Highlights from Reinventing Organizations

I believe it has to do with the belief system of our times: in a hierarchical worldview, there can be only one brain in command, just as there must be a single boss at the head of every organization.

Then suddenly, almost out of nowhere, modernity has brought us unprecedented wealth and life expectancy in the last two centuries.

It is probably no exaggeration, but sad reality, that the very survival of many species, ecosystems, and perhaps the human race itself hinges on our ability to move to higher forms of consciousness and from there collaborate in new ways to heal our relationship with the world and the damage we’ve caused.

It turns out that, throughout history, the types of organizations we have invented were tied to the prevailing worldview and consciousness.

Every transition to a new stage of consciousness has ushered in a whole new era in human history.

While Red Organizations can be extremely powerful (especially in hostile environments where later stages of organizations tend to break down), they are inherently fragile, due to the impulsive nature of people’s way of operating (I want it so I take it).

Size and stability become possible because people in Conformist-Amber are content to stay in their box and not vie for a higher prize. People operating from this stage identify with their roles, with their particular place in the organization.

Where Red’s perspective was egocentric and Amber’s ethnocentric, Orange brought about the possibility of a worldcentric perspective.

The fears of the ego often undermine good intentions.

Bringing about consensus among large groups of people is inherently difficult. It almost invariably ends up in grueling talk sessions and eventual stalemate. In response, power games break out behind the scenes to try to get things moving again.

Consciously or unconsciously, leaders put in place organizational structures, practices, and cultures that make sense to them, that correspond to their way of dealing with the world.

The shift to Evolutionary-Teal happens when we learn to disidentify from our own ego. By looking at our ego from a distance, we can suddenly see how its fears, ambitions, and desires often run our life. We can learn to minimize our need to control, to look good, to fit in.

We are ready to let go of anger, shame, and blame, which are useful shields for the ego but poor teachers for the soul. We embrace the possibility that we played a part in creating the problem, and inquire what we can learn so as to grow from it.

As a result, there are very, very few people working in staff functions in Teal Organizations. And those that do typically have no decision-making authority. They can provide guidelines but cannot impose a rule or a decision.

The higher you go, the more lines converge. It is only at the very top that the different departments such as sales, marketing, R&D, production, HR, and finance meet. Decisions are naturally pushed up to the top, as it’s the only place where decisions and trade-offs can be informed from the various angles involved. It’s almost deterministic: with a pyramidal shape, people at the top of organizations will complain about meeting overload, while people below feel disempowered.

The general philosophy is one of reverse delegation. The expectation is that the frontline teams do everything, except for the things they choose to push upward.

The heart of the matter is that workers and employees are seen as reasonable people that can be trusted to do the right thing. With that premise, very few rules and control mechanisms are needed.

A huge amount of time is freed by dropping all the formalities of project planning—writing the plan, getting approval, reporting on progress, explaining variations, rescheduling, and re-estimating, not to mention the politics that go into securing resources for one’s project or to find someone to blame when projects are over time or over budget.

using voluntary task forces instead of fixed staff functions has multiple benefits. Employees find avenues to express talents and gifts that their primary role might not call for. They develop a true sense of ownership and responsibility when they see they have real power to shape their company.

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.

Without boxes to put people into, the organization chart disappears and it’s not always easy to know who is responsible for what.

Every role people take on is a commitment they make to their peers. They are not accountable to one boss; every one of their peers is a boss in respect to the commitments they made.

Through these weekly one-on-one discussions, teachers and students know each other on a much deeper level than in traditional schools.

The advice process transcends this opposition beautifully: 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.

I have noticed that for some reason, many people naturally assume that in the absence of bosses, decisions in self-management organizations will be made by consensus. And because they have been scarred by the paralysis and endless discussions that often come when people seek consensus, they are quick to dismiss self-management as a viable way to run organizations.

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.

If traditional companies rarely hold all-hands meetings, it is precisely because they can be unpredictable and risky. But in that very risk lies their power to reaffirm an organization’s basic assumptions and to strengthen the community of trust.

Things would change under you: one day we are doing it this way, the next day we’d completely change something core, and the next day it’s yet different and we’re always running to catch up.

Self-management, just like the traditional pyramidal model it replaces, works with an interlocking set of structures, processes, and practices; these inform how teams are set up, how decisions get made, how roles are defined and distributed, how salaries are set, how people are recruited or dismissed, and so on.

The tasks of management—setting direction and objectives, planning, directing, controlling, and evaluating—haven’t disappeared. They are simply no longer concentrated in dedicated management roles. Because they are spread widely, not narrowly, it can be argued that there is more management and leadership happening at any time in Teal Organizations despite, or rather precisely because of, the absence of fulltime managers.

Power is not viewed as a zero-sum game, where the power I have is necessarily power taken away from you. Instead, if we acknowledge that we are all interconnected, the more powerful you are, the more powerful I can become. The more powerfully you advance the organization’s purpose, the more opportunities will open up for me to make contributions of my own.

With freedom comes responsibility: you can no longer throw problems, harsh decisions, or difficult calls up the hierarchy and let your bosses take care of it. You can’t take refuge in blame, apathy, or resentfulness. Everybody needs to grow up and take full responsibility for their thoughts and actions—a steep learning curve for some people.

At check-in, participants are invited to share how they feel in the moment, as they enter the meeting. The practice brings participants to listen within, to reconnect with their body and sensations, and to grow the capacity for awareness in the moment. Naming an emotion is often all it takes to leave it behind and not carry it over into the meeting.

all colleagues have the opportunity to learn a simple three-step process for difficult conversation: Step 1: Here is how I feel. Step 2: Here is what I need. Step 3: What do you need?

Many blue-collar workers join FAVI scarred from past experience of mistrust and command and control. Joining an environment where they are considered trustworthy and where their voice counts is often a groundbreaking experience.

You have full liberty to find a solution, but until you have found one, you are bound to your previous commitments.

four simple statements for the yearly appraisal discussions: State an admirable feature about the employee. Ask what contributions they have made to Sun. Ask what contributions they would like to make at Sun. Ask how Sun can help them.

But such feedback should be given on the spot, all year round, and not left unsaid, waiting for the appraisal discussion at the end of the year.

Instead, people in these companies have a very clear, keen sense of the organization’s purpose and a broad sense of the direction the organization might be called to go. A more detailed map is not needed. It would limit possibilities to a narrow, pre-charted course.

Predictions are valuable in a complicated world, but they lose all relevance in a complex world.

The decision can be reviewed at any time if new data comes up or someone stumbles on a better idea.

In both cases, if there is a workable solution on the table—”workable” meaning a solution that nobody believes will make things worse—it will be adopted.

Is my heart at work? Do I sense that I am at the right place?

We each have full responsibility for the organization. If we sense that something needs to happen, we have a duty to address it. It’s not acceptable to limit our concern to the remit of our roles.

Put supportive structures, practices, and processes in place (lower-right quadrant) Ensure that people with moral authority in the company role-model the behavior associated with the culture (upper-right quadrant) Invite people to explore how their personal belief system supports or undermines the new culture (upper-left quadrant)

There are three ways to help put new cultural elements in place: through practices that support corresponding behavior, through role-modeling by colleagues with moral authority, and by creating a space where people can explore how their belief system supports or undermines the new culture.

Over and over again, the CEO must ensure that trust prevails and that traditional management practices don’t creep in through the back door.

That is the magic of organizations: their processes can lift up employees to adopt behaviors from later stages of consciousness that they might not yet have integrated at an individual level.

Fighting the inner urge to control is probably the hardest challenge for founders and CEOs in self-managing organizations. Over and over again, they must remember to trust.

CEOs that role-model virtues such as humility, trust, courage, candor, vulnerability, and authenticity invite colleagues to take the same risks.

Every time a team presents, a new picture of a desirable future is woven into the collective consciousness.

Through purpose: Individual energies are boosted when people identify with a purpose greater than themselves.
Through distribution of power: Self-management creates enormous motivation and energy. We stop working for a boss and start working to meet our inner standards, which tend to be much higher and more demanding.
Through learning: Self-management provides a strong incentive for continuous learning. And the definition of learning is broadened to include not only skills but the whole realm of inner development and personal growth.
Through better use of talent: People are no longer forced to take management roles that might not fit their talents in order to make progress in their careers. The fluid arrangement of roles (instead of predefined job descriptions) also allows for a better matching of talent with roles.
Less energy wasted in propping up the ego: Less time and energy goes into trying to please a boss, elbowing rivals for a promotion, defending silos, fighting turf battles, trying to be right and look good, blaming problems on others, and so on.
Less energy wasted in compliance: Bosses’ and staff’s uncanny ability to create policies generates wasteful control mechanisms and reporting requirements that disappear almost completely with the self-management.
Less energy wasted in meetings: In a pyramid structure, meetings are needed at every level to gather, package, filter, and transmit information as it flows up and down the chain of command. In self-managing structures, the need for these meetings falls away almost entirely.

Through better sensing: With self-management, every colleague can sense the surrounding reality and act upon that knowledge. Information doesn’t get lost or filtered on its way up the hierarchy before it reaches a decision maker.
Through better decision-making: With the advice process, the right people make decisions at the right level with the input from relevant and knowledgeable colleagues. Decisions are informed not only by the rational mind, but also by the wisdom of emotions, intuition, and aesthetics.
Through more decision-making: In traditional organizations, there is a bottleneck at the top to make decisions. In self-managing structures, thousands of decisions are made everywhere, all the time.
Through timely decision-making: As the saying goes, when a fisherman senses a fish in a particular spot, by the time his boss gives his approval to cast the fly, the fish has long moved on.
Through alignment with evolutionary purpose: If we believe that an organization has its own sense of direction, its own evolutionary purpose, then people who align their decisions with that purpose will sail with the wind of evolution at their back.

People might not just reduce or increase the number of hours they work as employees. They might switch between employment (fulltime and/or part-time) and freelance work; they might at others times choose to volunteer, donate money, or temporarily have no involvement at all with an organization, only to come back later.

Many of us sense that the current way we run organizations is deeply limiting.

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