In this post, we will discover what a Teal organization is. Learn about the different Teal principles and find out, if this revolutionary approach to management might be just the thing your company needs.
If you’ve worked at more than one company, you’ll know from experience that management styles and practices vary greatly from one organization to the next. Some companies enforce rigid structures and hierarchies, while others take a more flexible, adaptable approach.
In Teal organizations, self-managing teams prevail over traditional hierarchical structures. But what exactly does that mean, and is it an organizational style that your company should be striving for?
What is a Teal organization?
The concept of Teal organizations was first introduced by Frédéric Laloux, an INSEAD MBA graduate and expert coach for corporate leaders.
In his 2014 book Reinventing Organizations, Laloux explores how, throughout history, humanity has progressively evolved through different stages of consciousness. With each shift to a new stage of human consciousness, a new organizational model has been born — with each new model “radically more productive” than the last.
Teal is the latest and most revolutionary approach, comprising the fifth and final stage in what’s known as the Laloux Culture Model.
The Laloux Culture Model
The Laloux Culture Model is a five-color model where each color represents a different stage in human and organizational evolution. It draws from the color-based model of human consciousness created by philosopher Ken Wilber.
Here’s the Laloux Culture Model in a nutshell:
Often likened to wolfpacks, Red organizations are characterized by top-down control and decision-making. Just one or two individuals hold a position of power, and authority and conformity are maintained through fear.
Example: A criminal gang.
In Amber organizations, strict hierarchies and clearly defined roles prevail. There is typically a common belief or view held by the group, with self-discipline, shame, and guilt used to ensure adherence and compliance. Amber organizations thrive on stability and predictability.
Examples: The Catholic church, the army.
Orange organizations are driven by achievement and outcomes. Often likened to machines, these organizations are centered on processes and systems that both deliver and reward results.
Examples: Universities, large corporations (e.g. banks).
In Green organizations, the focus is on inclusion, empowerment, and motivation driven by a shared purpose. Green organizations still have hierarchies in place, but they seek to engage and create value for all stakeholders — not just a powerful few. Decisions are reached through consensus, with Green organizations often compared to families.
Examples: Ben & Jerry's, non-profit organizations.
Now we get to Teal — the most radical type of organization. According to Teal, each individual is called upon to contribute based on their unique strengths and potential. In Teal organizations, power is distributed across different teams and individuals organically on a case-by-case basis, allowing for continuous adaptation and evolution. There are no hierarchies, just self-managing teams where everybody is trusted to make decisions and be held accountable.
Examples: Patagonia, The John Lewis Partnership.
What are the Teal principles?
In his article The Future of Management Is Teal, Frédéric Laloux outlines the main factors that set Teal organizations apart. These are based on his own research into 12 different Teal companies.
Laloux found that, despite operating in different sectors and comprising different company types, all of the organizations he studied had certain things in common. These characteristics are now recognized as the 3 main Teal organization principles:
Teal organizations forgo traditional hierarchies and org charts in favor of self-managing teams and decentralized decision-making. In practice, this means they have structures and practices in place which give people autonomy in their domain and empower everybody to take responsibility and make decisions.
As Laloux explains:
“Decision rights and power flow to any individual who has the expertise, interest, or willingness to step in to oversee a situation. Fluid, natural hierarchies replace the fixed power hierarchies of the pyramid.”
This second Teal principle relates to how each individual shows up at work. Rather than encouraging people to only bring their ‘professional’ selves to work, Teal organizations create an environment which encourages full personal expression and embracing one’s inner wholeness. This is believed to enable people to bring “unprecedented levels of energy, passion, and creativity” to work.
According to Laloux, Teal organizations base their strategies on what they sense the world is asking of them. Instead of rigid plans, budgets, and targets, Teal organizations implement agile practices that can be adapted responsively and fluidly for different scenarios. He observes that, by shifting their focus away from the bottom line, Teal organizations actually tend to achieve better financial results than their competitors.
Is your company ready for Teal?
In theory, Teal might sound like the holy grail of workplace organization. However, before you consider “going Teal”, it’s essential to determine whether your company is truly suited to, and ready for, this somewhat radical style of management.
So how do you know if your company is ready for Teal? According to Laloux, there are two necessary foundational conditions for starting, or becoming, a Teal organization.
First and foremost, the CEO (or the top leadership role) must believe in the Teal vision and subscribe to the principles that make it possible. The second condition is shareholder buy-in. If shareholders/owners of the organization don’t understand and embrace the Teal vision, it will prove extremely difficult to uphold the practice of self-management when times get tough.
As Laloux puts it:
“When the organization hits a rough patch or faces a critical choice, owners [who don’t understand Teal] will want to regain control in the only way that makes sense to them: appointing a CEO who exerts top-down, hierarchical authority.”
And, of course, these two components are just the beginning. From there, you will need to hire and train people who are willing and able to self-manage and take responsibility — and implement the structures and processes that will empower them to thrive while doing so.
Do you have Teal-ready leaders? Are your employees and colleagues equipped to be autonomous and accountable? Are you aware of not just the pros but also the cons of going Teal, as well as the traps that organizations commonly fall into when trying to make the shift?
Only if you can answer “yes” to all of those questions should you consider adopting Teal management practices for your company. And, if you’re ready for the revolution but not sure where to start, this step-by-step guide will show you how to create or transition to a Teal model.
Anika Wegner, B2B Blog Editor
Exploring other cultures through language is particularly important to her. That's why she loves writing for Babbel about topics, how companies can benefit from language-learning solutions.