The Secret Ingredient to Helping Your Company Evolve: 5 Lessons From “Teal” Organizations

Businesses have evolved over the past, and it’s no longer viable to run your business like it’s a factory from the 1890s. As an owner, you already know that, though. Even though this isn’t news, many managers and leaders still have questions:

• How can I transform my company with the least possible risk?
• Will I keep my business afloat if we change too much?
• How can I keep up with the industry changes without compromising stability, functionality, and profitability?

With those questions in mind, today we will go over 5 lessons you can learn from organizations that managed to go through that transformation and still retain their functionality and profitability — teal organizations.

What is a “teal“ organization?

As defined in Frederic Laloux’s Reinventing Organizations, a teal organization is like a living organism that transcends power and control. It allows the employees to self-organize and self-manage. So let’s see what businesses can learn from teal organizations.

The power of purpose is the strongest teal motivator of them all

150 years ago, Nietzsche said that he who has a why can bear almost any how. And we have seen that this adage rings true, time and time again. It doesn’t matter which era you consider; which culture, period, time, or nation — you will find accuracy in this sentence.

From the horrors of Auschwitz to the heroic era of exploring Antarctica, the people with a strong why overcame almost any how.

“He who has a why can bear almost any how.” ~ Nietzche

This also transfers into the business world — the people with the most profound purpose can stay focused on their ‘why’ to push through any:

• Challenge
• Problem
• Obstacle

This works because they know why they’re suffering and are confident it’s worth it.

That’s the power of purpose, and teal organizations took full advantage of that. The employees in the teal organizations know precisely what their organization stands for (and fights for) in the world, so no matter the obstacle, they will keep plowing until they solve the problem.

One thing organizations can genuinely pick up from teal organizations is the moving power of a purpose and how it can positively affect every employee in the workplace.

To have responsibility for a teal organization, you need to give responsibility

Teal organizations soon realized that if you want responsible employees, you need to give them responsibility. However, there’s a process of leveraging responsibility in the workplace.

When your employees know and uphold the values of the company, then you can give them the responsibility and autonomy over making decisions because you know that they will act in a way that will follow those values.

The first thing is to have a value-based decision-making process in place before giving your employees autonomy over matters. With a value-based decision-making process, you will know that all of your employees will act in a way that will uphold the values of the company and that will improve the business instead of being a detriment.

When your employees know and uphold the values of the company, then you can give them the responsibility and autonomy over making decisions because you know that they will act in a way that will follow those values. With this, you won’t have to spend so much time making decisions for your employees. Instead, you will give them the responsibility to make the decisions that are in the company’s values and best interests.

From the outside, teal organizations can appear disorganized since there doesn’t seem to be a solid hierarchical structure in place. However, it all makes sense internally because everyone knows what they should and shouldn’t do.

You will always have conflict; it’s actually about how you resolve it

Companies that start operating in the teal stage don’t simply run out of problems, challenges, and conflicts in the workplace. They handle them differently.

When it comes to teal organizations, most don’t use a simple seniority structure to resolve matters as a manager or CEO would. Instead, they resolve the conflict based on how aligned each side is with the company’s values and vision.

This, in practice, can look different from company to company. One company might bring up a public caucus of all employees and resolve the problem via a voting system. Other companies might appoint a small group that would serve as arbitrary to the cause.

These are just two examples of how teal organizations can handle conflict in the workplace. Still, they are definitely not the only ones.

Self-management requires discipline

To implement teal practices into your organization, you will need individuals who are self-starters and can actively manage themselves. Even though the management style of companies that implement teal practices gives a lot of employees responsibility and autonomy, the employees will still need to be self-starting individuals who can fulfill those expectations.

Teal management practices bring out a lot of autonomy and responsibility from individuals. Companies can have a trial period where they see how people would react when given more independence to see how they would handle operations, objectives, and goals in the workplace. Still, there will be people who simply won’t be able to work in conditions like these, and you shouldn’t push them to do so.

There will be clear processes, and it will be expected the employees will reach their objectives and goals.

It takes time to adjust to a new way of doing things, but in a couple of months, you can see which individuals will thrive in the new environment, and you should focus on them. Again, from the outside perspective, it would look like everybody is doing their own thing. From the inside, though, there will be clear processes, and it will be expected the employees will reach their objectives and goals. That requires both freedom/autonomy and discipline to deliver the results.

There’s no work-life balance, just work-life integrity

Teal practices all start with the ‘power of purpose,’ and they start with that because it’s the best motivation for people. Those that find organizations that believe in the same things they do will find employees that will love and work for the company for life.

So it’s about the convergence of values and purposes of individual employees and the company. With that, the employees won’t have to create a work-life balance because there won’t be a difference between their work and their lives.

They will live out their life’s purpose while doing their job. An individual whose purpose is to ecologically save the earth and who works for a company that has the same goal won’t have to create a work-life balance; they will integrate their life’s purpose with what they do for a living.

Teal organizations recognized this early on, so they started recruiting people with the same values and vision for the company’s future. That way, the company, and its employees are walking the same path toward a shared goal.

Learn from teal organizations and implement their processes

Teal organizations can help us learn quite a bit about the future of organizations. And businesses that pay attention will be at the forefront of innovation in management practices.

Transforming your business is never easy, and before taking any action, you should first collect all the relevant information. That’s why you should read A Healthy Organization: What It Is and How to Have One on our blog to gain more relevant data about how to transform your company.