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Blog : Bullet–point Business Books: Reinventing Organisations by Frederic Laloux

Blog

Bullet–point Business Books: Reinventing Organisations by Frederic Laloux


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Reinventing Organisations is a handbook for leaders and others who appreciate that something is broken in the way organisations are run and are looking for the more contemporary ‘how tos’ to put things right. Laloux explains the evolution of organisations from Red (e.g. tribal, street gangs) through Amber (military, church, public or Government agencies), Orange (multinational companies), Green (Southwest Airlines, Ben & Jerrys) through to this new organisational type, the TEAL organisation

It’s a book of three parts:

  • The first explains how every time people wake up to the need for change there comes about a revolution towards a better organisational model – the Teal company - suggesting that business is about to make this leap again when it comes to how organisations are managed.
  • Part two contains examples and case studies of how a new, more ‘soulful’ way to run an organisation has evolved. This is a practical section with plenty of ‘how tos’. By getting rid of many of the rules such as targets, job descriptions and rigid adherence to budgets, organisations have been transformed – the book gives some surety that this approach can, and does, work to great effect.
  • The third and final section examines what conditions will be needed for these new ways to work, causing their organisations to thrive.

 

The organisations that have successfully adopted this newer approach reveal three major breakthroughs:

  • Self-management: the key to operating effectively (even at large scale) is a system based on cohesive peer relationships without the need for hierarchy or wider consensus.
  • Wholeness: this allows individuals to bring ‘the whole self’ to work rather than pretend to be what they are not to fit in – they are free to bring the softer sides of themselves (such as emotion and intuition) so as to use their whole authentic characteristics for the good of the organisation.
  • Evolutionary purpose: people are invited to listen in and become involved in what the organisation wants to become; what purpose it wants to serve rather than operating within a more controlled vision of the future. This allows them to make improvements and take up opportunities that the traditional hierarchy might have been unaware of.

 

Case study in brief: How the Dutch Buurtzorg medical organisation (an achievement-orange organisation) moved to evolutionary-teal:

  • Traditional home nursing care systems typically have specialised tasks with planners to organise them and their daily schedules, call centres took patient calls, and a regional hierarchy emerged. Time norms were established with certain, more experienced nurses, administering certain ‘products’. This way of operating makes perfect sense in theory though the downsides are that nurses never get to know and bond with patients and patients receive very fractured care.
  • Buurtzorg reorganised into small, self-managing teams, each serving around 50 patients within a pre-determined neighbourhood. They decided how best to serve their patients and to serve the local community. They worked out their own schedules and allocation of tasks. There was no team leader; important decisions were made collectively.  Patient care is more consistent and there’s even time for a cup of tea and a chat – every bit as important to home patents as administering drugs and changing dressings.
  • A 2009 Ernst & Young study found that Buurtzorg requires, on average, 40% fewer care hours per client than other nursing organisations E & Y estimate that if every nursing home in the Netherlands followed suit, close to two billion euros would be saved.

 

This is an example of how allowing sensible adults to make their own decisions, using their knowledge and expertise to best effect, can bring about a more authentic, successful and purposeful environment.  This challenges the reality that central decision makers often don’t have the information to manage the specifics of corporate life. Many large organisations employ the traditional model and as a result find them ‘chasing their tails ‘to satisfy the corporate machine rather than doing what is right for the organisation to thrive and evolve. As more power is amassed at the top, rigid hierarchies emerge, workers lose their freedom, motivation wanes and productivity eventually slows.

Reinventing Organisations provides some of the ‘how tos’ to modernise organisational thinking, together with plenty of examples to illustrate that this approach can, and does, work in practice.

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