The New Big Deal Is Called “Teal”

The New Big Deal Is Called Teal

By Julia Marczi.

Creativity and innovation in business seem to be more important then ever. Many companies  are desperately seeking new ideas, trying to keep up while still applying a traditional organizational structure that has not been reviewed and changed for a long time.

If we stop to consider this for a moment, it becomes clear how little sense it makes.

It seems obvious that continuing to push for innovation without innovating the system itself is flogging a dead horse, but since this is the norm, we take it for granted that this is the only way. The well-known hierarchical, rule-based management style has its benefits and has worked well for a long time, but as the world is changing, it seems to have reached its limits and cannot serve us anymore.

It is time to realize that if we want to unleash human potential, we need to change the surroundings and provide the right conditions for those new ideas to thrive.

One of today’s disruptive trends is doing exactly that. A new organizational paradigm is emerging, turning our current concept of work and management upside down. This gamechanger that might transform the way we work is called “Teal”.

The Teal-Evolutionary paradigm

The concept of Teal is largely based on the emergent levels of existence theory of Clare W Graves. Frederic Laloux applied the model to organizational forms in his book Reinventing organizations (2014), to great success. No wonder: it hit a nerve by addressing an important topic — namely the poor and inefficient way we manage organizations today and its painful consequences such as  employee disengagement, poor decision making and lack of innovation, to mention a few.

Laloux examines the evolution of human consciousness, explaining how Humanity invented a new, more productive organizational model every time when it shifted to a new stage.

These different organizational paradigms are the following:

  • Red — Red organizations emerge in unpredictable, chaotic environments where the presence of one strong leader might be the only possibility for survival. People operating out of this thinking system see the world through the lens of power. This kind of organization is  highly reactive and unable to embrace a long-term focus. Its innovation is the division of labor. Good examples of the Red model are the mafia and wolf-packs.
  • Amber — the breakthrough of this paradigm is the implementation of long-term perspective, processes and clear formal roles.  These, together with a well-defined hierarchy enable stability within the organization. Power is practiced by rigid, top-down, command-and-control kind of leadership. The Catholic Church and the army are typical Amber organizations.
  • Orange — sees the world as a complex mechanic machine ruled by self-interest and drive for achievement. Orange is about success,  reaching targets, beating the competition and leading in a predict-plan-and-control way. In pursuit of these goals, the Orange model applies innovation, meritocracy and accountability as breakthroughs. Many of today’s companies are driven by the Orange mindset.
  • Green — the Green paradigm tries to overcome the inhumanness of Orange by adopting new values. It pursues harmony, tolerance and equality by embracing all stakeholders (not just the shareholders.) As an innovation, these organizations place culture over strategy and focus on belonging, feelings, and empowerment. The dominant metaphor for Green is the family — real-life examples are Starbucks or Ben & Jerry’s.
  • Teal — the next leap in the history of human consciousness and organization.  Teal organizations break with hierarchy, distributing authority and empowering everyone in the organization. They strive for a fluid structure that can change and adapt rapidly. Their driving force is not profit maximization but a higher purpose — they ask what the world needs and how they can deliver true value and align their activities accordingly.

These different models co-exist — people and organizations are operating from different paradigms living alongside each other. This is the case also within one entity — a certain organization can have attributes coming from different paradigms. For example, a company can have profit maximization as its main goal (Orange) but aspire to maintain a culture of belonging and empowerment (Green) at the same time.

The New Big Deal Is Called Teal
Image source: Lean and Agile Adoption with the Laloux Culture Model by Peter Green

Teal organizations bring the following three breakthroughs:

  1. Self-management: assuming that people are trustworthy, good and accountable, and can deliver without being controlled all the time, Teal organizations work without (traditional) managers, dogmatic rules and policies. Project management is also radically simplified. Job titles are abolished and are replaced by roles that are picked up based on each individual’s talents, interests and skills.
  2. Wholeness: people are encouraged to show up at work with their whole personality, not just a professional, edited version of themselves. Being human, having doubts and emotions and making mistakes are OK. “Failure” is considered as an opportunity to learn.
  3. Evolutionary Purpose: instead of considering the organization as a mere vehicle for delivering management targets and maximizing shareholder profit,  it is seen as an organic, living entity with an ever-changing purpose. Teal organizations ask questions like: How can we serve the world best? How can we deliver real value? The organization and its members are actively listening all the time to this purpose, adjusting its activities to it, instead of following well-defined, detailed management plans.

This might sound anarchic at first, but it is not. There are well-defined rules and practices — like the advice process — to make sure that the organization runs smoothly and everything stays on track.  If people follow them, experience shows that the Teal model works, regardless of the size of the company and the industry. Laloux cites several Teal companies, like Morning Star and Patagonia, that are operating with more than a thousand employees and are not just doing OK: they are market leaders in their industry.

…crazy, isn’t it?

Only at the first glance — after all, most of us have been socialized in a pretty different way. From early age we had to learn to conform to plans and rules. Over the course of years we learn to hide certain aspects of our personalities, as we experience it to be safer. By the time we arrive at our first workplace, we have accepted hierarchies as normal and the predict-control-style-leadership as the (only) way of making things work.

But as it turns out, it is not. And that’s good news for us, because these management models seem to be not only outdated but, worse, are in many cases destructive and insufficient. In our rapidly changing world where we face new challenges day by day that cry out for quick, out-of-the-box solutions,  the hierarchical, rule-driven organization simply cannot keep pace anymore. Due to their rigid inherent logic, these slow-moving behemoths are unable to react quickly and fail to unlock human potential and creativity. Moreover, many of them tend to treat people as disposable cogs, rather than as humans.  Employees are viewed as a set of skills, replaceable at any time. As a natural consequence, people often feel powerless and soon become disengaged. Finding neither fulfillment nor appreciation, they try to nourish their talents and passion outside of work (aka “work-life-balance”).

The Teal approach seems to solve most of these burning problems.

Its flexible and fluid culture allows the organization to adapt rapidly to changing circumstances, and allows employees to participate more freely, based on their passion and skills. As the hierarchy and controlling mechanisms are being replaced by a culture based on trust and transparency, people are empowered to take initiatives and make decisions autonomously, thereby becoming interested and engaged in their work. Human potential and innovation can flourish, and new ideas can thrive.

By breaking the box we can empower people to get out of it.

A leap in consciousness — and a step into the unknown

Before you fire all your managers at the next Monday meeting, it is important to be clear that Teal is not an easy way to go: it is not a magic formula or a new management tool that you can buy in and implement in a day. It goes far beyond that — and this is its beauty and difficulty at the same time.

Teal embraces certain basic assumptions and a different way of thinking that are not always easy to follow. (As we all know, changing the way you think is one of the hardest things in life.) It requires challenging yourself — your worldview, your attitudes, the way you think about people and their capabilities. It makes you ask fundamental questions like: Who am I? What are my values? What is my purpose?

Going Teal is a journey on the road less traveled — it takes guts, engagement and openness. But it may be the way to go: not only because it can give back the joy of fulfilling, engaged work, it also helps us to unlock the creativity we need to tackle our challenges and create a more humane world.

Do you want to learn more about the Teal-Evolutionary paradigm and its practical implementation? Join Teal for Startups, a growing community of  future-minded pioneers. We are developing a framework for entrepreneurs and startups to make adopting Teal easier — you are welcome to join us in the co-creation.

Many thanks to Yan Eperon, Adam Pearson, Travis Marsh and Bhargavi Kotte for reviewing and to Peter Green for the image.

Reinventing Organizations, Frederic Laloux, 2014


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