Teal Organization, those who have read the enlightening book from Frederic Laloux „Reinventing Organization“ understand very well what is meant by that phrase. Organizations spanning all the spectrum of industry domains (e.g. Energy, Healthcare, Automotive), purposes (Profit, Non-Profit, School) and size (SMEs, multinational) have adopted, independently from each other, different values and principles, away from the typical hierarchical structure and command & control management style. It is sometimes being called the “No Manager” Company and of course this created the buzz.
Those organizations are not only successful businesswise but their employees are happy. There is obviously a strong correlation between the two. What a change in a world where, according to Gallup, only 13% of employees are engaged in their work (this is an average and the value differs from region to region). As Jean Francois Zobrist, former CEO of FAVI, one of those Teal organizations, put it, “there is no performance without happiness”. FAVI is an example of organizations which should not have survived the globalization. They are producing among others, shift work, being the one of the few in Europe (in the heart of France) whereas the competitors closed or moved to far east. It is not an IT company or a service company but a factory! And they became a Teal organization or “entreprise libérée” (liberated firm as phrased by Isaac Getz) already in the early 80’s.
Here are a few points that characterize those organizations:
- Very flat structure with few managers. Actually managers are transformed into “coaches” for the team.
- Organized into autonomous self-organizing teams (e.g. in FAVI, those are called mini-factories that work specifically for one customer).
- A different approach to decision making i.e. decentralization. This means that first of all, decisions are made by people that are impacted by the decision. Secondly consent decision making process is used, meaning that decisions are taken where there are no major objections from the involved parties (we can live with it at worse). This differs from consensus where all parties have to be “for” the decision.
- Trust towards staff instead of control. As again Mr Zobrist said, I believe that “humankind is principally good”. Trust will influence heavily employee happiness.
- Very lean or sometimes removed central functions (e.g. HR, Quality). Those competencies are partly covered within the team.
- No place for a big ego.
The last point regarding ego is actually pretty tricky but essential. I had difficulties to find a good definition for ego. I found two that may help out: “an inflated feeling of pride in your superiority to others”; “your consciousness of your identity”. The first one may fit better in our context. In Teal organizations, the organization or team come first and you have to put your ego aside. This is also the end with special management status with parking slot in front of buildings or huge offices. Actually Laloux emphasized in his book that we are often wearing a mask at work, hiding our “real” personality and we should aim for “wholeness” or be yourself. The environment (society, familiar) affects our behavior, and eventually an oversize ego. But at the end of the day, we should ask ourselves the question: Are we happy? On a personal side, I was once VP of a major IT company with over 3000 persons and status symbol related to it (it is nice to be greeted every morning with a “good morning Mr VP”). My ego was big but once I realized that the culture in this organization, run in a command and control manner by the CEO, did not fit with my profound values, I resigned and lost quite some money through loss of stock options. But at the end of the day, I felt happier. This was the right choice.
There is one common success factor across all those Teal organizations: a visionary CEO or leader who wanted “to change the world” or at least save the company from bankruptcy.
Finally, what is the link between those ideas and our business. Kugler Maag Cie in its study “Software Drives. Automotive E/E Engineering Development 2030” identifies that the market changes that the Automotive (but also other domains) is be facing, will heavily impact the needed organizational models. Therefore, it is worth investigating Teal organization but also exploring some new organizational framework like Holacracy and Sociocracy 3.0. Without going into much details, those two frameworks help organizations evolving towards agility, addressing aspects alike organization structure (e. g. circles, roles), governance processes, how to take decisions, and so on. I personally prefer to Sociocracy 3.0 since the whole community helps it evolving (creative commons free culture license) whereas Holacracy is rather rigid and “closed”, where consultants have to be certified.
So, utopia or path for the future? Opponents are claiming “yet another fade or flavor of the month”. We cannot deny the challenges many industries are facing and the need for change. All improvement paths will be different because the “legacy” is different. Beyond the primary statement “company without managers, bullshit” (by the way no managers do not no management!), we have to understand the basic principles, which I believe, a rationale person, would agree on. There is a lot to learn from those case studies and new frameworks, how to do organize things differently. At the end, the right mindset and lived values across an organization will make the difference.
Author: Christophe Debou, Principal Consultant at KUGLER MAAG CIE
Christophe Debou is a Principal Consultant at Kugler Maag Cie, specializing in process improvement, agile transformation and in General management consulting. Before joining Kugler Maag Cie in 2006, Christophe was Vice President of a leading IT polish company, Comarch. Christophe has over 25 years of experience in the telecommunication and Software engineering world. Christophe has lived in 4 differerent countries and has been doing business and consulting across EMEA, North America and also in Asia.