Reinventing Organizations: A Guide to Creating Organizations Inspired by the Next Stage of Human Consciousness

by Frederic Laloux

Red Organizations are wolf packs. In Amber, the metaphor changes: a good organization should be run like an army. Within a rigid hierarchy, there must be a clear chain of command, formal processes, and clear-cut rules that stipulate who can do what. Foot soldiers at the bottom of the pyramid are expected to follow orders scrupulously, no questions asked, to ensure the battalion marches in good order.

In Orange Organizations, strategy and execution are king. In Green Organizations, the company culture is paramount.

Where Achievement-Orange views organizations as machines, the dominant metaphor of organizations in Pluralistic-Green is the family.

There is nothing inherently “better” about being at a higher level of development, just as an adolescent is not “better” than a toddler. However, the fact remains that an adolescent is able to do more, because he or she can think in more sophisticated ways than a toddler. Any level of development is okay; the question is whether that level of development is a good fit for the task at hand.

If evolution were music, stages of development would be musical notes, vibrating at certain frequencies. Human beings would be like strings, capable of playing many different notes. The range of notes they can play depends on the range of tensions they have learned to accommodate.

The shift to Evolutionary-Teal happens when we learn to disidentify from our own ego.

What replaces fear? A capacity to trust the abundance of life. All wisdom traditions posit the profound truth that there are two fundamental ways to live life: from fear and scarcity or from trust and abundance. In Evolutionary-Teal, we cross the chasm and learn to decrease our need to control people and events. We come to believe that even if something unexpected happens or if we make mistakes, things will turn out all right, and when they don’t, life will have given us an opportunity to learn and grow.

Clare Graves’ favorite phrase to describe someone operating from Teal was “a person who has ambition, but is not ambitious.”

Wisdom can be found in intuition, too. Intuition honors the complex, ambiguous, paradoxical, non-linear nature of reality; we unconsciously connect patterns in a way that our rational mind cannot.

Many people believe that there are answers to be found in yet deeper sources. Wisdom traditions and transpersonal psychology trust that if we don’t simply ask a question, but live a question, the universe in its abundance may give us clues to the answer in unexpected events and synchronicity or in words and images that arise in dreams and meditations. Non-ordinary states of consciousness—meditative states, contemplative states, visionary experiences, flow, peak experiences—are available at any stage of consciousness, but from Teal onward, people often take on regular practices to deepen their experience in these states and access the full spectrum of human experience.24

The founders of Teal Organizations use a different metaphor for the workplaces they aspire to create. With surprising frequency, they talk about their organization as a living organism or living system. Life, in all its evolutionary wisdom, manages ecosystems of unfathomable beauty, ever evolving toward more wholeness, complexity, and consciousness. Change in nature happens everywhere, all the time, in a self-organizing urge that comes from every cell and every organism, with no need for central command and control to give orders or pull the levers.

Nobody knows if projects are on time or on budget, because for 90 percent of the projects, no one cares to put a timeline on paper or to establish a budget.

Amber and Orange Organizations come with organization charts. Boxes on the charts come with titles and job descriptions, which in turn come with an implicit expectation: people must adapt to the box they have been recruited or promoted into. Teal Organizations reverse the premise: people are not made to fit pre-defined jobs; their job emerges from a multitude of roles and responsibilities they pick up based on their interests, talents, and the needs of the organization.

Job titles and descriptions hardly do justice to unique combinations of roles, and they are too static to account for the fluid nature of work in Teal Organizations.

From the Evolutionary-Teal perspective, job titles are like honeypots to the ego: alluring and addictive, but ultimately unhealthy. We can quickly get attached to our job title if it carries social prestige, and we can easily fall into the trap of believing we “are” our job identity. And in a hierarchical system, it’s all too natural to start considering that we are somehow above certain people and below others. Unsurprisingly, Teal Organizations mostly do without job titles. Again, we have to be careful: it does not mean that everyone is equal, that all jobs are the same. Some roles have a rather narrow scope (say, the role of operating a certain machine or cleaning the office), while other roles take a broader perspective (for instance, the role of designing a new product line). In all organizations researched for this book, there is one person recognized for taking the broadest perspective, and usually that person is called the CEO, at least by the outside world (even though she doesn’t hold the same prerogatives as a traditional CEO, a topic discussed in chapter 3.1). And there are certain sets of well-defined roles that people naturally give a name to—for example, the regional coaches at Buurtzorg or the team leaders at FAVI. But for the vast majority of employees, people don’t bother trying to find the right label that would capture all the different roles they hold at any point in time. Thinking in terms of job titles is so ingrained in our culture’s thinking, thoug...

In this research, I encountered an interesting phenomenon: in self-managing organizations, it seems that almost universally, people choose to leave before they are dismissed.

Leading scientists believe that the principal science of the next century will be the study of complex, autocatalytic, self-organizing, non-linear, and adaptive systems. This is usually referred to as “complexity” or “chaos theory” (the Teal equivalent to Orange’s Newtonian science). But even though we are only now starting to get our heads around it, self-management is not a startling new invention by any means. It is the way life has operated in the world for billions of years, bringing forth creatures and ecosystems so magnificent and complex we can hardly comprehend them. Self-organization is the life force of the world, thriving on the edge of chaos with just enough order to funnel its energy, but not so much as to slow down adaptation and learning. For a long time, we didn’t know better and thought we needed to interfere with life’s self-organizing urge and try to control one another. It seems we are ready now to move beyond rigid structures and let organizations truly come to life. And yet self-management is still such a new concept that many people frequently misunderstand what it is about and what it takes to make it work.

From an Evolutionary-Teal perspective, the right question is not: how can everyone have equal power? It is rather: how can everyone be powerful? Power is not viewed as a zero-sum game, where the power I have is necessarily power taken away from you.

A human … experiences himself, his thoughts and feelings, as something separated from the rest. This delusion is a kind of prison for us, restricting us to our personal desires and to affection for a few persons nearest us. Our task must be to free ourselves from this prison by widening our circles of compassion to embrace all living creatures and the whole of nature in its beauty. Albert Einstein

At Heiligenfeld, once a year colleagues in every team rate the quality of their interaction with other teams. The result is a company-wide “heat map” that reveals which teams should have a conversation to improve their collaboration.

Many wisdom traditions affirm that when we act from deep integrity and align with what we feel called to do, the universe conspires to support us.

In Teal Organizations, profits are a byproduct of a job well done. Philosopher Viktor Frankl perhaps captured it best: “Success, like happiness, cannot be pursued; it must ensue, and it only does so as the unintended side-effect of one’s personal dedication to a cause greater than oneself.”

In Evolutionary-Teal, an organization is viewed as a living system, an entity with its own energy, its own identity, its own creative potential and sense of direction. We don’t need to tell it what to do; we just need to listen, partner with it, join it in its dance, and discover where it will take us.

In Teal Organizations, there is no strategy process. No one at the top sets out a course for others to follow. None of the organizations I have researched had a strategy in the form of a document that charts out a course. Instead, people in these companies have a very clear, keen sense of the organization’s purpose and a broad sense of the direction the organization might be called to go. A more detailed map is not needed. It would limit possibilities to a narrow, pre-charted course.

Strategy happens organically, all the time, everywhere, as people toy with ideas and test them out in the field. The organization evolves, morphs, expands, or contracts, in response to a process of collective intelligence. Reality is the great referee, not the CEO, the board or a committee. What works gathers momentum and energy within the organization; other ideas fail to catch on and wither.

In comparison, Teal Organizations’ approach to marketing is almost simplistic. The organizations simply listen in to what feels like the right offering. There are no customer surveys and no focus groups. Essentially, marketing boils down to this statement: This is our offer. At this moment, we feel this is the best we can possibly do. We hope you will like it. In a strange paradox, Teal Organizations go about filling a need of the world not by tuning in to the noise of the world (the surveys, the focus groups, the customer segmentation), but by listening within. What product would we be really proud of? What product would fill a genuine need in the world? These are the kinds of questions people turn to in Teal Organizations to define new products. It’s a process guided by beauty and intuition more than analytics.

The paradigm of predict and control naturally prompts us to look for perfect answers. If the future can be predicted, then our job is to find the solutions that will reap the best results in the future we foresee. Predictions are valuable in a complicated world, but they lose all relevance in a complex world. Jean-François Zobrist at FAVI found insightful metaphors to explain the difference. An airplane like a Boeing 747 is a complicated system. There are millions of parts that need to work together seamlessly. But everything can be mapped out; if you change one part, you should be able to predict all the consequences. A bowl of spaghetti is a complex system. Even though it has just a few dozen “parts,” it is virtually impossible to predict what will happen when you pull at the end of a strand of spaghetti that sticks out of the bowl. Making predictions gives us a comforting sense of control. But the reality is that organizations and the world we live in have become complex systems. In such systems, it becomes meaningless to predict the future, and then analyze our way into the best decision. When we do, out of habit, we only waste energy and time producing an illusion of control and perfection. Teal Organizations make peace with a complex world in which perfection eludes us. They shoot explicitly not for the best possible decision, but for a workable solution that can be implemented quickly. Based on new information, the decision can be revisited and improved at any point.

Budgets are established only if some forecast is needed to inform an important decision. At FAVI, for instance, teams make rough monthly predictions for the year to come, to secure contracts for raw materials. Otherwise, many of these companies don’t create any budget at all.

In its management manifesto, FAVI captures the thinking about budgets in a provocative statement: “In the new way of thinking, we aim to make money without knowing how we do it, as opposed to the old way of losing money knowing exactly how we lose it.”

The organization is viewed as an energy field, emerging potential, a form of life that transcends its stakeholders, pursuing its own unique evolutionary purpose. In that paradigm, we don’t “run” the organization, not even if we are the founder or legal owner. Instead, we are stewards of the organization; we are the vehicle that listens in to the organization’s deep creative potential to help it do its work in the world.

The general rule seems to be that the level of consciousness of an organization cannot exceed the level of consciousness of its leader.

Everything seems to unfold so easily it verges on the magical.

A radical inner transformation and rise to a new level of consciousness might be the only real hope we have in the current global crisis brought on by the dominance of the Western mechanistic paradigm. Stanislav Grof

Middle and senior management Most senior and middle managers, as well as people in staff functions, will view the transition to self-management as a threat (at least at first). Don’t expect them to embrace self-management with hoorays. In the best of cases, they will lose only their hierarchical power. More likely, they will have to find themselves a new job within the organization or outside it, because their function will disappear altogether. FAVI, for instance, used to have up to five levels of hierarchy; today it operates with only the CEO “above” the self-managing teams. Unsurprisingly, people whose power and jobs are at stake (and for whom the new practices often make no sense) tend to oppose the changes passionately. Expect their resistance to be the hardest nut to crack in your organization’s transition.

How will we operate in the future? In all honesty, I don’t know. I’m convinced that you deserve for us to work together differently, but I don’t have an alternative model. I suggest that, together, we learn by doing, with good intentions, common sense, and in good faith.136

There is, of course, an irony in the CEO imposing self-management in a last act of top-down decision-making. But if we look carefully, we can see that Zobrist wielded his power with precision, limiting himself to the smallest possible decision.

How to deal with middle/senior managers and colleagues in staff functions is in all likelihood the most challenging issue you will face in a transformation to Teal.

What can explain the spectacular outcomes of the pioneer organizations researched for this book? There are different ways to approach the question. We can of course point to the three breakthroughs of Teal Organizations: 1) Power is multiplied when everybody gets to be powerful, rather than just a few at the top (self-management); 2) Power is used with more wisdom, as people bring in more of themselves to work (wholeness); and 3) Somehow things just fall into place when people align their power and wisdom with the life force of the organization (evolutionary purpose).

There is a simpler way to organize human endeavor. It requires a new way of being in the world. It requires being in the world without fear. Being in the world with play and creativity. Seeking after what’s possible. Being willing to learn and be surprised. The simpler way to organize human endeavor requires a belief that the world is inherently orderly. The world seeks organization. It does not need us humans to organize it. This simpler way summons forth what is best about us. It asks us to understand human nature differently, more optimistically. It identifies us as creative. It acknowledges that we seek after meaning. It asks us to be less serious, yet more purposeful, about our work and our lives. It does not separate play from the nature of being. … The world we had been taught to see was alien to our humanness. We were taught to see the world as a great machine. But then we could find nothing human in it. Our thinking grew even stranger—we turned this world-image back on ourselves and believed that we too were machines. Because we could not find ourselves in the machine world we had created in thought, we experienced the world as foreign and fearsome. … Fear led to control. We wanted to harness and control everything. We tried, but it did not stop the fear. Mistakes threatened us; failed plans ruined us; relentless mechanistic forces demanded absolute submission. There was little room for human concerns. But the world is not a machine. It is alive, filled with life ...

These are extraordinary times to be alive. Sometimes I can’t wait to see what the future will bring. In the words of Wheatley and Kellner-Rogers, I can only wonder: If we can be in the world in the fullness of our humanity, what are we capable of?

People who transition to Evolutionary-Teal become aware that ego is merely one part of themselves (some traditions refer to it therefore as the “small self”). If the ego is just an object in their awareness, who is being aware? A deeper part of themselves—the soul, or the “big self.” This realization prompts people at this stage to seek wholeness, to integrate all parts of the self, big and small. Sometimes, through meditative practices, or sheer luck, they have a peak experience beyond even the big self; they merge and become one with the absolute, with nature, with God. Such peak experiences can happen at any stage. People who transition to transcendent consciousness start to actively seek such experiences. They become keenly aware that not only is the ego a construct, but so is the soul, the big self. Ultimately it is nothing more than nothingness, the ultimate contraction of focus, the ultimate illusion of separateness. Personal development at this stage blends with a spiritual quest—often through a disciplined daily practice of meditation, yoga, altered breathing techniques, or other methods that help to access non-ordinary states of consciousness—to experience, beyond separateness, beyond time and space, the oneness with all of manifestation.