Radical New Organizational Models
The way in which organizations are designed is fundamental to their success and their employees’ well-being. Many tech and internet firms have created flat hierarchies, with cultures allowing them to be adaptive towards market challenges. Indeed, highly flexible companies such as Apple and other internet tycoons are even able to shape market behavior. Nonetheless, there are always one or a few people at the top of these companies who direct the rest of the employees. There is no question that these people are geniuses, with a flexible mindset and an agile and disruptive attitude, but what about all the other companies in the world craving for innovation, as well as the millions of employees still threatened by stress and meaninglessness although working in organizations with so-called flat hierarchies?
How can companies be organized if their leaders do not have the necessary creative potential and thus are obliged to search for ideas among their colleagues?
Furthermore, how can companies become soulful workplaces? How can companies help introverts, creative minds and people lacking thirst for power – namely the people urgently needed on the road to innovation – to unleash their full creative potential?
I am intrigued by the way in which increasingly more companies take their corporate social responsibility seriously by creating dynamic organizational designs.
Frederic Laloux describes a number of successful organizations “inspired by the next stage of human consciousness” that have prompted a radical shift towards evolutionary structures.
A look at the historical evolution of organizational models (Laloux refers to the original theory of development stages of humanity, “spiral dynamics” by Clare W. Graves, which also was adopted by Ken Wilber in his “integral theory”) may not be sufficiently scientific, yet it remains a pragmatic approach to demonstrate the cultural paradigms and the way in which the “workforce” has been perceived from early industrialization (red) to today’s era of post-heroic consciousness (teal).
While “Orange” (most of today’s large organizations) with competition and profit orientation still reflect “organizations as machines”, the “Green” model focuses on culture and leadership yet still entails the problematic static and hierarchical structures with their power struggles and hidden agendas.
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The current stage of human consciousness is represented by “teal”, with an ethic of mutual trust, mindfulness and integrity.
Teal organizations are perceived as living systems designed for high complexity environments, with a soul, an own identity and an evolutionary purpose. “Teal” represents organizational designs that create a space where people can be authentic and where respect and trust are routine.
The organizational design of “teal” is based upon the idea of self-organized systems - Self organization - or self-management - refers to the way in which evolutionary systems organize themselves. I prefer the term “self-organization”, while others use “self-management”. Far away from the “predict and control” paradigm of management hierarchies, teal organizations create a culture around a purpose, a living organism with an energy of its own, where “innovations can permute into the system” (Laloux, 2015)
With a few examples - including the Dutch healthcare organization Buurtzorg - Laloux describes how self-organized companies allow workers to encounter authenticity, community and purpose, thus leading to increased innovation, well-being and productivity.
Laloux goes as far as to predict that a new organizational era is emerging. Indeed, watching discussions in forums on LinkedIn or twitter, I tend to believe that “teal” as a synonym for “self-organization” will soon become mainstream.
“Teal” is the organizational design framework that enables innovation and people’s well-being. Whether through holacracy or other models, they all share three basic elements:
- wholeness; and
A detailed view of self-organization will be provided in the chapter about holacracy. Self-organization guarantees that business-related information is open to all and can float seamlessly across the organization. “Teal organizations have found the key to operate effectively, even at large scale, with a system based on peer relationships, without the need for either hierarchy or consensus.”
Indeed, self-organization is based on rules. One misconception is that rules lead to bureaucracy, whereas the fact is that if organizations want to become highly flexible and agile, they need to implement a set of clear boundaries and rules. Clear rules regulating accountabilities, processes and work give much more freedom to the entire organization.(Robertson, 2015)
Freedom and accountability are two sides of the same coin: self-organization provides the basis for seamless information streams by giving people as much autonomy as possible within defined roles, as well as holding them accountable for their work output. There is transparency about what is done, when and by whom. Furthermore, self-organization creates cultures of responsibilities and responsiveness, where people can develop their own purpose and bring “all who we are” (Laloux, 2014) to work.
The way in which organizations are designed is shaping organizational culture: self-organization favors people’s autonomy and well-being, thus fueling creativity and productivity.
Purpose answers the “why” of organizations and individuals (Sinek, 2009). There is a relationship between “what we are here to do”, “how we know what we are doing” and “how we do it”( Caulkin, 2016). In an instable environment, purpose shapes cultures and holds the organization together.
Employees develop a sense to observe how their own purpose resonates with the collective. Some even say that in the long run there are no trade-offs between purpose and profits.(Laloux, 2014) Studies demonstrate at least that purpose-oriented employees are more successful than others, (Imperative, 2015) as they experience more meaning and fulfillment at work and have stronger relationships. Moreover, purpose-driven organizations tend to be more focused on customer needs.
“… developing purpose-oriented workers is only part of the equation. Building organizations that empower people to embrace purpose orientations drives organizational success, engages communities and boosts the economy (Imperative, 2015)
“Organizations have always been places that encourage people to show up with a narrow “professional” self and to show a masculine resolve, to display determination and strength, and to hide doubts and vulnerability. Rationality rules ... while the emotional, intuitive, and spiritual parts of ourselves often feel … out of place…” (Laloux, 2014)
Teal organizations are human workplaces where people can bring “all of who they are to work”, whether the emotional, spiritual or even their “darker” sides.
“So far so good, but we’d be naive to think that ‘teal’ wholeness can be achieved by simply introducing a selection of practices such as moments of silence at meetings, storytelling, or bringing your dog to work. …While these practices are definite enablers for wholeness, there remains many questions such as:
- How do we understand what wholeness means not just for ourselves, but also for others?
- How do we know if our sense of wholeness is shared?
- How do we select and evaluate our ‘wholeness’ practices?
- How do we find a common language and common points of reference to discuss such a deeply held personal experience?
- How do we enable groups and individuals to work through this?” (McKeown, 2015)
“Teal” organizations are trying to offer a culture of trust and collaboration that leads to an effective level of connection among people.
Most famous Teal: Holacracy
“The … organizing principle of complex adaptive systems is that simple rules guide complex behavior. This notion is completely counterintuitive to conventional wisdom. We usually think that complex structures will work only if we have detailed blueprints or a comprehensive set of rules and regulations. While this is often true for mechanical tasks, it is not the way biology works. In the organic world, the secret to effective execution of complex tasks is that order emerges from the collaborative application of a few simple rules rather than by compliance with a complex set of controls.” (Collins, 2015)
Agility was first adapted by software departments, applying iterations of production cycles run by self-organized teams to come closer to the users’ needs among other things. As a new organizational framework, holacracy made use of the software industry’s experience and applied the idea and rules of self-organization to the rest of the organization. Holacracy - often mistaken as a “non-hierarchical” and “rigid” model - can be described as an evolutionary organizational framework, organic system or meta-framework. Parallels can be found in human-centered design and ideation processes.
“…designed by an evolutionary process”
“… allowing organizations to express a higher purpose”
“… defining hierarchies by the prioritization of work”
“… crushing shadow power struggles”
“… changing the way power works and decisions are made”………
”Protecting the organizational design from human ego without neglecting the ego”.
Holacracy has been implemented by companies including Zappos, David Allen Company, Springest, Blink labs, Office of the CIO of Washington State and many more. A quick run through its principles follows: (Robertson, 2015)
Evolutionary Organizational Structure: (“Build What’s Strong”):
The underlying “operating system” of the organization is highly flexible, with work being processed according to “what needs to get done” (Allen, 2002), based upon a written constitution containing the organization’s purpose. Roles (and not positions) are grouped into circles. Each role and circle maintains structural autonomy with clear accountabilities and domains of work. This allows collective wisdom to spread and be adapted quickly, whereby change is absorbed efficiently. The system is frequently updated via tensions (see above) in rapid iterations rather than the long and painful re-organizations known within traditional companies.
Autonomy: Roles Defined Around the Work:
Autonomy is often misunderstood as “do what you like”. Holacracy equals autonomy with clear roles and accountabilities. Everyone can have different roles, each with explicit authorities and accountabilities, which give more flexibility than static job descriptions. One person can hold the roles “accountant”, “internal coach” and “sales support” in three different circles. This would be rather unrealistic in a management hierarchy. Interestingly, it is the roles that obtain authority, as opposed to people or positions.
Efficient Meeting Formats and Unique Decision-making Process:
People are expected to process tensions (namely something that anyone can sense must be modified to fulfill their role or circle’s purpose) in a structured and disciplined way. Tensions create proposals, which are processed through a highly structured decision-making process based upon consent rather than consensus. While focusing on consensus often leads to energy-losing, painful meetings, consent-based decisions are made after each raised objection is tested against the role or the organization’s purpose.
Holacracy is enabled by a system of rules that allows order to show up when needed, as a system of rules to achieve order without bosses
There are a few reasons why company leaders are afraid of holacracy:
Willingness to Change Old Habits:
Starting holacracy requires unlearning many habits that worked well in traditional companies. This may be one of the reasons why it is so controversially discussed in the media and naturally rejected by those who have gained authority through the exact habits that holacracy tells them to unlearn. All starting with the person at the top stepping back from his/her privileges to give room for distributed authority, where every single employee is bound by the same rules and nobody is above the law.
The Image of Holacracy:
The perception of holacracy is still the “organizational design for low paying startups”. Furthermore, the trouble caused to 20% of the workforce at Zappos - the most famous adopting company to date - during the implementation of holacracy created a quite negative media hype, which did no good to the basic concept of holacracy.
There is no question that top managers and representatives of traditional businesses are still reluctant to consider holacracy as an alternative to traditional management hierarchies.
The ideas connected with holacracy are nonetheless much too pertinent as to easily throw away the concept of an operating system based upon which any type of business can run. My experience with holacracy includes observations featuring effective meetings, a chance for introverts to have a word (I like this one!), a very short time to market for new ideas and a high level of engagement and motivation among employees, to name just a few.
More experience with more companies adopting holacracy will surely shape future discussions of organizational design.