2. History of Organisational Structures

In trying to understand the evolution of organisational structures, Laloux (2014) noticed that every transition to a new stage of human consciousness had ushered in a whole new era in human history. Every new stage in human consciousness also came a breakthrough in the ability to collaborate, bringing about new organisational models. “Every time that we, as a species, have changed the way we think about the world, we have come up with more powerful types of organisations.” (Laloux, 2014)

Organisations as we know them today are simply the expression of our current worldview and our current stage of development. The same applies to older organisational structures where the model employed can be justified according to the historical background and surroundings (Laloux, 2014). Laloux (2014) classifies stages of human consciousness with organisational models and named the stages in five different colours: red, amber, orange, green and teal.

Laloux, F. (2014). pp.15–51.

The most common organisational structures adopted by multinational companies — such as Walmart, Nike or Coca-Cola, are in the orange stage. The traditional approach of these companies can be described as “Leaders and consultants design organisations. Humans are resources that must be carefully aligned on the chart, rather like cogs in a machine. Changes must be planned and mapped out in blueprints, then carefully implemented according to plan. If some of the machinery functions below the expected rhythm, it’s probably time for a “soft” intervention — the occasional team-building — like injecting oil to grease the wheels.” (Laloux, 2014)

In those types of organisations there is room for creativity and innovation but employees can still feel lifeless and soulless. The leadership tends to look at management through an engineering perspective. It is typically goal oriented, focused on solving tangible problems, putting tasks over relationships. It values dispassionate rationality and is wary of emotions; questions of meaning and purpose feel out of place. (Laloux, 2014)

The biggest problem of this organisations can be summarized as lack of meaning. Since they are driven by growth and this is the main metric for success, when it reaches the top people are bound to experience a sense of emptiness in their lives. Working in a Orange organisation can be a vehicle for self-expression and fulfillment but after years of work the lack of meaning can be a trigger for feeling empty. (Laloux, 2014)

As a way to fight against the weakness of Orange organisations, Green organisations focus on people’s feeling and believing that all perspectives deserve equal respect. It seeks fairness, equality, harmony, community, cooperation and consensus. “The self operating from this perspective strives to belong, to foster loose and harmonious bonds with everyone.” (Laloux, 2014)

Ideally Green organisations would abolish power and hierarchy, giving everybody the exact same power, for instance, having all workers as owners of the company in equal shares, making all decisions by consensus with nobody holding a direct leadership position (or if needed, working with a concept of rotating leadership). These extreme forms of egalitarian organisation have not been successful on a meaningful scale for any significant amount of time. Bringing about consensus among large groups of people is inherently difficult. Power can not also be wished away. (Laloux, 2014)

The balance between the Green and Orange organisations principles can help to create a successful organisation such as Southwest Airlines, Ben & Jerry’s, and the Container Store. All of them are run on Green practices and culture. (Laloux, 2014)

Teal Organisations

Teal organisations are driven by the ability of ‘taming’ leaders and employee’s egos. It is a stage where people make room to listen to the wisdom of others. People learn to decrease and minimise the urge and need to try to control people and the events that follow. Failure is seen as an opportunity to learn and grow. “With their ego under control, they don’t fear failure as much as not trying”. (Laloux, 2014)

At the Teal stage, decision-making is not focused on external factors, rather it shifts, focusing on internal guidelines. Decisions can often look risky but they are aligned with inner convictions. (Laloux, 2014) “In contrast with previous stages, the order is reversed: we do not pursue recognition, success, wealth, and belonging to live a good life. We pursue a life well-lived, and the consequence might just be recognition, success, wealth, and love.” (Laloux, 2014)

Instead of waiting problems to become a snowball and hit companies as an avalanche, Teal organisations prefer to make small adjustments, as they learn and grow from problems they encounter along the way. In contrast to previous stages where changes on a personal level could be seen as threatening, on Teal stage this is seen as a enjoyable tension in the journey of personal growth. (Laloux, 2014)

There is no judgement on the Teal stage. Every opinion and decision process is seen as having fundamental equal value. Active listening helps others to find their voice and truth, just as it helps each individual to find theirs. It creates a platform to change and recreate community on new grounding, where voices are heard, ideas shared with the aim of fostering selfhood and wholeness. The purpose, more than profitability, growth, or retaining market share is to create a platform for organisational decision-making, supporting people’s longing to be fully themselves at work, and be deeply involved in nourishing relationships. (Laloux, 2014)

The question arises as to what factors determine the exact level or stage an organisation operates at. According to Laloux (2014) “it is the stage through which its leadership tends to look at the world”. Leaders conscious or unconsciously put in place organisational structures, practices and cultures that make sense to them, that correspond to their way of dealing with their environments. “This means that an organisation cannot evolve beyond its leadership’s stage of development” (Laloux, 2014)

The leader can determine the stage of the company but civilization can pressure companies into change. Society organically starts to question the organisational structure according to their evolutionary stage. Freeman (n.d) indicates that ideas like structureless companies are “a natural reaction against the over-structured society in which most of us found ourselves, and the inevitable control this gave others over our lives, and the continual elitism of the left and similar groups among those who were supposedly fighting this over structuredness.”

Laloux (2015) posed the question “Could the current organisational disillusionment be a sign that civilization is outgrowing the current model and getting ready for the next?”. Society dynamically changes and constantly demands the evolution and generation of new organisational structures.

As teal organisations suggest (Laloux, 2014), purpose should guide the principle for organisational decision-making where structure should centre around organisational purpose. Sisney (2012) describes this by stating that “design means that something is structured in such a way that it allows it to serve its purpose”. (Sisney, 2012)