Have you read the book of Frederic Laloux about reinventing organizations? If you have never heard of his work, we can really advise you to buy his book or watch one of his key notes.
We found his writings particularly interesting because it has clear links with our work around analyzing connected organisations and mapping ecosystems.
What is an organization? Organizations are best defined as ‘a group of individuals, large or small, that are cooperating under the direction of executive leadership in accomplishment of certain common object.’ (K.Davis, 2008).
Organizations have been around since the beginning of time. The first cavemen formed groups and tribes to create better living circumstances. These tribes are not yet organizations but are the start of forming groups. As humans evolved, so did their way of organizing.
These evolutions have, according to Laloux, resulted in 5 types of organizations.
To really get a detailed explanation on the evolution of organizations, we advise to read the book Reinventing Organizations (F. Laloux, 2012) which can be bought or downloaded on his website. We will try to capture the gist of it for you.
Evolution of organizations
Organizations have evolved because the old model didn’t fit a new situation. The first real organization were the Red (impulsive) organization. The leadership was based on power and fear. It was/is very useful in periods of chaos. This type can still be found in the mafia or militia’s.
The red organizations became Amber (conformist) organizations. These were based on hierarchy and stability and resulted in scalable organizations. This type was used for a long type and can still be found in governments and public companies.
Because Amber organization couldn’t react to quickly changing conditions, Orange (achievement) organizations, took their place as the most common used type. This is the case until today. Orange organizations used bonus and other (positive) incentives to sustain leadership and focus on competition. This has introduced innovation and meritocracy and has invented departments like marketing, research and development and product management.
This view hits his limits once workers start to feel like a part of the machine and aren’t engaged in work anymore. That is why Green ‘pluralistic’ Organizations have emerged to provide workers with more meaning and less focus on profits. They have prioritized the stakeholder-view and the need for corporate culture and empowerment.
It is now clear that this has its limits as well. Hierarchies still exist in green organizations and this clashes with the need for freedom. Decision making can be really slow by the constant need of consensus.
Describing the teal organization is not easy. It goes against everything you know (or think you know) about company structures.
Laloux boils it down to 3 pillars:
- Evolutionary purpose
This is a new way of distributing power. To quote Laloux: ‘In these organizations, no one is the boss of anyone else, there is no more pyramid, there are no more layers of hierarchy, almost no staff functions. Instead they use different types of self-managing structures and peer based processes that prove to be much more powerful, inspiring and agile than the staid old pyramid.’
This goes further than empowerment via inverted pyramid structures or self-managing teams.
Teal-organizations invite employees to show up ‘as a whole person’ instead of only their professional self. This way they ensure that their employees can use their passions, energy and creativity and not limit themselves to one way of thinking and handling.
Rather than pushing a company in one direction via KPI’s, budget plans, strategic plans,… Teal-organizations try to find their ‘natural way’. They see the organization as a living organism and try to let it grow like one.
This requires a new way of leadership where leaders have to listen to where they want to go.
Summary of the different types
|Red||predatory||Division of labor
Here is a real nice video that explains the different types in a nice way.
It’s all about ecosystems
Reading Laloux’ theory about the evolution of organisations, we immediately recognized the same concepts in the work we are doing around (business) ecosystems.
Over the last decades, connected organisations have been evolving. Besides formal business networks, federations and associations, innovation driven and goal-oriented accelerators have been emerging as well as cooperatives and (formal and informal) communities of creative, entrepreneurial people. They gather to test new ideas, join into ventures and kickstart the global economy.
These new forms of collaboration allow allies to connect and find support and investment.
These new collaborations are enabled by people from diverse backgrounds who share a commitment to contributing to a better future
- inspired by new forms of leadership where leaders are ‘convenors’ who understand how to create social, economic and cultural value and move happily between these different worlds
- with an ‘open’ ethos and strong shared vision, getting organised in small collectives, co-operatives, fab lab, maker spaces, online platforms or large physical structures
- with a focus on developing digital technology, enterprise and social innovation, supporting new ventures, global collaborations and growth, and new kinds of relationships between creative practice, business and audiences.
The new forms of collaboration are teal organizations with a distributed leadership. They create local clusters within a bigger organization or a network of local partners that have the power to act. They strive together for a common goal while acting as independent organisations. Innovation in teal organisations is not centralized but originates when different actors sense a need for change and choose to interact with each other.
Where we come in
An important aspect of teal organizations is their ‘evolutionary purpose’, growing as a living system, learning from every interaction with users, partners and stakeholders. It requires the capability to carefully listen, observe and to truely understand the needs and dynamics in a market place. That’s where we can help.
DataScouts helps you to develop situational awareness and insights in the dynamics in your market for you to take informed decisions and find the natural growth of your organization.
This is a mapping of the Brussels Creative ecosystem, a cross-disciplinary platform enabling new and disruptive collaborations in order to co-create the right climate for cross-over innovation and disruption using the city as launchpad for digital transformation.
Start gathering ecosystem intelligence today and create your own ecosystem!
The best way to learn more about Laloux’s work is by buying his book. You can download it as an e-book, a pdf or buy the real book on his website: http://www.reinventingorganizations.com/. We found a lot of his conference talks on his channel very inspiring and helpful. And they are available in different languages!
Their are also some other posts available that give you more details or summarize the book really good. We’ve listed a few that inspired us for this blog.