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

by Frederic Laloux

Their motivation is to serve their clients well and, in the face of Chinese competition,

to maintain and when possible increase the number of jobs the factory can provide.

To account managers, feeding their team with work is a motivation far stronger than any sales target from a head of sales could ever provide.

at FAVI, sales orders are always discussed in terms of employment, not in monetary terms; so there is no “we got a $1 million order,” but rather “we got an order for 10 people’s work.”

the regional coaches have great insight into what’s happening in the field; collectively, they could spot issues and opportunities and determine which actions to take and initiatives to launch. But that would exactly be the problem, in Buurtzorg’s perspective—people from up high believing they know what is needed down below.

with a pyramidal shape, people at the top of organizations will complain about meeting overload, while people below feel disempowered.

In the type of structure adopted by Buurtzorg, FAVI, and other self-managing organizations we will meet, the lines converge at the lowest level, within teams.

FAVI chose a more organic and elegant solution. At regular intervals, a group composed of one designated person from each team comes together for a few minutes; they quickly discuss which teams are over or understaffed; back in their teams, they ask for volunteers to switch teams for a shift or two. The person from the Audi team, for example, might ask who in the team is willing to spend the day with the Volvo team. Things happen organically on a voluntary basis; nobody is being allocated to a team by a higher authority.

At FAVI, there are no middle managers that fight for budgets, and Zobrist refused to play the role of the father who would decide how to divide up the candy among his children. Teams know that no haggling will take place, so they don’t throw in inflated numbers to start with; they make realistic requests based on realistic needs. In most years, when the budgets of the teams are added up, the resulting number is reasonable, and all plans get the green light, with neither discussion nor scrutiny. Teams are trusted to do the right thing; if one team were to get itself golden-plated machines, other teams would quickly notice, and peer-pressure would self-regulate the problem away. In those years where the combined projects exceed what would be reasonable, the CEO simply asks teams to sit together and to come back to him with a revised plan. Representatives from each team come together and put all the plans on a table. They look at what is most important and what might be deferred in everyone’s plans. In one or two meetings, the problem is always sorted out.

workers self-nominate to create a temporary project team.

FAVI’s idea scout.

“Go do it. I believe you have what it takes to be successful in that role. But it’s not my decision. You need to show the teams that your role is worthwhile to them.”

teams at AES were responsible for decisions relating to all aspects of day-to-day operations: budgets, workload, safety, schedules, maintenance, hiring and firing, working hours, training, evaluations, compensation, capital expenditures, purchasing, and quality control, as well as long-term strategy, charitable giving, and community relations.

millions of customers throughout the world were supplied with energy produced by self-governing teams responsible for such crucial matters as safety and maintenance.

The company came up with the “80-20 rule“: every person working at AES, from cleaning staff to engineer, was expected to spend on average 80 percent of their time on their primary role and make themselves available for the other 20 percent in one or more of the many task forces that existed around the company.

No classroom training could ever provide the amount of learning that was taking place day in and day out in the voluntary task forces.

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.

The traditional tasks of a manager—direction-setting, budgeting, analyzing, planning, organizing, measuring, controlling, recruiting, evaluating, and communicating—are now scattered among various members of a team.

Thinking in terms of granular roles instead of pre-defined jobs creates great fluidity and adaptability.

People can give up one role and take up another without needing to go through the cumbersome and often political processes of appointment, promotion, and salary negotiation.

There is a risk, as some teams have experienced, that hierarchical practices creep back in when too many management roles are delegated to a single team member.

At FAVI, a simple but powerful relief valve exists, should a team leader find the taste of power too sweet: workers can choose at any moment to join another team. Team leaders have no meaningful way of coercing people into desired behavior; they certainly don’t have the authority to fire people unilaterally. If they start to behave autocratically, people can simply walk away.

From the Evolutionary-Teal perspective, job titles are like honeypots to the ego: alluring and addictive, but ultimately unhealthy.

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

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.

in principle, any person in the organization can make any decision. But before doing so, that person must seek advice from all affected parties and people with expertise on the matter.

the agony of putting all decisions to consensus is avoided, and yet everybody with a stake has been given a voice; people have the freedom to seize opportunities and make decisions and yet must take into account other people’s voices.

colleagues know that forgetting to uphold the advice process is one of the few things that can get them fired

draws people whose advice is sought into the question at hand.

Second, asking for advice is an act of humility, which is one of the most important characteristics of a fun workplace.

making decisions is on-the-job education.

chances of reaching the best decision are greater than under conventional top-down approaches.

Whatever someone’s place in the organization, he or she could initiate any decision.

Consensus comes with another flaw. It dilutes responsibility. In many cases, nobody feels responsible for the final decision. The original proposer is often frustrated that the group watered down her idea beyond recognition; she might well be the last one to champion the decision made by the group. For that reason, many decisions never get implemented, or are done so only half-heartedly.

While consensus drains energy out of organizations, the advice process boosts motivation and initiative.

If you view people with mistrust (Theory X) and subject them to all sorts of controls, rules, and punishments, they will try to game the system, and you will feel your thinking is validated. Meet people with practices based on trust, and they will return your trust with responsible behavior.

The way information flows illustrates how assumptions (conscious or unconscious) shape organizational practices. In most workplaces, valuable information goes to important people first and then trickles down to the less important. Sensitive information is best kept within the confined circle of top management. If it must be released more widely, it needs to be filtered and presented carefully

The underlying assumption is that employees cannot be trusted; their reactions could be unpredictable and unproductive, and they might seek to extract advantages if they receive too much information. Because the practice is based on distrust, it in turn breeds distrust among people lower in the hierarchy: What are the bosses concealing now?

at Morning Star: individuals should neveruse force against other people and they should honor their commitments.

For each role, you specify what it does, what authority you believe you should have (act, recommend, decide, or a combination thereof), what indicators will help you understand if you are doing a good job, and what improvements you hope to make on those indicators.

Turning tomatoes into paste, in contrast, is one long continuous process. Trucks repeatedly dump in tomatoes on one side, and paste comes out in aseptic packaging on the other. In what is essentially a low-margin commodity business, the name of the game here is not flexibility but continuous improvement to increase efficiency by one or two more percentage points. In that context, it makes sense to define roles with great granularity and to track

performance indicators very closely.

In a continuous process like Morning Star’s, each person in the chain receives tomatoes or paste in some form from someone upstream and delivers them in another form to someone downstream. Therefore, colleagues at Morning Star chose to discuss the CLOUs, once written or updated, not in a team setting (which most self-managing organizations do), but in a series of one-on-...

What happens is that people, as they grow in experience, take on roles with larger responsibilities and offload simpler ones to new recruits or more junior colleagues. People don’t need approval from a boss to change roles, but consent from their peers.

The temptation to not be ourselves and look good in the eyes of a boss is much diminished, as it is hard to constantly look good to a dozen colleagues. We just give up even trying to play that game.

In Teal Organizations, people don’t compete for scarce promotions. You can broaden the scope of your work and increase your pay if your colleagues are ready to entrust you with new roles. They will grant you important roles if you’ve developed your skills and have shown yourself to be trustworthy and helpful.

HolacracyOne, a consulting and training firm dedicated to refining and spreading the practice of Holacracy in organizations.

separate role from soul, to break the fusion of identity between people and their job titles. In holacratic language, people don’t have a job, but fill a number of granular roles.

When someone senses that a new role must be created, or an existing role amended or discarded, he brings it up within his team56 in a governance meeting. Governance