Just as your process must be flexible and adaptive, so must your organization. In Reinventing Organizations Frederick Laloux works through the history, and arguably a maturity model, for organizational design. The premise, which is overviewed in the diagram below (you can click on it for a high-res version), is that over time we’re seeing organizations evolve from tribal and often violent structures (Red) through more formalized hierarchical structures (Amber/Orange) to agile approaches (Green/Teal). Today the vast majority of organizations, believed to be 80-90%, are somewhere on the Amber through Green scale.
There are several important observations we’d like to make about Laloux’s organizational maturity scale:
- For your organization to support agile it should at least be (mostly) Green, with a participative and values-based culture, or better yet Teal with a truly adaptive and aware strategy (as we’ve been preaching throughout this chapter).
- Your organization will start its improvement journey wherever it currently is on the scale. Laloux’s model provides insights into what your current challenges are likely to be and what potential improvements you should consider making.
- Teams can still be agile within Orange and Amber organizations, but the organization itself will struggle with agility due to cultural impediments.
- It is difficult to jump organizational levels – in other words if your organization is currently Amber then you need to move through Orange, then Green, and finally Teal.
- To move between levels you need the both top-down support from leadership as well as bottom-up support from front-line staff – bottom up, “stealth” improvement efforts will fail on their own when organizational antibodies fight back.
You Want to be At Least Green
Why does your organization need to be at least Green or Teal to become agile? Green organizations support a participative culture style that enables collaboration within and between teams. Green organizations explicitly align people around common values, so injecting any missing agile and lean philosophies often proves to be straightforward. Teal organizations go one step further and bring it all together by explicitly recognizing that they are complex adaptive systems (CASs). This provides an environment where agile teams are able to experiment, learn, collaborate, and most importantly thrive as they find new ways to delight their customers.
Improving Horizontally is Much More Realistic
Laloux himself is very clear about the importance of top-down support if you want to become a Teal organization, or frankly just to move up the hierarchy (say from Red to Amber). In chapter 3 of Reinventing Organizations he states that for an organization to become Teal that it requires the support of both the CEO/founder and the owners of the company. Our experience is that a third factor is required, the support of the front-line staff (and better yet middle management), for your transformation to be successful.
Laloux believes that it’s much easier for organizations to improve horizontally – become the best Orange or Amber organization that you can be. In many ways this is much more conducive to a lean continuous improvement strategy than an “agile transformation” strategy.
Your Organization is Probably a Rainbow
It’s attractive to think that your organizational culture is consistent across the entire enterprise, but it is far more likely that you have teams or divisions with differing color ratings according to Laloux’s model. This is because the culture of a team (or division) is greatly influenced by the leader of that team, and leaders vary in their style, and because teams face unique situations – sometimes a red strategy is the most appropriate given what the team faces. Context counts!