The book ‘Reinventing Organizations’ of Frederic Laloux is popular among people involved in change. There are also a lot of CEO’s and directors who – whether or not inspired by this book – are longing to make their organisation more human friendly and agile. Laloux describes three breakthroughs within teal organisations that make this possible: self-management, striving for wholeness and evolutionary development.

At Zappos, CEO Tony Hsiesh introduced ‘holacracy’ a couple of years ago: an operating system and method for the new self-directing teal organisation Laloux is talking about. Subsequently Hsieh emailed all his employees that they are going to transform to a teal organisation.

Mixed reactions about Zappos’ transformation

A lot of messages appeared in the media about this change – one of the most interesting ‘business cases’ about transformation. On the one hand you see a lot of critical comments, whereby the authors point at the amount of people who use the generous severance pay at Zappos. The issue that Zappos employees are having a hard time with the new holacracy system and the subsequent new move to teal, is also mentioned. On the other hand, there are more appreciative comments, among others from Zappos employees, who point at the opportunities this new system offers.

The right order of transformation

For everyone who is involved in organisational change it is interesting to see the order that Tony Hsieh has chosen to transform his organisation. First the radical introduction of holacracy – a whole new operating system with new processes and structures – followed by integrating the principles of a teal organisation, which comes down to a cultural transformation.

In our experience and according to our SoftBang Approach that is the wrong order. It is better to first provide the transformation with energy, meaning and involvement, by experiencing the ambition and desired culture together in groups, followed by empowering the employees. Only after that you can change the ‘hard’ side of processes and structures. So start with the ‘soft’ side of transformation, and then activate and structure the business in a new way.

 soft bang approach

If I critically look at the email of Tony Hsieh and his approach to transform Zappos, I see that the ‘collateral damage’ of a lot of people leaving could be the consequence of insufficiently slowing down to provide the collective focus on a teal organisation with energy, meaning and involvement. Furthermore, there are no interventions to make the employees aware of their authentic power and what value they can add. Hence, the employees don’t know whether or not their talent and value system explicitly complement the new ambition and culture of the organisation. Because of this, it is a big risk to lose the wrong people and the ones who are not working from their strength.

Measures to introduce teal successfully

Frederic Laloux makes two remarks to successfully introduce teal in an existing larger organisation:

  1. Arrange enough ‘antibodies’, for example in the form of peer pressure, to prevent that people unfairly or manipulatively profit from the freedom in a no-management organisation. In our experience it means that radical transparency and courageous conversations are needed to accomplish that.
  2. Arrange a good conflict resolution process, by training people to give feedback (or perhaps feedforward is a better term). Non-violent and emotional intelligent communication helps to prevent people from falling back on ‘silence’ or ‘violence’ during stress and emotionally loaded issues. Simply put it means to have the right emotional intelligent conversations at the right moment.

Starting small with the transformation

Being a start-up and smaller organisation, in a way it is easier for us to experiment with new teal organisation forms than Zappos or some of our corporate clients. Therefore we usually advise to start small and introduce the new culture ‘village after village’. We are convinced that the transformation towards a more human friendly and agile organisation can also be implemented in existing larger organisations. Yet, a different approach is needed in order to make the transformation successful, without the collateral damage of undesired departures and people who are not empowered.

Round table meeting 20 October 2016

What is your opinion? If you would like to discuss this topic with other professionals, please feel welcome at our round table meeting in conference centre Woudschoten, Zeist, on Thursday 20 October at 14.00h. Please send me an email if you would like to participate.

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