Julyan Davey
Supporting the emergence of life affirming, transformative cultures.

Reinventing Organisations by Frederic Laloux

Reinventing Organisations by Frederic Laloux

Date Read: 28/12/18

My rating: 8/10

(See my list of other books I've read)

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If we are to overcome the big challenges facing humanity, entire new ways of organising are needed to allow us to go beyond our current corporate model. This book spells out what these new modes of organising could be like and gives many case studies of companies and groups already working with them successfully.


Chapter 1.1 Past and Present Organisational Models

How has humanity evolved from the earliest forms of human consciousness to the complex consciousness of modern times?

The developmental view (Ken Wilber / Jenny Wade) suggests that human development advances in stages.

This is backed up by solid evidence from large pools of data. Tested with thousands of people in several cultures, in organisational and cultural settings.

Every transition to a new stage of consciousness has ushered in a whole new era in human history.

Along with it comes a new organisational model.

Reactive (Infrared)

  • small bands of family kinships.
  • the ego is not fully formed.
  • people don’t perceive themselves as entirely distinct from others or the environment.

Magic (Magenta)

  • tribes of up to a few hundred people
  • self is largely differentiated
  • cause and effect are poorly understood so the universe is full of spirits and magic
  • children 3-24 months

Impulsive (Red)

  • First chiefdoms and proto-empires.
  • Ego fully hatched.
  • One is largely unaware of other people’s feelings.
  • Division of labour. Slavery.

Red Organisations

  • can still be found today in the form of street gangs and mafias.
  • glue is continuous exercise of power in interpersonal relationships.
  • Wolf packs provide a good metaphor.
  • Chief must regularly resort to public displays of cruelty and punishment.

Conformist (Amber)

  • Age of agriculture, states and civilisations, bureaucracies and organised religions.
  • Reality is perceived through Newtonian eyes. Cause and effect are understood.
  • Deeper awareness of other people’s feelings and perceptions.
  • Formerly impulsive self is now able to exercise self-discipline and self-control.

Amber Organisations

  • organisations can now plan for medium and long term.
  • can create structures that are stable and can scale.
  • Most government agencies, public schools, religious institutions and the military are run based on Amber principles.

Two Amber Breakthroughs:

  1. Long Term Perspective (stable processes)
  2. Size and Stability (formal hierarchies)

The social mask:

People operating from this stage identify with their roles, with their particular place in the organisation.

Us versus Them:

Social belonging is paramount. You are part of the group or you are not. This dividing line can be found throughout Amber Organisations. nurses vs doctors etc.

Army as the guiding metaphor.

Achievement (Orange)

  • world has inner workings and natural laws that can be investigated and understood.
  • Effectiveness replaces morals as a yardstick for decision-making.
  • The goal in life is to get ahead, to succeed in socially acceptable ways, to best play out the cards we are dealt.
  • One can question authority, group norms and inherited status quo.
  • Opened the floodgates of scientific investigation, innovation and entrepreneurship.

But has a dark side: corporate greed, political short-termism, over leverage, overconsumption and the reckless exploitation of the planet’s resource and ecosystems.

Orange Organisations

Examples are the main brands of our times: Walmart, Nike or Coca-cola.

Breakthrough 1: Innovation

People in orange paradigm can live in the world of possibilities, of what is not yet but could one day be. They can innovate.

Hence amber organisations add r&d, marketing and product management.

Breakthrough 2: Accountability

Command and Control becomes Predict and Control.

Becomes a competitive advantage to tap into the intelligence of many brains in the organisation.

Answer comes in management by objectives. Top management formulates an overall direction and cascades down objectives and milestones to reach the desired outcome.

Births a host of now familiar management processes: strategic planning, key performance indicators, yearly budgeting cycles etc.

Breakthrough 3: Meritocracy

In principle anybody can move up the ladder. Nobody is predestined to stay in his position.

Also largely does away with the symbols of hierarchical stratification.

Machine as the guiding metaphor.

Pluralistic (Green)

  • Highly sensitive to people’s feelings.
  • All perspectives deserve equal respect.
  • Championed the abolition of slavery, women’s liberation, separation of church and state etc.
  • Relationships are valued above outcomes.
  • Prominent in postmodern academic thinking, in nonprofits and among social workers and community activists.

Green Organisations

Breakthrough 1: Empowerment

People in the trenches are trusted to come up with better solutions than experts could devise from far away.

Green leaders should be servant leaders.

Breakthrough 2: Values driven culture and inspirational purpose.

A strong, shared culture is the glue that keeps empowered organisations from falling apart.

Breakthrough 3: Multiple stakeholder perspective

Businesses have a responsibility not only to investors but also to management, employees, customers, suppliers, local communities and society at large.

Family as the guiding metaphor.

Never before in human history have we had people operating from so many different paradigms all living alongside each other.

Chapter 1.2 About stages of development

What triggers a person to open up to a later, more complex stage of consciousness?

  • Comes in the form of a major life challenge that cannot be resolved from the current worldview.
  • When we face such a challenge we can either: grow into a more complex perspective that offers a solution or we can try to ignore the problem.

What determines which stage an organisation operates from?

  • It is the stage at which its leadership tends to look at the world.

Chapter 1.3 Evolutionary Teal

Each shift occurs when we are able to reach a higher vantage point from which we see the world in broader perspective.

Taming the fears of the ego

The shift to Evolutionary-Teal happens when we learn to disidentify from our own ego.

We can learn to minimise our need to control, to look good, to fit in.

What replaces fear?: A capacity to trust the abundance of life.

Inner rightness as compass

When we are fused with our ego we are driven to make decisions by external factors.

Red: what gets me what i want.

Amber: what conforms to social norms

Orange: what leads to success

Green: criteria of belonging and harmony

In Teal we switch from external to internal yardsticks in our decision-making. We are now concerned with the question of inner rightness.

Life as a journey of unfolding

The ultimate goal in life is not to be successful or loved, but to become the truest expression of ourselves, to live into authentic selfhood, to honour our birthright gifts and callings, and be of service to humanity and our world.

We learn to let go and listen to the life that wants to be lived through us.

Building on strengths

Life is not asking us to become anything that isn’t already seeded in us.

Psychologists talk about a shift from a deficit to a strength-based paradigm.

Dealing gracefully with adversity

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.

Wisdom beyond rationality

In Orange, rationality is king and rules unquestioned in the pursuit of the decision that will yield the best outcome.

Orange’s attachment to outcomes often clouds the ability to see reality clearly.

Teal is happy to tap into all the domains of knowing.

There is wisdom to be found in emotions if we learn to inquire into their significance. Why am I angry?

Striving for wholeness

A deep yearning to bring together the ego and the deeper parts of the self. Integrating mind, body and soul. Cultivating both the feminine and masculine parts within. Being whole in relation to others and repairing our broken relationship with life and nature.

Wholeness in relation to others

We can transcend the opposites of judgment and tolerance.

In earlier stages, when we disagree with other people, we often meet them in judgment, believing that we must be right and they must be wrong.

In the name of tolerance, the Green ideal, gloss over our differences and affirm that all truths are equally valid.

Wholeness with life and nature

The more we learn to be true to our unique self, the more it dawns on use that we are just one expression of something larger: an interconnected web of life and consciousness.

Chapter 2.1 Three Breakthroughs and a Metaphor

Orange: organisations as machines.

Green: organisations as families.

A new metaphor: organisations as living systems.

Three Breakthroughs:

1. Self-Management

Teal orgs have found the key to operate effectively even at large scale, with a system based on peer relationships, without the need for hierarchy or consensus.

2. Wholeness

Teal orgs have developed a consistent set of practices that invite us to reclaim our inner wholeness and bring all of who we are to work.

3. Evolutionary Purpose

Teal orgs are seen as having a life and a sense of direction of their own. Members are invited to listen in and understand what the organisations wants to become, what purpose it wants to serve.

Chapter 2.2 Self Management (structures)

The widespread lack of motivation we witness in many organisations is a devastating side effect of the unequal distribution of power.

In Teal Organisations

  • the pyramid structure makes way for teams.
  • typical staff functions are embedded within the teams.

Example of Buurtzorg (dutch neighbourhood care).

  • they use self-managing teams of 10-12 nurses to serve a neighbourhood of patients.
  • there is no leader within the team; important decisions are made collectively.
  • Buurtzoorg teams have no boss.
  • But they also have no middle management. There are no regional managers.
  • Instead, there are regional coaches. Coaches have no hierarchical power. The coach’s role is to let teams make their own choices, even if she believes she knows a better solution.
  • The teams have incredible power to come up with their own solutions.
  • There are only a few ground rules that experiences has shown are important so as to make self-management work in practice.
  • These are things like limiting teams to no more than 12 persons.
  • And that tasks should be widely delegated amongst themselves.
  • Buurtzoorg has a bare minimum staff function. They truly deserve the name support functions. Kicking into action only when teams request their support.

Chapter 2.3 Self Management (processes)

Decision Making: the advice process

If there is no formal hierarchy, how are decisions made?

Almost all teal organisations use an ‘advice process’.

Any person in the organisation can make any decision.

But before doing so, that person must seek advice from all affected parties and people with expertise on the matter.

The person is under no obligation to integrate every piece of advice.

The bigger the decision the wider the net must be cast.

The decision making processes work without consensus.

Problems with consensus:

  • often degenerates into a collective tyranny of the ego.
  • often dilutes responsibility. Nobody feels responsible for final decision.

Internal Communications

In most workplaces valuable information goes to important people first and then trickles down to the less important. Sensitive information is best kept within the confined circle or top management.

In Teal Organisations, there are no unimportant people. Everybody expects to have access to all information at the same time.

Self-Managing organisations use their intranet as a central repository where everybody can publish and retrieve information in real time.

All-hands meetings are another standard practice in many Teal Organisations. They are typically held when there is new and important information to share.

Conflict Resolution

How do self-managing organisations deal with conflict?

Morning Star have conflict resolution process:

  • first they sit together and try to sort it out privately. The initiator has to make a clear request (not a judgement, not a demand) and the other person has to respond clearly to the request.
  • if they can’t find a solution agreeable to both of them, they nominate a colleague they both trust to act as a mediator.
  • if mediation fails, a panel of topic relevant colleagues is convened. It cannot force a decision, but usually carries enough moral weight for matters to come to a conclusion.
  • In an ultimate step Chris Rufer, the founder and president, might be called into the panel, to add to the panel’s moral weight.

Role definition and allocation

Teal organisations have done away with rigid job descriptions and titles.

Instead, every colleague has a number of roles that he has agreed and committed to fulfill.

How are these roles created? In most cases, it happens organically without much fanfare. Someone sense an issue or an opportunity that calls for a new role.

Compensation and incentives

In the absence of bosses, the process to determine who gets to take home how much money must be peer-based.

To decide on people’s salaries, it asks each employee to rank, once a year, the colleagues they have worked with. A simple algorithm crunches through the answers and groups colleagues into a few salary buckets.

In Summary

Misperception 1: There is no structure, no management, no leadership.

  • Instead, power, decision making and leadership are distributed throughout the organisation.

Misperception 2: Everyone is equal.

  • the aim is not to make everyone equal. It is to allow all employees to grow into the strongest, healthiest version of themselves.

Misperception 3: It’s about empowerment

  • Empowerment is baked into the very fabric of teal organisations. They simply have it.

Misperception 4: It’s still experimental

  • Whole foods has 60,000 employees. Wikipedia 100,00 contributions.

Chapter 2.4 Striving For Wholeness (General Practices)

Organisations have always been places where people show up wearing a mask.

You are to behave and show up not as yourself but in certain pre-determined ways.

Often, in practice, this means showing masculine aspects + neglecting feminine.

The emotional, intuitive and spiritual parts of ourselves feel unwelcome.

Organisations fear that if it people were to bring all of themselves into work it would quickly dissolve into a mess.

Teal Orgs create a space that supports us in our journey to wholeness.

The bond between a boss and the subordinates often makes for an unhealthy parent-child relationship. Instead, in Teal, self-management pushes us to behave in adult-adult relationships.

Teal orgs create practices for people to support each other in their inner work while doing the outer work of their organisation.

Creating safe workplaces starts with raising everybody’s awareness of the words and actions that create or undermine a safe working environment.

Many orgs have set up a quiet room somewhere in the office + others have put meditation + yoga practices in place.

Teal Wholeness Practices

  • reflective spaces (meditation + yoga classes)
  • large group reflection - meet ups to talk about issues
  • team supervision - coaches to help teams perform
  • peer coaching
  • individual coaching (+ free counselling sessions)
  • Silence (sounds true a bell rings at 8:30am)
  • Weave storytelling into life of organisations
  • Specific meeting practices (check-ins, silence)

In most organisations, we have too much conflict sparked by the ego + too little sparked by the soul.

Chapter 2.5 Striving For Wholeness (HR Processes)


  • Candidates normally conform to who we thing we ought to be in eyes of employee.
  • Employer too will try to attract candidates by putting on a mask of their own.
  • Candidates attitude is equally if not more important than their skills.
  • The real deal breaker is someone who doesn’t fit in.
  • Zappos $3,000 check if you choose to leave.


  • Training in self-management
  • Wholeness training
  • Listening to evolutionary purpose


  • Employees are in charge of their our training
  • Employees become trainers
  • Employees choose how much they want to work.

Feedback + Performance Management

  • Come to discussions form place of care.
  • We must learn the language of the heart.
  • Speak subjectively.
  • Change the questions.


  • support to turn dismissal into a learning opportunity.

Chapter 2.6 Listening to Evolutionary Purpose

Survival is no longer an objective. The founding purpose is what truly matters.

Purpose is not only a statement on a plaque but an energy that inspires and gives direction.

When an organisation truly lives for its purpose there is no competition.

  • At Buurtzoorg they invite the competition to imitate them.
  • Growth is only an objective in so far as purpose can be manifested on a larger scale.

By focusing on purpose rather than profits. Profits tend to roll in more plentifully.

Decision making by listening to evolutionary purpose.

We don’t tell the organisation what to do we “Listen in”.

Organisations have a calling and an evolutionary energy.

Keeping the purpose oral keeps it alive.

Sensing: gift to notice when something isn’t working or when a new opportunity opens up.

Empty Chair: a practice to allocate an empty chair at every meeting to represent the organisations evolutionary purpose.

When the organisations faces a major inflection point there are a number of more elaborate processes that can help organisations purpose + sense of direction.

  • Theory U
  • Future Search
  • Open Space
  • Appreciative Inquiry

Workable solutions, fast iterations

  • lean manufacturing
  • Agile software development

top down targets -> no targets

Consciously managing the mood of an organisation.

Aim for individual + organisation purposes to resonate with each other. Important to ask these questions during recruitment.

“Do we sense that we are meant to journey together?”

Chapter 2.7 Common Cultural Traits

Organisational Culture: the assumptions, norms and concerns shared by the people of an organisation.

Wilber’s AQAL applied to organisations:

We should look at:

1) people’s mindsets and beliefs

2) people’s behaviour

3) the organisations culture

4) the organisations structures, processes + practices

Shows how deeply the mindset -> culture -> behaviour + systems are interwoven.

How can a group of people consciously bring about that culture?

  • put supporting structures, practices + purpose in place (LR)
  • role modelling from people with moral authority (UR)
  • Invite people to explore + challenge personal beliefs (UL)

Teal breakthrough is to give all four quadrants their due - culture, systems, mindsets and behaviour.

Orange focused on hard at expense of soft. And green vice versa.

Chapter 3.1 Necessary Conditions

What are the necessary conditions for creating a new teal organisation?

1) Top Leadership: founder must have integrated a worldview consistent with the Teal developmental level.

2) Ownership: owners must also understand and embrace Teal.

Difficult to bring Teal practices into subsets of organisations. Especially if leadership aren’t on board.

Vertical transformation (orange to green) is a lot harder.

Horizontal transformation (i.e. unhealthy orange to healthy orange) is possible.

Tasks for CEOs

1) Role Modelling Self-Management

  • Giving up ability to totally direct ship.
  • Giving up feeling of being the only hero.

2) Role Modelling Wholeness

  • To invite colleagues into wholeness they need to act from wholeness themselves.
  • Vulnerability + strength are not in opposition but reinforce each other.

3) Role modelling listening to purpose

  • Ask questions. Every decision is time to ask: “What servers our organisations purpose”
  • The Living Organisation by Normal Wolfe

New Legal Frameworks

B-Corps: new company format that explicitly include a social and environmental purpose.

Holocracy constitution: shareholders have say in matters of finance but prevents them from unilaterally imposing a strategy.

Could it be that in a Teal society, we would no longer think in terms of ownership, but in terms of stewardship?

Chapter 3.2 Starting up a Teal Organisation

Experience shows it is a lot easier to start out from Teal than transform an existing structure.

Start by listening for what you sense is called for.

Explore the assumptions of both orange + teal.

Three required practices

1) The advice process

2) A conflict resolution mechanism

3) Peer-based evaluation and salary processes

Four Related to Wholeness

1) Ground rules for safe space (captured in a document)

2) Liven up the office or factory building (help people think this place is special)

3) Onbording Process (how to get people working in a teal way?)

4) Meeting Practices (how to listen to prevent typical meeting syndromes?)

Two related to Purpose

1) Recruitment (does purpose resonate with recruits)

2) Empty Chair Meeting Practice

Chapter 3.3 Transforming an Existing Organisation

Most senior and middle managers as well as people in staff functions will view the transition to self-management as a threat.

Do you initiate self-management all in one go or progressively?


1) Create chaos (ditch top down -> leads to chaos -> hope self-management steps in)

2) Bottom-up redesign (invite everyone to design the organisations future)

3) Pre-existing template (have a switch day when organisations changes)

Chapter 3.4 Results

In the past, every shift to a new organisational model brought a quantum leap in organisational performance.

Before Teal: Extrinsic Motivators (money, profit etc) drive people.

In Teal: people switch to Intrinsic Motivators


10 employees (2006) -> 7,000 (mid 2013)

These companies are highly profitable despite the fact they seem to be, from an Orange Perspective at least, quite careless about profit.

Chapter 3.5 Teal Organisations and Teal Society

We need zero-growth, closed-loop economies.

A planet with limited resources cannot host unlimited growth - kenneth boulding

We will run out of silver in 12, zinc in 15 and nickel in 30 years.

A future Teal Organisation will have to assume that society will have to operate near the ideal of a closed-loop economy with zero-waste, zero-toxicity and 100 percent recycling.

Alternative Consumerism

Teal Societies might have zero or even negative GDP growth but be much richer emotionally, relationally and spiritually.

Rebirthing of existing industries

Intensive agriculture -> advanced organic farming practices

Education factory-like batch processes -> learners co-create his or her unique education.

Alternative Monetary Systems

Our current interest-bearing form of money needs continuous growth in order to sustain value (why?)

Money could bear no interest. Or it’s interest could be negative.

Feel safe not because we have stored away wealth but because we trust in a solid tapestry of communal relations.


A factory might have exclusive rights to the use of a machine as long as it puts it to good use. This right comes with the duty to maintain the machine and ensure it gets transferred to someone who will use it if they stop needing it.

The end of work as we know it

Society could be entering a new phase - one in which fewer and fewer workers are needed to produce, distribute all the goods and services consumed.

Evolutionary Democracy

  • crowdsourcing technology applied to both the executive and legislative branches of government and at all levels of power.
  • we might look for ways to listen in to what the world is calling for.

Spiritual re-enchantment

Collapse or gradual transition?

Collapse by Jared Diamond

“Systems often hold longer than we think, but they end up by collapsing much faster than we imagine”

Two areas where Teal could evolve:

1) Shareholdership

Organisations might have stewardship-holders instead of today’s shareholders.

They might contribute excess money that they currently don’t need to a purpose dear to their hearts.

No automatic dividends but rather an understanding that when that person hits a rough patch, the organisation would do what it can to support than individual.

2) Purpose + the porous organisation

Today full time employment is the standard contractual relationship.

This is very inflexible but gives both the employer and the employee a sense of safety + control.

The security of full time employment becomes less important than pursuing what is really meaningful. Teal orgs can accommodate this flexibility much more easily.

Like a flock of birds people from different organisations could join forces temporarily and disband again later.

“The best way to predict the future is to create it” - Drucker

Wheatley + Kellner- Rogers

“If we can be in the world in the fullness of our humanity, what are capable of?”