Reinventing Organizations
In the future, leadership will be based on sharing. The interpretation of CEO will no longer be ‘Chief Executive Officer’ but ‘Chief Enabling Officer’. It will be essential to move away from hierarchical silos and using profit margins as the sole management tool. Leading from the top is poison for innovation; more intrapreneurship from below will lead companies and organizations to success.
Many people sense that the way organizations are run today has been stretched to its limits. In survey after survey, businesspeople make it clear that in their view, companies are places of dread and drudgery, not passion or purpose. Organizational disillusionment afflicts government agencies, non-profits, schools, and hospitals just as much. Further, it applies not just to the powerless at the bottom of the hierarchy.
Today, this hierarchical and process-driven model is visible in large bureaucratic enterprises, many government agencies, and most education and military organizations. In Amber organizations, thinking and execution are strictly separated. People at the bottom must be instructed through command and control. In today’s fast-changing, knowledge-based economy, this static, top-down conception of management has proven to be inefficient; it wastes the talent, creativity, and energy of most people in these organizations.
The leap to Orange coincided with three significant management breakthroughs that gave us the modern corporation.
First was the concept of innovation, which brought with it new departments such as R&D, product management, and marketing, as well as project teams and cross-functional initiatives.
Second was accountability, which provided leaders with an alternative to commanding people: Give people targets to reach, using freedom and rewards to motivate them. This breakthrough, sometimes called management by objectives, led to the creation of modern HR practices, budgets, KPIs, yearly evaluations, bonus systems, and stock options.
Third was meritocracy, the idea that anyone could rise to any position based on his or her qualifications and skills — a radical concept when it appeared.
Postmodernity brought us another world view. The Green stage stresses cooperation over competition and strives for equality, solidarity, and tolerance. Green organizations, which include many non-profits as well as companies such as Southwest Airlines, Starbucks, and the Container Store, consider social responsibility the core of their mission. They serve not just shareholders but all stakeholders, knowing that this often results in higher costs in the short term, but better returns in the end.
Green leaders have championed the soft aspects of business — investing in organizational culture and values, coaching, mentoring, and teamwork — over the hard aspects of strategy and budgeting so prized in Orange. Family is their metaphor; everyone’s voice should be heard and respected. You can’t treat knowledge workers like cogs in a machine.
Empowerment and egalitarian management are among the breakthroughs they introduced.
Today, in small but increasing numbers, leaders are growing into the next stage of consciousness, beyond Green. They are mindful, taming the needs and impulses of their ego. They are suspicious of their own desires — to control their environment, to be successful, to look good, or even to accomplish good works. Rejecting fear, they listen to the wisdom of other, deeper parts of themselves. They develop an ethic of mutual trust and assumed abundance. They ground their decision making in an inner measure of integrity. They are ready for the next organizational paradigm. Its color is Teal.
Like previous leaps to new stages of management, the new model comes with a number of important breakthroughs:
• Self-management. Teal organizations operate effectively, even at a large scale, with a system based on peer relationships. They set up structures and practices in which people have high autonomy in their domain, and are accountable for coordinating with others. Power and control are deeply embedded throughout the organizations, no longer tied to the specific positions of a few top leaders.
• Wholeness. Whereas Orange and Green organizations encourage people to show only their narrow “professional” selves, Teal organizations invite people to reclaim their inner wholeness. They create an environment wherein people feel free to fully express themselves, bringing unprecedented levels of energy, passion, and creativity to work.
• Evolutionary purpose. Teal organizations base their strategies on what they sense the world is asking from them. Agile practices that sense and respond replace the machinery of plans, budgets, targets, and incentives. Paradoxically, by focusing less on the bottom line and shareholder value, they generate financial results that outpace those of competitors.
During a recent session of ECCP’s Human Capital Club, we shared key insights on how to create and reinvent one’s company into a Teal Organization, based on the book and research of Frederic Laloux. Some key learnings were that organizations should empower employees to self-manage and bring their real selves into the workplace. We also shared insights on the 10 Commandments of Intrapreneurship where ideally an employee should treat his role in an organization as if it were his own business.
We mentioned that the ideas presented can be implemented in stages and ECCP and partners are in standby to assist organizations to introduce those changes that will empower employees and get the best out of the biggest asset of companies – its people.
If you are interested to learn more about shifts in leadership and how human capital can be nurtured into becoming the asset we deserve, talk to us at the European Chamber of Commerce (ECCP) or visit our website – www.eccp.com.
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