not favor the generation of results and the tendency is to return to the orange control. In addition, decisions by consensus (with everyone’s agreement) tend to make decisions slower than expected. Lean and Agile movements emerge in this context and some examples of organizations are Southwest Airlines, Ben & Jerry’s and many nonprofits and NGOs.

Teal (evolutionary): The world is seen as neither fixed nor machine-like. Instead, it’s viewed as a place where everyone is called by an inner voice to contribute based on their unique potential.

Starts the Fourth Revolution, the Industry 4.0 Revolution, the Revolution of the teal evolutionary organizations. This Revolution integrates and automates technologies (such as nanotechnology, artificial intelligence, biotechnology, energy storage systems, drones, 3D printers, etc.). Centralized and hierarchical relations are losing space for network relations. This is a revolution marked by the high speed of change, never seen before. In relation to the green pluralistic, these three topics are progressing:

Self-management: Leadership is much more situational; command and control are replaced by autonomy and confidence. With support tools, the decision-making process is much more based on consultation (advice from experts and those affected by decisions). Thus, delays are avoided in processes where everyone (even if indirectly involved) would have to agree by consensus.

Wholeness: The practices of this type of organization favor the integrality of the employees within the company. In other words, it is encouraged that the individual works with both his emotional, more sensitive and spiritual side and with his rational side (much more common), favoring authenticity. Individuals bring all of who they are to work, not just the characteristics deemed to be professional.

Evolutionary purpose: Teal evolutionary organizations are like a living organism, which evolves and has a meaning and a life of its own. This is a paradigm break, and where there is a turning point for this type of organization. Not trying to control the future but listening and understanding the purpose of the organization and the real environment that surrounds it. It is a process of constant discoveries, observation of the environment and evolution.

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But do teal evolutionary organizations really exist or are they a dream?

Perhaps at this point, you have asked yourself: But teal evolutionary organizations seem so unreal, do they really exist? Yes, teal evolutionary organizations already exist! They are not a utopia. Just as the famous exponential organizations are not. The best-known examples are Buurtzorg, Morning Star and Patagonia.

Now, we invite you to remember that image of the organizational structure of your dreams. Does it have anything to do with teal evolutionary organizations?

Conclusions

In 1911, Frederick Taylor published “The Principles of Scientific Management” in which he presented “Management” as the revolution that would raise the productivity of organizations in the industrial era. He was correct. In fact, it was a major revolution. Even today, more than 1 century after Taylor’s publication, most companies (not just industrial ones) still apply his theories based on the hierarchical and functional division.

This last paragraph may have caused you some discomfort. Normal!

Niels Pflaeguing in his book “Organize for Complexity” argues that the forms of management based on Taylorism were disseminated in a totally different context, of less dynamism and complexity, making them unsuitable for current days. Another recent movement, Responsive Organizations, seeks to connect people and organizations that want to find a new balance between practices that have been useful in the most predictable context of the past and those that may be more applicable today. Therefore, the intention here is to show that the researcher Frederic Laloux who presented his theory with the 5 organizational stages is not alone.

It is likely that even you reader, who was interested in this topic, is engaged in finding different ways to manage your teams. You have also realized that times are different, and organizational structures need to change. The need is causing new paths to emerge organically.

Who knows, starting with this greater awareness you will be able to implement or influence changes that you believe are necessary for the management and organizational structure of your company of the future. Who knows, you can even start building the teal organization of your dreams…

References:

The future of management is teal – Strategy+Business
Reinventing organizations
Reinventing organizations – Frédéric Laloux
Teal Organizations
The Evolutionary Purpose of Teal Organizations

by Adriana Spinola

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