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Reinventing Organizations – In Search of a New Leadership Paradigm

In my previous post, After 100 Years of Taylorism, We Need a New Leadership Paradigm, I discussed why Frederick Winslow Taylor’s scientific management paradigm is no longer a winning strategy in today’s world.

In this post, I want to put Taylor’s thinking into an evolutionary perspective by discussing the recent book Reinventing Organizations by Belgian consultant Frederic Laloux. In Reinventing Organizations, Laloux discusses how with every new stage in human consciousness also came a breakthrough in our ability to collaborate, bringing about a new organizational model.

The first section of the book is a look at the five different stages, which are all assigned different colors. In the second section, Laloux explores how eleven different companies already operate under the later paradigm and discuss some of the structures, practices, and cultures of these companies. Finally, Laloux gives concrete advice on how other leaders can start transforming their companies into the new paradigm.

The Five Stages

The Impulsive-Red period, which started around 10,000 years ago, was a major step up for humanity. It brought forth the first forms of organizational life in the form of chiefdoms, proto-empires, and slavery. Red organizations are held together by a continuous exercise of power in interpersonal relationships. The chief of Red organizations must demonstrate an overwhelming power to keep the rest of the organization in line. The Impulsive-Red paradigm is highly suitable for hostile environments, but Red organizations don’t scale well, because it’s hard to keep people in line who are separated from the chief by too many degrees.

The Conformist-Amber paradigm meant a shift from tribal I-want-it-so-I-take-it culture to an understanding of cause and effect and a deeper understanding of other people’s feelings and perceptions. This brought about a shift to states and civilizations, starting around 4,000 BC in Mesopotamia. Amber organizations are, unlike Red organizations, able to plan medium to long term and create stable and scalable organizational structures. People at this stage identify with their role and are content to stay in their particular box. The Amber paradigm is still present in the military, government agencies, and other organizations that rely heavily on command and control, order, and following formal processes.

The Achievement-Orange paradigm emerged in the Age of Enlightenment and the Industrial Revolution and is, today, arguably the dominating worldview of most leaders. Taylor’s scientific management is a clear example of the Orange paradigm, which has brought us unprecedented levels of prosperity since the Second World War. The Orange worldview is very materialistic, and anyone should be able to pursue his or her goals in life and be able to make it to the top. Orange organizations have seen breakthroughs in innovation, accountability, and meritocracy but still, maintain the pyramid as their basic structure. Innovation and cross-functional initiatives are executed using project groups, virtual teams, and internal consultants. People’s emotions and how objectives are met is less important, and unsurprisingly, Orange organizations are responsible for inventing many of the performance metrics, as well as incentive and bonus schemes we know today.

In stark contrast to Achievement-Organe, the more recent Pluralistic-Green paradigm is highly sensitive to people’s feelings. Fairness, equality, harmony, community, cooperation, and consensus are some of the values of people operating from a Green worldview. Where Orange glorifies the decisive leader, Green insists on leaders as being in service of others. The Green paradigm is uneasy with power and hierarchy and is often seen in non-profit organizations and communities. Green organizations take a multiple-stakeholder perspective and empower employees to make far-reaching decisions on their own, guided by a value-driven culture and an inspirational purpose. Where strategy and execution is king in Orange organizations, culture is the driving force in Green organizations.

The Evolutionary-Teal paradigm is based on an evolutionary worldview evolving toward more wholeness, complexity, and consciousness. Leaders of Teal organizations break with the Orange and Green metaphors of organizations as machines or families and talks about organizations as living organisms. According to Laloux, pioneering Teal organizations revel major breakthroughs in self-management, wholeness, and operating from an evolutionary purpose. Instead of trying to predict and control the future, members of Teal organizations see the organization itself as a living entity with its own direction and evolutionary purpose.

Teal Leadership

Every paradigm has its associated leadership style. Red organizations call for a mafia-boss, ruthless-type leader; Amber for a paternalistic leadership style; Orange for a profit-driven executioner; and Green for a purpose-driven facilitator.

In Teal organizations, the full responsibility for the organization is shared among the members and not with a single person at the top. All business information is available to everyone, and everyone has a duty to address any issue they see. Members trust each other until proven otherwise and must feel comfortable holding others accountable to their commitments. Teal organizations believe that everyone fundamentally has equal value and that the organization must be a safe enough environment to be authentic, emotionally and spiritually.

The characteristics of Teal organizations introduce a major paradox in the necessary leadership style. On one hand, the leader of a Teal organization has given up the right to overturn decisions and execute the traditional power associated with sitting on top of the pyramid. On the other hand, the leader at the top plays a critical role in creating the space for a Teal organization to develop, in a world where especially the Orange paradigm still dominates.

The behavior of a leader can shape an organization in profound ways. Teal leaders, therefore, need to model the behaviors associated with self-management, wholeness, and purpose they hope to see in the organization. Teal leaders must resist the urge, from others and within, to make decisions that are better suited for others to make. They must be authentic, trust the members of the organization, and not be afraid to show vulnerability when they don’t have all the answers. Last but not least, leaders can support a Teal culture by reminding themselves and others that their work is in service of a purpose that transcends them individually.

Make Sure the CEO and Board Believe in the Change

As discussed above, leadership plays a critical role in making the change to a Teal model. Laboux concludes that two factors are essential for a successful transformation:

  1. The CEO must drive the change by example and create the trust and space necessary for the rest of the organization to follow.
  2. The Board must believe in the change and support the CEO. Otherwise, the Board will likely replace the CEO on the first setback and replace the CEO with a more traditional (typical Orange) thinking manager.

The book is a highly recommended read for any leader looking to bring Teal practices to their organization.

And as always, please feel free to use the comments to join the conversation.

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