Once in a while, a book comes along that validates everything you’ve come to believe about a specific topic or trend. Frederic Laloux’s new book, “Reinventing Organizations” did that for me in a way nothing else has over the past seven years I’ve been focused on applying the principles of the second generation web to business.
Laloux makes a simple, astute observation:
“Perhaps we need to access a new stage of consciousness, a new worldview, to reinvent human organizations.”
Laloux is a former McKinsey consultant and executive coach who invested a few years of research into uncovering organizations that were operating differently with more progressive values not exclusively aligned to profit-making. What he found was stunning: companies who had no idea of each other’s existence were running their organizations in similar ways.
The cornerstone of Laloux’s analysis rests on categorizing companies with a color scheme that reflects the evolution of humanity and the transformations required to get to each next stage.
Red companies are driven by fear and power is concentrated at the top. Amber organizations are hierarchical and process-driven. Orange companies are competitive and retain much of the fear and hierarchical command and control processes, while providing more leeway about how business gets done. Green organizations are still hierarchical, but focus on culture and empowerment. Teal organizations are purpose-led with an emphasis on trust over fear. Hierarchy yields to network behaviors in decision-making and serving customers.
The book tracks this evolution meticulously drawing from a variety of sources including psychologists, historians, anthropologists, philosophers, and even neuroscientists. Combining this human journey with what we know today about modern organizational development principles, the book draws patterns that make sense and sync to what we know intuitively about human behavior.
The optimism in the book surrounds the discussions of the dozen or so companies Laloux researched operating as Green and Teal organizations. But, the lesson that stood out for me (and something we’ve been focused on at Change Agents Worldwide) is the predominant form of large company today, which Laloux describes as “Orange,” is slowly killing us. Nearly every study published on workforce satisfaction points to record low numbers in enjoyment, fulfillment, engagement, and security. Of course, the same studies report record high numbers in burn-out, apathy, mistrust, and stress. Orange companies hell-bent on short-term results are unleashing a pandemic, a soul-crushing plague on the collective spirit of the working world. The phenomenon is not limited to a certain level of the company. From the factory floor to the corner office, work is imprisoning us, or worse – callously shedding us, so much so that the new normal for today’s employee includes a series of freelance assignments, if not a lifelong new career of independent consulting. This choice is becoming more and more attractive as an alternative to the toxicity poisoning us at our day job.
The Laloux book gives us hope, a path forward. The transformational opportunity begins with new leadership. It’s a new view at how founders and CEOs need to behave to build the companies of the future that inspire workforces to create organizations that make a difference. Even Laloux himself admits that this mind shift is tough within the existing paradigm. But, in an interview, he admitted to me that executives from orange organizations know that making this shift is inevitable. It’s just a matter of time.
As an aside, on a flight back from New York last week, I read Robert Cringely’s “The Demise and Fall of IBM.” It came as no surprise that each pathogen carefully documented in Reinventing Organizations played out vividly in the pages of Cringely’s book.
Read Laloux’s book. Here’s to hoping it makes a change in you too.
p.s. If you want to know how to become a Teal company, we are ready to help you.