Reinventing Organizations Book Report
Reinventing Organizations by Frederic Laloux is a book about how organizations and management have evolved since the beginning of time and what is in store for the future. Laloux postulates that, since 150,000 B.C., human organizational evolution has created 7 different types of organizations, each one more complex than the last. The seven types of organizations, color coded for easier understanding, are:
1. 150,000 B.C. – 50,000 B.C. Infra-red – Reactive (little or no understanding of the world)
2. 15,000 – 10,000 B.C. Magic – Magenta (sees the mysteries of the world through Magic and Spiritualism)
3. 10,000 B.C. – Impulsive – Red “sees the world through a crude lens of power. Power is exercised constantly by ‘Chiefs’ to keep foot soldiers in line. Fear and unpredictability hold the organization together. Highly reactive with a short-term focus, well-suited to thrive in chaotic environments. Wolf packs are a good metaphor for Red organizations.” ex: street gangs and mafias, ancient tribes.
4. 4,000 B.C. – Conformist Amber (organizations are akin to armies: rule abiding bureaucratic institutions) “The Amber stage of consciousness enabled humankind to develop organizations that could operate on an unprecedented scale. This led to the formation of bureaucratic institutions, and nation states, many of which have survived for centuries. Amber organizations strive for stability and are characterized by clear roles and ranks within a hierarchical structure. Leadership is exercised through command and control and compliance is expected throughout the organization.”. ex: armies, catholic church, public schools, government institutions.
Breakthroughs of Amber
1. Long Term Perspective (stable processes)
2. Size and Stability (formal hierarchies)
5. 1750s A.D. – Achievement Orange (Organizations are akin to machines: large corporate organizations, meritocracy, shareholder focused) “Orange organizations represent the advance of the scientific and industrial revolutions. The world is seen as a complex machine whose inner workings and natural laws can be investigated and understood. This view has brought unprecedented levels of prosperity and life expectancy. Current management thinking, which is focused on competition, innovation and performance. shape how Orange organizations operate.” ex: modern-day corporations, multi-national corporations.
Breakthroughs of Orange
1. Innovation
2. Accountability
3. Meritocracy
6. 1950s A.D. – Pluralistic Green (Organizations are families, with extreme egalitarianism, striving for harmony, tolerance, and equality) “Green organizations reflect the Green stage of consciousness, which strives for harmony, tolerance and equality. While retaining a pyramidal structure, Green organizations focus on empowerment to lift motivation. They go beyond the shareholder focus of Orange to embrace all stakeholders. Family is the dominant metaphor.” ex: hippy commune
Breakthroughs of Green
1. Empowerment
2. Values-driven culture and inspirational purpose
3. Multiple stakeholder perspective
7. Now Evolutionary Teal “Refers to the next stage in the evolution of human consciousness. Teal organizations are characterized by self-organization and self-management. The hierarchical "predict and control" pyramid is replaced with a decentralized structure consisting of small teams that take responsibility for their own governance. Assigned positions and job descriptions are replaced with a multiplicity of roles, often self-selected and fluid. People’s actions are guided by ‘listening’ to the organization’s purpose. Structure in Teal is characterized by rapid change and adaptation.”
Breakthroughs of Teal
1. Self-management
2. Wholeness - invite us to reclaim our inner wholeness and bring all of who we are to work.
3. Evolutionary Purpose - members of the organization are invited to listen in and understand what the organization wants to become, what purpose it wants to serve.
Although these systems above evolved over time, Laloux states that they RED, AMBER, ORANGE, GREEN, and now TEAL organizations all exist throughout society, represented in different institutions. Furthermore, some organizations exhibit combinations of the different types, although all organizations have a dominant type.
Research for the book was done by extensively examining 12 different existent teal organizations that organically emerged and predate the book. The 12 organizations range from car parts factory in France, a leading pasta sauce plant in California, a Swedish State funded at-home nationwide nursing company, a software developer, and a multinational power generation company with over 40,000 employees. From the various examples, Laloux shows how this new teal organizational paradigm allowed the companies to achieve tremendous and quick success in their respective domains, which he uses to advocate the philosophy.
The tone of the book is one of optimistic philosophizing, in which all the claims made are, according to the forward, “solidly grounded in evolutionary and developmental theory.” I personally found references to scientific studies somewhat lacking, but the book addresses the issue by stating that new paradigm is cutting-edge. Most of the chapters of the book are so optimistic and so often fail to acknowledge counter arguments, that I began to draw many of my own. Of the many questions, two major ones were thankfully addressed. The first was: Is teal expected to ultimately replace most other forms of management, to which the text answered: “No, many forms of management exist and will continue to exist in society at the same time.” My second question was: “would the system of trust and a teal worker’s freedom to spend a company’s money without prior approval of any managers break down either by dishonesty or in times of crisis?” The text’s answer to the first part was: “the Teal system only works if the wages provided meet the basic cost of living needs for all of their employees,” (which I took to infer that teal organization isn’t universal applicable, for example it wouldn’t work at a low paying place like McDonalds). In questioning the efficacy of teal in times of crisis, chapter 2.3 (processes) addresses it, but barely so. The question of how employees, who can hire and fire themselves, may behave when their company is on the verge of bankruptcy is acknowledged as an untested scenario, in the text.
The format of the book itself is broken down into three major sections: Part one is an historical and developmental perspective of organizations; part two defines: the structures, practices, and cultures of Teal Organizations; and part 3 is about the Emergence of teal organizations: necessary conditions, how to start a teal organization, transform a current one, and implications of a teal society.
Overall, the book does provide several insights that I believe truly are revolutionary. First, the system of labeling the different organizational structures in history into memorable color coding, gives us a vocabulary to discuss and a mental way to compartmentalize common existent organizational systems around the world. Secondly, the 12 teal organizations, which are discussed at length, are remarkable in the fact that they can not only function properly, but also thrive with their bottom up management with lack of traditional hierarchies.
In review, the book was chock full of insightful statements about the issues inherent in modern success-oriented corporations of today, provided an eye-opening perspective on a new way to see decentralized, self-managed business models were managers don’t even exist. I would recommend this text for anyone who may be interested in either partially changing their business or overhauling it with the revolutionary teal model, which may improve performance and employee satisfaction. Although the teal isn’t for every business or for everyone’s taste, the depth of insight gained from this book makes it worth the read.
Useful chapters to take a quick look at are: 1.2, 1.3, 2.2, 2.3, 3.2, and 3.3
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Top reviews from other countries
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An inspiring leading-edge view, which deserves time and consideration
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