Reinventing Organisations – Laloux

I think historically I've been very biased towards alternate leadership styles that set out to "break the mould". However, having spent a lot of time reading and thinking about leadership, I think there is something fallacious about this idea.

Reinventing organisations is not a book I would recommend anyone to read, particularly if you are looking for a model for your business.

I would however recommend it to someone who is doing a broader study of leadership and wants an alternate view to critique and sharpen their understanding of what management/leadership is.

Notes

  • Much of this book is predicated on the fact that hierarchy creates demotivating environments to be in.
  • I think there is a risk of throwing the baby out with the bathwater.
  • Hierarchies not only provide economies of scale (the point made in the book) but also provide clarity to people in the organisation.
  • Are there are other ways to deal with the ego and competition that arises from hierarchies other than destroying the hierarchy itself.
  • The good point that is made is that hierarchies often default to having experts which creates centralisation, bottlenecks and power hierarchies. Collaborative decentralised organisations can often outperform in this aspect because the expertise becomes abundant in that anyone can contribute.
  • A belief and trust in fellow team members as responsible adults is really what teal organisations are based on. This does not nescesarily mean decentralisation.
  • I think the above is what makes me feel slightly off about this book**. There is a conflation between the organisational model and the underlying cultural standpoint that isn’t always direct.**
  • The point of teal organisations is not that the are always decentralised or always autonomous. The point is that they put away the ego of power dynamics and build processes and structures that take advantage of wherever the expertise/knowledge is; regardless of that’s at the top or the “bottom”.
  • “Emulation and peer pressure regulate better than hierarchy”. Japanese social life exhibits this strongly. Laws are not enforced by authority and might but rather by social stigma and pressure.
  • Trust and autonomy create an environment where everyone is empowered to do what they believe is right without being driven by fear of reprimand.
  • Teal organisations are free from ego, fear and power dynamics.
  • Teal organisations better utilise the collective intelligence of the system by not expecting any one person to be able to make all important decisions.
  • The advise process can be applied to hierarchical companies just as much as distributed self-managing teams.
  • One of the problems with the traditional hierarchy is that people higher up feel the need to prove their worth as an important person, and hence when it comes to big decisions that would benefit from wider input, they tend to hold back the problem and work on it in secrecy and then release a final plan that people have to like.
    • The cure to the above is not necessarily no hierarchy, but could also be a lack of ego, fear, and pressure to justify oneself. All of these things could come from a more self-aware organisation.
  • When there is a decision to withhold information ask yourself: What is the underlying assumption that this decision is based on?
  • The conflation between self-managing teams and empowered teams is probably the most glaring problem with this book. They are not one and the same.
    • McGregor posed the idea that authority is appropriate in correlation with how dependant the working person is. The more dependant the more appropriate authoritative leadership is 🤷‍♂️
  • The reality is that self-management (like remote working) won’t be for everyone, and that’s the problem with seeing it as an evolution of the organisation model, it doesn’t cater to the average.
  • When you take away all th stuff of on top of what he is saying, one of the important things about Teal organisations is their underlying assumptions about people.
  • The teal organisations in the book have the underlying assumption that people are good, want to do good work, and are grown adults who can be trusted.
  • When you operate from this underlying assumption (rather than the assumption that people are lazy, want to slack off, and will cheat you at all costs) you create a very different organisation culture.
  • Teal organisations are not about self-management vs hierarchies; they are about underlying assumptions and reduction of ego (desire for power, self promotion, etc).
  • Four ways to assess a company culture:
    • Beliefs, mindsets, underlying assumptions (II)
    • Behaviours (EI)
    • Culture (IC)
    • Structure, processes, systems (EC)
  • Integral Theory – states that to get the most accurate understanding of a phenomenum it must be viewed from four perspectives across two spectrums: Interior → Exterior and Individual → Collective. This results in the quadrants:
    • Interior-Individual (II)
    • Exterior-Individual (EI)
    • Interior-Collective (IC)
    • Exterior-Collective (EC)
  • I think the underlying mistake of this theory was to couple“self-management” with Teal organisations so strongly.
    • “Hierarchy” often helps provide clarity. People’s whose role it is to integrate information across functions and analyse the outside markets will be able to provide insight and clarity to those people inside whose role it is to build and create.
    • I don’t think that Teal organisations should get too distracted with “self-management” and “no-hierarchies”. Rather there should be a push to move decision making closest to the function affected by it, and allow insight/advice to flow from where people who have experience and focus on it.
  • The problem with the argument that RO makes is that it takes a very qualitative approach to proving that Teal organisations ARE an improvement over Green. It tells some stories of how some problems got resolved or how people felt happier and more fulfilled. Rather what would have been needed is to show that objectively, when switching to Teal practices satisfaction goes up, cooperation increases, etc. Not just qualitative stories from a handful of companies. THere is nothing conclusive or even strong about a sample size of 5.
  • Further, there are many Green organisations who create similar results without the complexity of self-management.
  • “Some people are too scarred from years of control to adapt to self-management” – This seems pretty egotistical tbh. Is it that they are scarred, or that there are certain personality types that prefer structure and saftey, over freedom and autonomy?
  • One of the big things I’m getting from Teal organisations is that they give power and control to the people closest to the problem, and not simply people “higher” in the organisations.

Underlying assumptions of Green/Organge

  • That people “higher” up a hierarchy are there because they are smarter and more educated, hence will make “better” decisions.
  • That only “smart” people with a lot of inputs can make good decisions.
  • That people’s day to day work needs to be managed to ensure that they are doing their job well.

Quotes

  • "as human beings, we are not problems waiting to be solved, but potential waiting to unfold."
  • "When life is seen as a journey of discovery, then we learn to deal more gracefully with the setbacks, the mistakes, and the roadblocks in our life. We can start to grasp the spiritual insight that there are no mistakes, simply experiences that point us to a deeper truth about ourselves and the world."
  • "They understand that the economies of scale and skill resulting from staff functions are often outweighed by the diseconomies of motivation produced."
  • "Staff functions provide economies of scale, or so goes the usual rationale. Economies of scale can easily be estimated in hard dollar figures, whereas it is virtually impossible to peg a number to the diseconomies of motivation."
  • "From Buurtzorg’s inception, Jos de Blok envisioned that the “BuurtzorgWeb” would be a critical piece in the company’s self-managing puzzle. The alternative—attempting to centralize knowledge within a staff of experts—would most likely be less effective and more costly."
  • "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."
  • "trust is extended, it breeds responsibility"
  • "Emulation and peer pressure regulates the system better than hierarchy ever could."
  • "Ultimately, it comes down to this—fear is a great inhibitor."
  • "When organizations are built not on implicit mechanisms of fear but on structures and practices that breed trust and responsibility, extraordinary and unexpected things start to happen."
  • "At Sun, people have dropped the illusion that one person, however competent, could master all the information of such a complex system and heroically, from above, make the right call for hundreds of decisions that need to be made every week. Instead, they trust the collective intelligence of the system."
  • "If no one picks up a certain problem or opportunity, it probably means it is not important. Otherwise it will come up again, and someone will end up tackling it."
  • "in principle, any person in the organization can make any decision. But before doing so, that person must seek advice from all affected parties and people with expertise on the matter."
  • "Obviously, the safer option would have been to ask the head of human resources (HR) to discreetly work out a number of scenarios, confidentially convene the management team to discuss them, and hide the problem from the workers until a decision was ready to be announced. (In the case of FAVI, of course, Zobrist didn’t have an HR director nor an executive team at hand, but he could have convened a few trusted advisors.) This method is the tried-and-true way leaders have learned to handle sensitive issues in organizations. Whether they realize it or not, this approach is driven by a leader’s fear: fear that employees might not be able to handle difficult news; fear that the leader’s legitimacy might be questioned if he doesn’t call the shots; and fear that he might look like a fool if he discusses a problem before he has fully figured out a solution."
  • "In the absence of hierarchy, self-managing teams need to have all available information to make the best decisions."
  • "One of the core elements of Holacracy, which can be found in all Teal Organizations in this research, is to separate role from soul, to break the fusion of identity between people and their job titles. In holacratic language, people don’t have a job, but fill a number of granular roles. Where Holacracy goes further than other organizations is in the elegant process through which roles are defined."
  • "In the last 20 years, it’s become a general practice in large corporations to set up talent management programs. Managers throughout the company are asked to identify high potentials, which HR puts on special training tracks and provides with stretch assignments to prepare them for higher offices. Succession planning is another best practice in human resources—for every management position throughout the company, possible successors must be identified and groomed to be ready to take over. And then there is career planning. For every type of profile, HR should think through the best career paths that expose people to the right set of skills as they make their journey up the management ranks."
    • Similar to drukers point about organisations main function to be growing leaders .
  • "Almost all organizations studied here have abandoned the practice of individual incentives. Seen from an Evolutionary-Teal perspective, it’s a rather sad image we have of people if we believe that their primary motivation is the size of the carrot we dangle in front of them. In his book Drive, Daniel Pink concludes from a great amount of research on the matter that in today’s complex work settings, incentives are mostly counterproductive, reducing rather than enhancing people’s performance."
  • "Clouds form and then go away because atmospheric conditions, temperatures, and humidity cause molecules of water to either condense or vaporize. Organizations should be the same; structures need to appear and disappear based on the forces that are acting in the organization. When people are free to act, they’re able to sense those forces and act in ways that fit best with reality."
  • "Teal Organizations’ second breakthrough: to create a space that supports us in our journey to wholeness."
  • "During most of the process, team members can ask only open-ended questions; they become fellow travelers into the mystery of the issue the person is dealing with."
  • "Several of the companies in this research start meetings with a round of check-in and finish with a round of check-out."
  • "At Sounds True, 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?"
  • "The organizations in this research have not yet reached the ultimate goal of zero waste, zero toxicity, and zero impact on ecosystems, but many have taken significant steps in that direction. AES, for instance, started planting millions of trees in the 1990s to offset the carbon footprint from its coal-fired plants, at a time when global warming was not yet center stage."
    • This idea that yeal organizations are somehow perfect weakens your argument
  • "But these pioneers seem to believe that, more than advanced accounting systems, we need integrity and wholeness to transcend the primacy of profits and heal our relationship with the world."
    • While this can work it is trying to ignore the basis of capitalism in which it operates.
  • "Assessments are never objective (at best we can say they are culturally grounded, if many people share the same assessment), but nevertheless we often believe that they are. We turn our subjective impressions into “truths” about a person; no wonder they resist our feedback."
  • "Growth, in the same vein, is only an objective insofar as the purpose can be manifested on a larger scale, but never an objective in itself."
  • "Teal Organizations don’t set any top-down targets."
  • "“In the new way of thinking, we aim to make money without knowing how we do it, as opposed to the old way of losing money knowing exactly how we lose it.”"
  • "Who knows? Who cares? They are all working hard, doing the best they can. We have good people in all the places around the world and if I need that sort of scorecard I probably got the wrong person. That’s just the way we operate. … If I’m the head of sales of Sun in the US and you ask me what is the forecast, I have no clue! How could I generate one anyway? … At the end of the day, there is so much outside of your control. … It’s impossible to predict the unpredictable."
    • Different underlying assumption.
  • "The essential question is: Should we respond to one instance of corporate theft by lowering the bar of trust, and in so doing treat 3,000 people as though they too might be thieves?"
  • "What is wrong with the CEO having real-time access to the performance data of all the plants? Nothing in principle (as long as the same data is supplied to everyone else too)."
  • "What Teal leaders recognize—but need to remind themselves and others of—is that personal and collective success are both wonderful when they come as a consequence of pursuing a meaningful purpose, but that we should be careful not to pursue success as a goal in itself, careful not to fall back into competitive drives that serve our ego and not our soul, that serve the organization but not its purpose."
  • "The advice process: From the start, make sure that all members of the organization can make any decision, as long as they consult with the people affected and the people who have expertise on the matter. If a new hire comes to you to approve a decision, refuse to give him the assent he is looking for. Make it clear that nobody, not even the founder, “approves” a decision in a self-managing organization. That said, if you are meaningfully affected by the decision or if you have expertise on the matter, you can of course share your advice."
  • "A conflict resolution mechanism: When there is disagreement between two colleagues, they are likely to send it up to you if you are the founder or CEO. Resist the temptation to settle the matter for them. Instead, it’s time to formulate a conflict resolution mechanism that will help them work their way through the conflict. (You might be involved later on if they can’t sort the issue out one-on-one and if they choose you as a mediator or panel member.)"
  • "Peer-based evaluation and salary processes: Who will decide on the compensation of a new hire, and based on what process? Unless you consciously think about it, you might do it the traditional way: as a founder, you negotiate and settle with the new recruit on a certain package (and then probably keep it confidential). Why not innovate from the start? Give the potential hire information about other people’s salaries and let them peg their own number, to which the group of colleagues can then react with advice to increase or lower the number. Similarly, it makes sense right from the beginning to choose a peer-based mechanism for the appraisal process if you choose to formalize such a process. Otherwise, people will naturally look to you, the founder, to tell them how they are doing, creating a de facto sense of hierarchy within the"
  • "Some people have been so scarred by years of command and control that they can’t seem to adjust to life without a boss."
  • "All the people in our company seem to be fully at ease with themselves and with their colleagues, brimming with enthusiasm and energy. Nobody wears a mask or pretends to be someone he is not. Everybody is using his or her talents to the fullest and seems incredibly alive."
    • What a burdon to place on peopke
  • "I’m afraid that an academic framing to the question is, for practical reasons, so difficult to establish that any academic claims in the field would be questionable at best. We will have to trust anecdotal evidence and personal experience to provide an answer. The sample size of a dozen organizations researched for this book does not allow us to make sweeping conclusions in that regard, but it nevertheless provides meaningful anecdotal evidence that Teal Organizations can achieve spectacular outcomes."
    • Lol my nkote exactly
  • "Liberating previously unavailable energies"
    • None of tthrse seem difrectly tied to 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."

sebastiankade

Sebastian Kade, Founder of Sumry and Author of Living Happiness, is a software designer and full-stack engineer. He writes thought-provoking articles every now and then on sebastiankade.com

Leave a Reply

Your email address will not be published. Required fields are marked *