“If employees need to be empowered, it is because the system’s very design concentrates power at the top”Reinventing Organizations by Frederic Laloux
In years to come will we look back on how we run organisations and wonder why we did things that way? Will we look at the ‘command and control’ or ‘top down’ style of management and wonder how we ever worked like that? Why did we decide that was how to get the best from people and help them perform well in their roles?
Traditional organisations have been run with a leader at the top, who makes decisions, and a management team who make decisions for their teams, and so on. People in those teams must go to leaders, or sometimes to several leaders to gain approval for things they want to do. They must report on what they are doing, how they are doing it, when they are doing it, and follow the rules and regulations of the organisation. This is the style of so many types of organisations, and has been since workplaces started and evolved.
‘Teal’ organisations use a different way of thinking. They treat people as equals. Everyone has the autonomy to decide things for themselves. People are responsible for how they do things and for getting things done. They know what problems need to be resolved and work on how to do that with their colleagues. If there are those in positions of more seniority, they might be the someone to talk through a problem with, to find a solution together. Teal organisations work on enabling people to bring their whole selves to work, to be who they are, and know that they are responsible for their own destiny.
In a teal organisation, gone are the strict management procedures. Employees often decide things like their salary levels themselves. They have the autonomy to make decisions for themselves, without hierarchy, protocols or extensive sign-off processes. People decide for themselves what they are working on, and how they are going to do it, and everyone decides together on the things that need to be done by the organisation and the reasons why they need to be done.
This style of running an organisation is often called ‘teal’ as that is how Frederic Laloux describes them in his book ‘Reinventing Organizations’. In his book, he looks at other types of organisations using different colours (amber, red and green), where they use more traditional styles of leadership and decision-making. In those organisations decisions are made based on hierarchy, meritocracy or consensus.
How does it work?
Teal organisations are often run as a ‘holocracy’ and you might hear them use that term. What they mean is that management is de-centralised. Decision-making is not hierarchical, dictated to people from above, and decisions are transparent to everyone. These organisations have a strong purpose which everyone understands and believes in. This sense of purpose enables people to work in this way as they decide what they should do based on the purpose of the organisation and what is best for the organisation and for everyone there.
Things like job descriptions, performance management, and sign-off processes are not needed in the traditional way. People can decide things for themselves and deliver on the things they are working on. These types of organisations are likely to give people autonomy to decide their own salary increases, working hours, working days and so on. There is no leader or several leaders telling people what they have to do and monitoring them.
What are the benefits?
So why would anyone set up their organisation to run in this way? What are the benefits of this instead of the traditional style of management? This can be broken down into three main benefits:
- People first – what motivates people in these organisations is that they are passionate about, and believe in the overall purpose of the organisation. People are at the heart of it, and this is about what helps people feel motivated and committed as everyone believes in the purpose
- Shared success – in this type of organisation individuals do not compete with each other to gain more authority over other people. Being successful in a task or project helps everyone, as this is progress for the company as a whole. This means that people work together and help each other to succeed for the best interests of the organisation and not for their individual success or ownership.
- Always learning – for teal organisations learning is continuous. People are always working on better ways to do things. There are no fears about making mistakes, and people taking their own initiative to try new ways to do things is how people work and improve things.
This way of working appeals to people who want to take responsibility for what they do, they want to learn and they want to contribute to a purpose. This is not a style of working for those who want to micro-manage people or to have power and control over others.
How can you colour your way to teal?
Changing how an organisation is run to this style of leadership needs thought and consideration. Firstly, everyone needs to want to do this and believe in this style. At all levels in the organisation, there has to be the desire to do this and people need to understand it, and what it means. If not, those who want to make it work will conflict with those who don’t and there will be friction.
Then if you all decide this is how you want to progress, you will need to engage everyone in this, so that everyone thinks about, and works on how to make it work. Next you need to work together on your purpose. You all need to create the overall sense of purpose that everyone believes in and works for. People will need to understand why this is being proposed and how that fits with the purpose and how they can contribute to this.
As well as the purpose, you will all need to agree together what that purpose needs to deliver. Things like how much money needs to be made, who your products, service or other deliverables are aimed at, what types of work people want to do, and how people will work together. Teal organisations often operate using methods like ‘circles’ for different subjects. So there might be a circle of people who work on looking for new customers, a circle of people who look after the facilities, a circle who work on the finances and so on.
Be prepared that for some people, this will make them want to leave and seek employment elsewhere. For leaders, this is about relinquishing control, and many will be uncomfortable with that. They will feel uncomfortable with not having control over decisions, and some employees may feel that they cannot work in this way, without someone making decisions for them.
There will be challenges along the way, for those who do want to make this work. Those who are used to a Manager being in control, may feel lonely or lost and require support. It is likely to take some time to work out how to deliver results well across the whole organisation. Those who have been leaders may need help with how to help people with making decisions. Coaching is a good way to help people with this transition and for ongoing support for people, so they can talk things through.
And it is important to remember that there are some hierarchies in teal organisations.
“Hierarchy isn’t abandoned at Teal; what is dismantled is the static form of hierarchy that is in the buttress of the org chart. The goal of self-management is not to make everyone equal, to have everyone having the same say on all the questions. It is really the opposite. It’s to have natural hierarchies, and to have lots of natural hierarchies.”Reinventing Organizations, Frederic Laloux
If this has got you thinking and starting to imagine how you could work like this, email firstname.lastname@example.org for a chat!