As the evolution of cultures started, also organizations started to shape and change through history. What did they use to look like and what are their latest characteristics?
Organizational Transformation
There are three perspectives on organizational transformation.
- The History of organizational development. How did organizations as we know them come about? What theoretical models are there? From what value consciousness are companies controlled today?
- Practice. With the help of concrete companies, structures and corporate cultures are analyzed that work according to the color scheme used in “Teal”, the current highest phase.
- Applying and transferring the knowledge you have learned. How can a company become “Teal” or, in other words, self-managing and holistic?
100,000 years ago organizational development began, consisting of hunters and gangs. Over the centuries, this changed to different complex organizational structures which Laloux gave colors.
Red: Give me what I want!
Amber: Rules and norms of the group
Orange: Success and Innovation (Knowledge)
Green: Togetherness and harmony (values)
Teal: The purpose of the organization, service to the world, identification
Red organizations (Impulsive)
Red organizations are classic power systems that developed 10,000 years ago and you can still see them in mafias. Selfishness, exploitation, authoritarian hierarchies, and power imbalances are the characteristics of these organizations. Tasks are given with chains of command but with short term perspectives. Long term vision has no value in these organizations.
Amber organizations (Conformist)
These organizations are characterized by formal hierarchies, stability, and control. Government organizations, public schools, and churches are good examples of them in today’s life. Just like armies, they have formal rules and processes, and even their dress codes are fixed in accordance with their status. They are good at maintaining but not at changing.
Orange organizations (Achievement)
These organizations are achievement-oriented and have reflections in the industrial revolutions. Meritocratic ideals, governments and let’s say, Wall Street are good examples. The focus is on growth and innovation for the sake of more money. The more dollars, the better, no matter what truly benefits this world.
Green organizations (Pluralistic)
The green ones value relationships and ideals like equality, harmony, community, etc. They operate like families and have a democratic form. The top and middle management share power to empower employees at the front. Southwest Airlines and Ben & Jerry’s are examples of greens. You should know that they are good at reshaping the old structures but they can be slow at delivering outcomes.
Teal organizations (Evolutionary)
These organizations are good at taming the ego and trying to live as a whole as a “living system”. Self-management replaces hierarchical pyramids. There are more refined ways of dealing with the world.
By looking at your ego from a third-person POV, you can see how fears and ambitions run your life, where you make decisions according to external factors. In Teal, you should shift from external to internal factors to see if the decision you are making is right and you are happy with it. “In Teal, the ultimate goal in life is not to be successful or loved, but to become the truest expression of ourselves and to be of service to humanity and our world.”
There are three breakthroughs in Teal
Wholeness: Normally when you dress for work you wear a professional mask and you don’t show your whole entity. But if the culture of wholeness is supported a meaningful relationship will be developed in the business units leading to benefits like smarter groups, creativity and innovation, improved employee satisfaction. To get to this part, first, a safe space should be created to invite deep listening, and authenticity. Colleagues should be allowed to lead skill training programs and use interpersonal skills infused with the company’s values and cultures. Also instead of HR, it is better if the related team that wants a new member does the interviewing and onboarding process, as they are the ones who should accept the new member.
Evolutionary purpose: Instead of predicting and controlling, organizations should sense and respond. The old school practice in organizations is to visualize five years ahead and plan for the next year but in Teal, organizations should look twenty years ahead and plan for the next day.
Instead of predicting the future and analyzing the best solution which is a waste of energy and time, we should make peace with complexity and try to find a workable quick-implementing solution. This way the decision can be improved at any time, based on new information and experiments.
The changes can come from anyone in the organization, just like how nature works. Innovation won’t happen according to plan, but when a part of the system senses a change in the environment, it will try to find an appropriate response to it, where experiments come to the surface. the whole organization is mandated to sense the future and help with strategy.
Self-management: The organization is based on peer relationships and not hierarchy or consensus. The power is distributed between everyone and decisions can be made by all. Trust is what matters here and the assumptions are that people are creative, responsible adults able to make serious decisions, and they want to use their skills and talents to contribute positively to the organization and the world. Also organizational agility increases. Roles are picked up, discarded, and exchanged over time. Meetings are held when needed and productivity rises to more than 15%.
When talking about self-management, one should keep in mind that self-managing organizations do not make everyone equal, but they let employees become the best version of themselves. Overlapping hierarchies can be seen here, in the matter of development, skill, expertise, etc., where employees can help each other and add value.
There are different structures in Teal organizations depending on the strategy and size of the organization, the structures are different.
| Structure | Size of the organization | Explanation | Example | |
|---|---|---|---|---|
| Self-Managing Team | Small organizations | A small organization in any sector that can be run as a single, self-managing team. | Converge |  |
| Parallel Teams | Large organizations with short value chain | when work can be broken down in ways that teams have a high degree of autonomy, without too much need for coordination across teams. There will be a need for some people or teams to take on coordinating or supporting roles with a narrow focus. | Buurtzorg, FAVI |  |
| Web of Individual Contracting | Large organizations with a long value chain and continuous, stable processes | Roles and commitments are not discussed in teams, but between colleagues who work together. Commitments can be formalized in a written document. | Morning Star |  |
| Nested Teams | Large organizations with long, deep value chains | There is a hierarchy of purpose, complexity, and scope, but not of people or power. | pharmaceutical, software companies |  |
Regarding the Nested Teams, the circle at the top pursues the overall purpose of the company, while several sub-circles pursue a specific part of the overall purpose. “Decisions are not sent upward, and cannot be overturned by members of overarching circles. The sub-circle elects a representative to the overarching circle that sits on all that circle’s meetings and vice versa. “
Three critical components help reduce risk in Teal organizations.
- Self-managed organizations should find out a way to deal with employees who take advantage of the freedom gained from having no manager. Peer-pressure systems are some good solutions. For example, Measuring performance publicly, or periodical presentations of teams with their peers to show what their project is and what values it can add to the company.
- An effective conflict resolution process is needed. It’s better if those involved speak honestly in a one-on-one meeting, and if that didn’t help, mutual agreed-upon numbers of peers mediate. In the worst-case scenario, the CEO or someone in C-section tries to resolve it.
- Utilizing some form of the advice process is required to make decisions by anyone in the organization. First, the person must seek advice from all people with expertise on the matter. Through this advice, there are times when someone else is found to be a better choice to decide according to their experience or expertise, but they also should get input from affected parties. Failing to uphold the advice process can result in firing the person in charge. Another way is to have a team decide at monthly meetings when new roles are proposed and the existing roles are discarded. Whether a person or team, in crisis or peace times, the chosen ones should utilize the advice process.
Teal Transition
There are different ways to transform into a self-managed Teal Organization, but you should keep in mind that it cannot happen in one night. It is better to start by considering the concepts and experiment gradually depending on the vision you have. You can give the workers more flexibility in deciding their roles little by little or try to practice the concept of wholeness which can improve employee satisfaction and effectiveness. Or you can even start with developing opportunities to let employees at all levels suggest ideas or take initiatives using the advice process. Keep in mind that it is not easy for people at lower levels to change into a self-managing kind of employee as they are used to being ordered around. You should make everyone ready psychologically.
Any effort to make a positive change will add value to your organization. The important thing is to decide on the best for you and your organization and to start experimenting.
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