Laloux Culture Model

Laloux Culture Model

🔥 Originating from Frederic Laloux's book "Reinventing Organizations," the Laloux Culture Model has been widely used as a guiding tool in agile transformation and as an influential reference in agile related discussions. As its name implies, this model not only distinguishes different management models in various types of organizations, but also sheds light on the aspect of culture change that goes side by side with organizational evolution.

In an agile context, Laloux Culture Model reveals five levels of maturity in terms of organizational agility in correspondence to agile culture development:

Level 1: RED ORGANIZATIONS
Red organizations are analogized to a wolf pack. Power is highly concentrated in one or a few persons—the chieftain(s), and exerted through generating fear. They're highly short-term focused and very effective in chaotic environments. Typical examples are mafia, street gangs, and tribal militias. More on Laloux' Red Organizations.
Level 2: AMBER ORGANIZATIONS
Amber organizations are similar to armies. They are featured by a strict hierarchy with highly formal roles and straight reporting lines. This type of organization thrives in stable and predictable environments. Good examples include public schools, traditional churches, and government agencies.
Level 3: ORANGE ORGANIZATIONS
Orange organizations are metaphorized to machines. They aim at beating competition and achieving profit and growth through innovation. They are result-oriented; accountability and meritocracy based on delivered results are reflected in their management processes and reward systems. Representative examples are large corporations and public universities. More on Laloux' Orange Organizations.
Level 4: GREEN ORGANIZATIONS
Green organizations resemble families. Although still operating in a hierarchy, they focus on empowerment and motivate people by a shared purpose and value-driven culture that are beyond profit—creating value for all stakeholders in a balanced way. This type of organization applies participative, servant leadership that encourages consensus decision making and employee engagement. Good examples include Ben&Jerry's, Southwest Airlines, etc.
Level 5: TEAL ORGANIZATIONS
The best metaphor for teal organizations is a living organism. Power is shared and decentralized into autonomous teams. Hierarchical pyramid is replaced by self-management, as people are trusted to make major decisions themselves and to be held accountable for business results. The organization is truly like a living system that adapts and evolves organically and continuously. The best examples are Morning Star, Buurtzorg, and Patagonia, etc.

Note that these five levels are not ranked in the order of superiority, i.e. a higher level is not absolutely better than a lower level. It's more a matter of suitability—some types of organizations thrive in Green or Teal models, while some are better off staying in Orange or Amber zones. For example, it's impossible to manage a military force in the Teal organizational form—self-management simply isn't compatible with an army whose existence relies on a well-defined hierarchical structure and disciplines.

On the other hand, more and more organizations worldwide are initiating enterprise-wide agile transformation that requires not only adoption of IT-related agile methodologies, but also an all-inclusive mindset shift towards embracing agile culture and leadership. For these organizations, self-managing companies such as Morning Star are their exemplars and the Teal zone (or Green zone) is their aimed destination.

Source:
Ulrich Gerndt (2014) about Frederic Laloux „Reinventing organizations".

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Gandhi Heryanto
Management Consultant, Indonesia

The Future of Management is Teal

In another article by Laloux (2015), "The Future of Management Is Teal", Strategy + Business, Laloux is arguing that organizations move along the evolutionary spectrum, towards self-management, wholeness, and deeper goals which will eventually become the Teal model.
In principle, the Teal Model is a management model with a culture that facilitates self-management, integrity and purpose of evolution. Teal organizations build structures and practices by people who have high autonomy in their area, and are responsible for coordinating with others. They create an environment where people feel free to fully express themselves, bringing a level of energy, enthusiasm, and creativity. Their strategy is based on what they feel the world is asking of them.
Research shows that there are two conditions needed to develop Teal organizations, namely top leadership and ownership. The chief executive must have an integrated worldview and psychological development that is consistent with the Teal paradigm. And the organization, the employees, must also understand and accept Teal's world view.

Dennis van der Spoel
Management Consultant, Netherlands

Conflicting Paradigms

In the 1970s, Clare Graves studied human development. While Abraham Maslow was formulating the hierarchy of human needs, psychologist Clare W. Graves was examining what makes people different in their behaviors, values, and worldviews. Graves' over 20 years of research yielded what he called the levels of existence. Questioning thousands of participants in longitudinal studies, he found there are specific stages of development in human values.
Graves and Maslow were contemporaries. Graves initially sought to validate Maslow's conclusions. Grave's detailed research, however, revealed many psychological insights that went beyond Maslow's Hierarchy of Needs.
But Graves passed away in 1986—before he completed and published his work. This partly explains why his work is less well known than Maslow's even though, in manyways, this research is richer and more instructive for understanding our psychology. Grave's research was picked up by Don Beck and Christopher Cowan who coined the term “Spiral Dynamics” and published their book by the same title in 1996. And they were the ones who introduced the now well-known colors. During that time, Dr. Don Beck came into contact with the American integral philosopher Ken Wilber. They became inspired by each other's work and decided to integrate both their models – thus adding the ‘i' to Spiral Dynamics: SDi was born. This led to a schism between Cowan, who favored a science-based approach, and Beck and Wilber, who took the philosophical route. Beck and Wilber had to change their version of Spiral Dynamics due to Intellectual property issues, so they changed the original color scheme. Hence yellow became teal.
Unfortunately, Laloux came across the unscientific version of Spiral Dynamics and popularized it under his own name. Therefore, the book suggests a lot of wishful thinking which is not supported by science. The original version of SD has more merit.