The Future May Be Teal
An evolutionary process that began more than 100,000 years ago has brought us to a threshold from which a new form of organization is emerging, a business theorist and author believes. Frederick Laloux thinks civilization is outgrowing the common organizational model focused on bottom lines and short-term goals and preparing for “more soulful workplaces” where talents are nurtured and aspirations honored.
Laloux, who describes his thinking in a Strategy + Business story, is the author of “Reinventing Organizations: A Guide to Creating Organizations Inspired by the Next Stage of Human Consciousness.” New York Times business writer Tony Schwartz called it “the most important and inspiring book I’ve ever read.” Laloux, a business consultant from Belgium, had spent 10 years as a management consultant for McKinsey& Co., and four years on his own when he became sadly disillusioned with big business organizations. He began researching organizations he thought had characteristics that made them “places of passion and purpose,” not drudgery and dread. He found a dozen that he considered soulful, successful and emphasized the “wholesness” of the human organizational effort. Seven were in the U.S., five we in Europe. Three were nonprofits, nine were for- profit.
In his Business + Strategy article, he explains a basic concept of organization evolution is that “human societies, like individuals, don’t grow in linear fashion, but in stages of increasing maturity, consciousness and complexity.” He says borrows a descriptive system developed by the philosopher Ken Wilbur, using sequences from the light spectrum, from infrared to ultraviolet, to assign colors to the different stages.
When humanity shifted from small tribes to chiefdoms and proto-empires, he writes, the first real organizations were small conquering armies. They tended to be crude violent groups who focused on authority and power. Wilber labeled them Red. Today’s gangs, terrorists and organized criminals often operate along these lines. Hierarchical organizations, which developed with formal roles and a static organization chart—such as the Catholic Church—were labeled Amber. Laloux says Amber organizations were a breakthrough in their time: They reduced violence and produced irrigation systems, cathedrals, the Great Wall of China and other remarkable physical and social structures. Laloux says this model is still visible today in the military and many government and educational institutions.
Laloux says the Renaissance, the Enlightenment and the early Industrial Revolution led to the Orange organization, where effectiveness was the basis for decision making and the goal was to get ahead and to “play bet with the cards one is dealt.” Innovations of that stage were meritocracy and accountability, and the idea of the organization as a machine. Laloux says most large, mainstream companies today operate with Orange management practices. Laloux says Green companies are the next evolutionary stage. They emphasize cooperation over competition, and invest in values, coaching, mentoring, and empowerment of employees Southwest Airlines and Starbucks are examples, according to Laloux. He says the next stage is Teal, and Teal organizations emphasize the whole human person, including aspirations and capacities of employees, and focus on self management of people within their own domains. He says their organizational strategies are based on a sense of evolutionary purpose, and what the world needs from them, rather than on budgets and targets. Paradoxically, he says, by focusing less on the bottom line and shareholder value, they generally do better financially than conventional competitors.
One example is Buurtzord, a Dutch nursing care provider with 9,000 employees, Laloux writes. Nurses work in teams of 10 to 12. Their goal is to help the sick and elderly patients they visit lead rich autonomous lives. The nurses decide which patients to serve, where to locate offices, which hospitals, doctors and pharmacies they will work with, and they monitor their own performance. Management tasks are spread across all team members, and leaders emerge as situations demand, based on expertise, interest and willingness. Two of the U.S. companies Laloux considers Teal are Patagonia, a $540 million California based manufacturer of climbing wear and outdoor apparel, with a mission of aiding the natural environment, and Morning Star, a tomato processing company with 400 to 2,400 employees depending on the season. Read about Laloux’s research and his full list of Teal companies here.