Teal and The Castle – Part I

Intro

It is morning in the beginning of May in Stockholm, spring is in the air as it is one of the first sunny and warm mornings of 2017. I´m in Gamla Stan, on my way to attend a lecture at The Castle on how the teal paradigm is applied to individual and organisational development as well as participatory culture.

Teal? That’s some weird colour, right? What´s that got to do with organizations?

In the book Reinventing organizations [1] the Frederic Laloux recounts the evolution of how humans have organized and worked together in larger and larger organizational structures. The evolution of how humans work together is, according to Laloux, intimately connected to new perspectives that pave way for new organizational paradigms which, in turn, unlock new opportunities for creating prosperity.

Each new organizational paradigm has its own colour, its own unique characteristics and rests upon some breakthrough ideas which in turn shape people’s perspectives on what an organization can be [2]. In our day and age there are 5 paradigms operating simultaneously [3]:

Red – The ­metaphor for the red paradigm is the wolf pack. As an organizational form red emerged when humans organized into tribes. Red is characterized by the powerful leader which rules the group by fear, the leader gains credibility when a group´s/organization´s context is perceived as chaotic and the leader seems to be the only one that can guarantee survival. The breakthrough ideas of the red paradigm are:

  1. Command authority – where the leader sets a direction which others can follow. This allows the group to work towards a common goal.
  2. Division of labour – Increases group efficiency as individuals specialize in a specific task.

Red organizations are limited by their inability for long term planning, consequently as the perceived contextual stability increased, people sought other ways of organizing.

Amber – Emerged when the short-term nature of the red paradigm couldn’t accomplish long term success. Amber organizations are characterized by a strict hierarchical power structure, stability and a strict control over lower levels of the hierarchical pyramid. Consequently, the metaphor for the amber paradigm is an army where a hierarchical power structure based on status ensures long term stability. The breakthrough ideas that shaped the amber organization are [1][2]:

  1. Taking a long-term perspective – Ensures long term success of the group
  2. Formal roles for different levels of the hierarchy – Needed in order to keep efficiency
  3. The creation and institutionalization of strong processes – As organizational complexity grew, strong processes ensured stability

According to Converge [4] the view on people in an amber paradigm is that they are lazy and in need of direction. However, the amber paradigm becomes insufficient when external or internal conditions change in such way that rapid adaptation is needed.

Orange – Evolved when entrenched amber organizations were unable to adapt to changing conditions. Orange organizations are set up to create financial profit and achieve growth. Consequently, the orange paradigm is characterized by competition where innovation is crucial to stay ahead of competitors. Leadership is evolved from a “command and control” approach to an objective based approach where leaders point out the direction of “what” to do and lower levels of the hierarchy are trusted in “how” to achieve the set goals. The break through ideas that shape the orange paradigm are [1][2][3]:

  1. Innovation – the process of bringing an idea to a market through which it creates value.
  2. Accountability – for achieving the goals set by management
  3. Meritocracy – where individuals aren’t bound by status but are able to rise in the hierarchical order based on performance, creativity and skill.

The breakthrough ideas of orange create a worldview where effectiveness replaces morals and individuals are thought to be driven by material success [4]. This worldview is then reflected in how motivational programs within organizations are designed where extrinsic motivation such as performance based bonus programs, stock options etc. are utilized [5]. Most publicly held companies and corporations operate under the orange paradigm today [2].

Green – The orange paradigm hits its limits when employees find the profit objective unfulfilling and thus feel disengaged in the organization which consequently leads to a loss in productivity. The green paradigm evolves when individuals seek a deeper meaning in their work. Green organizations are characterized by a focus on delighting users and/or customers and distributed decision making based on shared values which in turn creates high engagement among members of the organization. The break through ideas that shape the green paradigm are:

  1. Empowerment of members of the organization – the meritocratic hierarchy of orange is retained in green organizations but as many decisions as possible are pushed to the bottom of the hierarchical pyramid where workers can make far-reaching decisions without managerial approval [5].
  2. Value-driven culture and purpose – green organizations are held together by strong shared values which in turn empowers decision makers and create a shared culture. Consequently, CEO´s of such organizations promote shared values over execution of strategy and development of members of the organization become a primary task [6]. Value-driven organizations tend to outperform typical orange organizations in terms of revenue growth [6}. Consequently, orange organizations attempt to mimic the value-driven approach by defining a set of values, post them on walls and then ignore them if that is more convenient for individual managers or the bottom line [5]. This in turn disillusion members of the orange organization and deprive the organization of the benefits of value-driven culture [6].
  3. Balancing the needs of multiple stakeholders – organizations within the green paradigm do see that they not only have responsibility towards shareholders but also towards employees, society at large, the environment, customers etc. [6].

The Agile and Lean movements emerge from the green perspective. The green paradigm reaches its limits when consensus building slows down decision making and when existing hierarchical structures, gained from orange, conflict with individuals’ desires of greater autonomy [2].

Teal – emerges when organizations figure out how to work effectively without a hierarchical structure, its metaphor is a living system which is under constant change and evolution. Consequently, teal organizations are characterized by a flat hierarchical structure or interlocking circles of evolutionary roles which align around an evolutionary purpose. Authority over decision making is distributed to all within the organization using an advice process, that is to say: members should seek the advice of anybody who would be affected by their decision. The advices need only be considered however and not necessarily followed thus the advice process differs from building consensus [2][6].

The break through ideas that shape the teal perspective are:

  1. Self-management – interdependent networks of small (10-20 individuals), autonomous teams are a common structure in teal organizations. There are no fixed hierarchical organizational charts or fixed roles within the teams, nor between teams. The decision rights and power flows to any individual or team who has the expertise, interest, or willingness to step in and contribute to a situation. Consequently, temporary hierarchies emerge and dissolve dependent on context [6].
  2. Evolutionary purpose – the purpose of a teal organization is not owned by any one person or team but evolves overt time through the learning and growth of the individuals and teams that an organization consists of.
  3. Wholeness – teal organizations have practices that allow individuals to bring not only their professional selves but also their personal selves to work [6].

With the teal worldview, the pursuit of recognition, success or wealth is replaced with the pursuit of a life well lived which might result in recognition, success or wealth thus the ultimate goal is to be of service to humanity and our world [6].

“Morning Star is a collection of naturally dynamic hierarchies. There isn’t one formal hierarchy; there are many informal ones. On any issue some colleagues will have a bigger say than others will, depending on their expertise and willingness to help. These are hierarchies of influence, not position, and they’re built from the bottom up. At Morning Star one accumulates authority by demonstrating expertise, helping peers, and adding value. Stop doing those things, and your influence wanes— as will your pay” [7]

It is important to note that the 5 perspectives mentioned above are not mutually exclusive, nor is there a hierarchical structure between them. Each perspective builds upon preceding perspectives in some way or another. For example, a primary orange organization can have groups operating under a green or teal logic and simultaneously have individuals that operate under a red perspective. Furthermore, a primary teal organization can use the tools of other paradigms if needed [2][5][6].

It all sounds swell but how does teal work in practice?

Great question! It ties back to that morning in the beginning of May when I was walking to The Castle to attend a lecture which later resulted in an interview with some of the founders.

To be continued…

Refrences

[1] Laloux, F. (2014). Reinventing organizations: a guide to creating organizations inspired by the next stage of human consciousness. (First edition.)

[2] https://www.youtube.com/watch?v=g0Jc5aAJu9g (2017-05-17 20:35)

[3] http://www.reinventingorganizations.com/uploads/2/1/9/8/21988088/140305_laloux_reinventing_organizations.pdf (2017-05-18 18:25)

[4] http://blog.convergeforimpact.com/wp-content/uploads/2015/02/Reinventing-Organizations-complete-summary-v6.pdf (2017-05-17 21:15)

[5] http://www.reinventingorganizationswiki.com/Orange_Organizations (2017-05-30 12:35)

[6] Kotter, J.P. & Heskett, J.L. (1992). Corporate culture and performance. New York: Free press.

[7]  Gary Hamel, “First, Let’s Fire All the Managers,” Harvard Business Review, December 2011, https://hbr.org/2011/12/first-lets-fire-all-the-managers (2017-05-30 17:54).

 

 

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