How to Build an Evolved Organization

What does it mean to have an evolved organization? You have an evolved organization when you’re reaching a higher level of sophistication, structure, and purpose by building on the strengths of prior levels.

Why do organizations struggle? Often, because we try to reach higher, yet kick away the ladder we’re standing on.

Chris takes over as head of an old-school, traditional church. They are proud of their traditions and history. But the congregation is shrinking and money is tighter and tighter. Chris brings in innovative new ideas and tries to get the leadership to operate as a meritocracy and embrace accountability. There’s an explosion of initiatives and new work committees, and a rush of enthusiasm.

Everybody is trying to embrace the new way, yet the result is chaos. The Sunday program isn’t printed one week, and is full of errors the next. Nobody knows who is supposed to make the bank deposit. Mistakes keep happening, and Chris is forced out within a year. What happened?

Randy takes over the family business, which is proud of its competitive position and history of steady profits. But the family knows they aren’t really delighting customers or engaging employees. Randy tries to introduce employee empowerment, and a new culture of delighting customers.

Morale goes up, but profits inexplicably erode, and accountability seems to vanish. Staff begin complaining about endless meetings and the eternal search for consensus. Top performers start to leave. Two years later, the business is stagnant and struggling, and Randy is baffled. The family is considering replacing Randy.

Your organization may be struggling for the same reasons Chris’s and Randy’s are. We struggle when forget the ancestral lessons all organizations are built upon. We struggle when we forget the lessons of our forebears.

What are those lessons?

Levels of Organizational Evolution

As laid out by Frederic Laloux and others, humans organizations are evolving into their fifth level of development.

The first, oldest level (called “Impulsive-Red”) came with the invention of command authority and the division of labor. These can respond rapidly to a chaotic environment.

The second level (“Conformist-Amber”) came with the invention of formal roles, repeatable processes, and a long-term perspective.

The third level (“Achievement-Orange”) came with the adoption of innovation, accountability, and meritocracy.

The fourth level (“Pluralistic-Green”) came with the adoption of empowerment, servant leadership, culture over strategy, and balancing the interests of all stakeholders.

The nascent fifth level (“Teal”) is coming as organizations adopt self-management, wholeness, and an evolutionary purpose.

This video provides an overview, from the perspective of a software organization:

Lean and Agile Adoption with the Laloux Culture Model from Agile For All on Vimeo.

Shadows of Each Level

Each level has its shadow side. Every human strength has a corresponding shadow or weakness, and the same is true of organizations’s strengths. It is exactly these shadow aspects that spur us to evolve to a new level.

Fearful Red

Impulsive-Red organizations are based on raw power and fear — these are street gangs and the Mafia. Their shadow is obvious: constant fear and instability, and no ability to plan for the future. Reds are ego-centric — hence “impulsive.”

Trapped in Amber

reinventing-organizations-circles

Evolutionary Levels of an Organization (Frederic Laloux)

Conformist-Amber organizations are based on hierarchy, stability and control — many public schools, government agencies and traditional churches qualify. They offer safety, order and structure against the fear and chaos of Red. Ambers are ethno-centric or group-centered — hence “conformist.”

Amber’s shadow side is rigidity and a repression of individuality, and can include tribalism, racism or group loyalty that distrusts outsiders. (Think of police departments and their “blue wall of silence.”) Roles are fixed. For promotion, individual merit is ignored in favor of things like credentials, box-ticking, or years of service. Social inequality is codified in caste systems — managers have different parking, office space, even food than those they manage. Everyone must wear a social mask, behaving the way someone in their role is expected to behave.

Clockwork Orange

Orange organizations are focused on competition, profit, and management by objectives — many large multinational corporations qualify as Orange. Far more innovative and merit-based than Amber, Orange too has its shadow: materialism, greed, lack of true meaning or purpose, disregard for emotion, and over-consumption. Orange claims to be world-centric, but it’s a shallow, materialist, “success” and “achievement” based, hyper-rationalistic view of the world.

Stifling Green

Green organizations stress empowerment, servant leadership, the meaningfulness of work, having an inspiring purpose and mission, respecting feelings and the needs of all stakeholders, and the achievement of consensus.

Green’s shadow includes a repudiation of the strengths of Orange, and a willingness to seek consensus at all costs. Green tends to be distrustful of power and can try to wish it away, causing power to become politics. Those who grow sick of endless consensus-seeking begin to act on their own or craft back-room deals to ensure something actually gets done.

Unknown Teal

I don’t doubt Teal has its shadow too. I’m just not sure what it is. Some suggest that Teal may require too much of each person, including holding peers accountable, with no boss to back you up. We may need to see more Teal organizations before we can say what Teal’s shadow is, and what it needs to evolve into.

Don’t Fear the Shadow

laloux-nesting-doll-orange-green-tealWe dislike the shadow side of our current level. That’s the whole reason we want to evolve. As we evolve our organization to a higher level, we’re tempted to repudiate the level we are leaving. And so we get tempted to repudiate not just the shadow of that level, but its strengths as well.

Instead of building on the level below, we kick it aside, only to find our new level teetering dangerously.

Laloux’s advice is instead to remember that each level includes all levels below, like a Russian nesting doll. In this illustration, Orange elements exist inside Green elements, Inside teal. Not shown are the Amber and Red elements inside Orange.

Where Chris and Randy went wrong

Chris was asked to help a struggling old school traditional church. Chris’s mistake might look like one of politics, or of trying to make too many changes too quickly, or of not getting people on board.

In this instance, the real problem was Chris’s team was too committed to a new Orange way of being — innovative, merit-based — and in throwing out the bathwater of Amber rigidity, they also threw out the baby of defined roles and repeatable processes.

When a church can’t print the Sunday program correctly, and nobody knows who’s supposed to make the bank deposit, they lack roles and processes.

I see this routinely in businesses of all types. We get excited about innovation or empowerment or self-managing teams, and neglect the foundation stones of discipline, clarity, order, and structure.

Innovation is not the opposite of having a documented process. Innovation requires a documented process. Otherwise the innovation will vanish in a month, when attention wanders or people move on.

Randy was given the reins of the family business, and tried to move rapidly into the Green world of worker empowerment, a values-driven culture, and an inspirational purpose. That’s all good.

But Randy and the rest of the leadership team neglected to hold on to what was good about Orange: innovation, accountability, and meritocracy. The fact is, not every decision should be made by consensus (which gives each person a veto over all things). Not everyone’s opinion should be solicited on every topic.

When nobody is accountable, and top performers leave, your organization has lost track of its Orange strengths. To make it to the next level, we must build upon prior strengths, not abandon them.

What Evolutionary Strengths Have You Lost?

See this table to identify what you most need to reclaim from your evolutionary heritage.

Color Breakthrough Symptom of Loss or Lack
Red Command Authority Nobody in charge; nobody steps up; or nobody obeys
Red Division of Labor Everybody does everything; no specialization or efficiency
Amber Formal Roles Not clear who is responsible for what
Amber Repeatable Processes Common mistakes keep recurring; reinventing the wheel; success not repeatable
Orange Innovation Lack of new thinking; problems aren’t solved
Orange Accountability Balls get dropped; expectations are unclear; culture of not saying “no” but behaving “no” anyway
Orange Meritocracy Promotion and recognition not connected to results or contribution
Green Empowerment People wait for the boss to tell them what to do
Green Egalitarian Management Top-down, command-and-control
Green Stakeholder Model Over-focus on shareholders; key stakeholders are ignored and unhappy: staff, suppliers, customers, or the community

 

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