Andy Kelk

Digital Technology Leader


Book Review: Reinventing Organizations

I’ve recently finished reading “Reinventing Organizations” by Frederic Laloux. I was inspired to read it after attending a talk by Michael Spayd and Michael Hamman on creating an agile enterprise. They used Laloux’s work as a foundation for their talk.

I’d have to say this is one of my favourite books that I’ve read this year. There’s so many aspects of the book that resonated with me and I thoroughly enjoyed reading it. That’s pretty evident if you’ve been following my Twitter feed where I shared many little gems from the book as I was reading.

The book is divided into three parts:

Part 1

Part 1 tells a historical story of the growth of different forms of organisation – from the earliest Infrared (reactive) paradigm through to current day Orange (Achievement) and Green (Pluralistic) thinking.

So what are the main developmental stages we see in operation today?

Development Stage Examples Key breakthroughs Guiding metaphor
Green
Within the classic pyramid structure, focus on culture and empowerment to achieve extraordinary employee motivation
Culture driven organisations (e.g. Southwest Airlines, Ben & Jerry’s) Empowerment; values-driven culture; stakeholder model Family
Orange
Goal is to beat competition; achieve profit and growth. Innovation is key to staying ahead. Management by objectives (command and control on what; freedom on the how)
Multinational companies Innovation, accountability, meritocracy Machine
Amber
Highly formal roles within a hierarchical pyramid. Top-down command and control (what and how). Stability valued above all through rigorous processes. Future is repetition of the past.
Catholic church, military, most government agencies Formal roles (stable, scalable hierarchies), Processes Army
Red
Constant exercise of power by chief to keep troops in line. Fear is the glue of the organization. Highly reactive, short-term focus. Thrives in chaotic environments
Mafia, street gangs, tribal militias Division of labour, command authority Wolf pack

The majority of today’s large companies operate at either Amber or Orange and that shows in the way they are structured and how people behave. There are some organisations that have adopted a Green worldview – particularly in the not for profit sector. But Laloux teases us with the promise of the next stage – Teal and what that could offer.

I found this section to be a fascinating introduction to the topic – it’s not too long and many of the characteristics of the different stages (particularly Amber and Orange) rang true both from my experience and from depictions of organisations in popular culture. I also appreciated the discussion of different models around:

Every model might look at one side of the mountain (one looks at needs, another at cognition, for instance), but it’s the same mountain. They may give somewhat different names to the stages or sometimes subdivide or regroup them differently. But the underlying phenomenon is the same, just like Fahrenheit and Celsius recognize—with different labels—that there is a point at which water freezes and another where it boils.

Part 2

Part 2 introduces the next stage of development – Teal and what it means for an organisation to be grounded in Teal thinking. There are plenty of case studies of successful organisations operating from a Teal perspective with details about how they run. What was most interesting to me was that I hadn’t heard of many of the organisations covered in this section yet they were demonstrably very successful businesses. Probably the cornerstone of the book is Buurtzorg – a neighbourhood nursing organisation in the Netherlands that has redefined the world of work for the nurses that work there; however it’s not just in the caring professions that this works – I loved reading about FAVI which is a metal foundry in northern France.

Other examples such as Morning Star have been covered in depth previously (First let’s fire all the managers). The other example that’s becoming well known is Holacracy – mostly because of Zappos although they are but a footnote in this book (most of the research was done well in advance of much of the recent media coverage of the Zappos story).

This part is really where the most value of the book is – plenty of detailed discussions of how different, unrelated organisations operate and weaving together their guiding principles into what is a definition of a Teal organisation. Laloux identifies three core elements:

  • self management
  • wholeness
  • listening to the organisation’s evolutionary purpose

Self-management gets the most airtime – mostly because it’s such a radical departure from the norm that many people struggle to see how it could possibly work. The most important point made (in my opinion) is that self-management is not about management by consensus (which doesn’t work).

Wholeness is an intriguing one as it demands that we drop our “professional” masks and make bring our whole selves to work. This is a very appealing notion to me, however some of the practices explored feel quite alien;  that said, I know that many people find them useful and valuable.

The evolutionary purpose is, in my mind, the most important member of the trio; having organisations which are not about growth or traditional value creation. They don’t sideline the need for income and growth, but those things are in service of the purpose rather than being the purpose themselves. For instance, FAVI, a manufacturing organisation has as its purpose to create meaningful employment for people in that area of France. If you’ve read Dan Pink’s Drive you’ll understand the importance of purpose to motivation.

Part 3

Part 3 covers the path to Teal for new and existing organisations. In some ways, this part of the book is both inspiring and depressing. Laloux is quite clear that, if you’re not the top leader of the organisation, you have no chance of transforming an existing organisation:

Can a middle manager put Teal practices in place for the department he is responsible for? When I am asked this question, as much as I would like to believe the opposite, I tell people not to waste their energy trying. Experience shows that efforts to bring Teal practices into subsets of organizations bear fruit, at best, only for a short while. If the CEO and the top leadership see the world through Amber or Orange lenses (Green’s tolerance allows for more hope), they will consider the Teal experiment frivolous, if not outright dangerous.

However, the inspiring part is that these organisations exist and that new organisations can be shaped to operate from a Teal perspective. So if you have the passion and the drive to do so, there is a precedent for creating new organisations that work in this way.

Conclusion

Overall, this is a book that I’ll recommend to people interested in how organisations work and how they could work differently from the majority of today’s workplaces. It’s also one I’ll certainly read again myself.


One thought on “Book Review: Reinventing Organizations

  1. Hi Andy,

    I see we’ve both been impressed by Frederic Laloux’s inspiring book of case studies of ‘Next Stage’ organisations.

    Indeed I was so impressed that I’ve helped put together a website about it, that you might enjoy: http://bit.ly/EnliveningEdge

    Here’s a long piece where Frederic Laloux himself explains what led him to write the book: http://www.enliveningedge.org/features/planting-the-seeds-of-new-possibilities-the-journey-that-led-me-to-reinventing-organizations/

    If you’ve got any news that we ought to be including, do let me know 🙂

    Matthew


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