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Organizational Development has matured hand in hand with the stages of human societal development. Anthropological studies have observed a minimum of 5 clear organizational models in human history.
This development has been described in several ways by different experts. Frederic Laloux, in 2014, started analyzing emerging organizations that were setting themselves apart from the established companies in their style of management.
Philosopher Ken Wilbur’s technique of using colors to describe the non-linear growth of human societies was borrowed by Laloux for convenience to name the sequential stages of management evolution.
The colors red, amber, orange, green, and teal have been used to identify the 5 distinct stages in organizational evolution corresponding to the evolution of human society.
Primary aim of forming the concept of Teal Management was to take advantage of employee talents that complement each other, by consolidating their knowledge and integrating it at all levels.
Teal color is used to classify a category of organizations that shuns hierarchical and Organizational Structures and welcomes modern-day social and employment developments. Teal Organizations are self-managing and perceived as living entities with focus on achieving their complete potential.
Frederic Laloux discovered that the new Teal Management organizational concept had 3 key pillars:
- Evolutionary Purpose
Leaders in the Teal Organization are wary of their own aspirations—to regulate their surroundings, to be successful, to appear clean, or even to achieve good work. Disallowing anxiety, leaders pay attention to the wisdom of other, profounder elements of their selves, cultivating an ethic of shared trust and assumed copiousness.
Let us delve a little deeper into the details of the 3 key pillars.
Teal Organizations do not operate in hierarchies like traditional organizations. They adopt decentralization—which indicates order and clear direction. Teal Organizations function successfully, even at grander levels, with a system established on peer relationships.
Duty for Decision-making is common, as faith is put in employees’ individual and combined intelligence. Structures and practices are put in place where employees have greater independence in their domain, and they are answerable for coordinating with others.
Teal Organizations have an atmosphere where employees are at liberty to completely express themselves. Such atmosphere raises employee devotion, feeling of belonging, proactivity, and creativity, amplifying their ability to the fullest, in the process.
Teal Organizations are persistently adjusting and endeavoring to progress. Endeavor to evolve is through a process of scrutiny, search, and discovery in which all employees take part.
Although none of the Teal Organizations studied have the scale of Orange or Green Organizations yet, still the success they are having suggests that a new era in Organizational Management is taking shape.
Every phase of organizational evolution is more developed and effectual compared to the preceding phase, due to the intrinsic approach towards power.
Teal Organizations have 3 primary advantages compared to any other form of organization:
- Human Factor
- Integrated View of Success
Research indicates that there are only 2 essential stipulations for evolving into a Teal Organization:
- Executive Leadership
Interested in learning more about Teal Management, its primary advantages, and essential stipulations? You can download an editable PowerPoint presentation on Teal Management here on the Flevy documents marketplace.
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Organizational Design (AKA Organizational Re-design) involves the creation of roles, processes, and structures to ensure that the organization's goals can be realized. Organizational Design span across various levels of the organization. It includes:
1. The overall organizational "architecture" (e.g. decentralized vs. centralized model).
2. The design of business areas and business units within a larger organization.
3. The design of departments and other sub-units within a business unit.
4. The design of individual roles.
In the current Digital Age, there is an accelerating pace of strategic change driven by the disruption of industries. As a result, to remain competitive, Organizational Design efforts are becoming more frequent and pervasive—with the majority of organizations having experienced redesign within the past 3 years. This has only been exacerbated by COVID-19.
Frustratingly, only less than a quarter of these Organizational Design efforts are successful. Most organizations lack the best practice know-how to guide them through these Transformations effectively.
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About Mark BridgesMark Bridges is a Senior Director of Strategy at Flevy. Flevy is your go-to resource for best practices in business management, covering management topics from Strategic Planning to Operational Excellence to Digital Transformation (view full list here). Learn how the Fortune 100 and global consulting firms do it. Improve the growth and efficiency of your organization by leveraging Flevy's library of best practice methodologies and templates. Prior to Flevy, Mark worked as an Associate at McKinsey & Co. and holds an MBA from the Booth School of Business at the University of Chicago. You can connect with Mark on LinkedIn here.
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