Reinventing Organizations Summary

What if your workplace wasn’t led by management hierarchies but driven by shared purpose and trust?

1. Evolution of Organizational Structures: From Red to Teal

Human organizations have evolved over centuries, reflecting different stages of societal progress. These stages can be recognized by colors, each representing a dominant style of leadership.

The Red stage originates from primal tribal groups, emphasizing power and dominance. Amber organizations emerged with agriculture, creating rigid hierarchies like those seen in the Catholic Church, which still maintains an unquestioned centralized structure. Orange organizations introduced innovation by embracing flexibility and performance-driven approaches, common in global corporations. Green companies followed, promoting shared culture and flattening rigid hierarchies.

Now comes the Teal stage, characterized by self-managed environments and purpose-driven missions. This stage is not only about efficiency but also creating fulfilling work because employees share decision-making roles. Teal organizations align closely with modern values like adaptability and inclusivity.

Examples

• Red: Ancient clans ruled by fear and dominance.
• Amber: The Catholic Church's rigid hierarchical model.
• Green: Southwest Airlines fostering fun through shared values.

2. Teal Organizations and the End of Bosses

At the core of Teal organizations is a rejection of traditional managerial hierarchies. Decisions are distributed throughout the organization, empowering everyone equally.

Without a single figure of authority giving commands, employees gain the autonomy to solve problems themselves. This decentralized decision-making process energizes workers, making them feel valued and motivated. It reflects a shift in corporate culture where each employee is a leader in their own capacity. Companies embracing this structure often experience greater productivity and happier employees.

The Dutch home nursing company Buurtzorg exemplifies this. Nurses handle their management tasks, from scheduling to patient care priorities. This model eliminates inefficiencies while simultaneously building stronger personal connections with clients.

Examples

• Teal structures remove bosses in favor of transparency.
• Buurtzorg saves 40% of client handling time without diminishing quality.
• Nurses feel more energized and empowered with decision-making autonomy.

3. The Advice Process: A Foundation of Self-Management

Decision-making in Teal organizations operates through an advice process. Instead of seeking approval from superiors, employees consult with colleagues who have expertise or are affected by the matter.

This ensures decisions are well-rounded while keeping the decision-making power in the hands of the proposer. The freedom to act is empowering, and employees become more entrepreneurial, as they can pursue ideas without layers of bureaucracy. It also prevents chaos through a structured yet non-hierarchical framework.

A financial analyst at the power company AES proposed building a power plant in Pakistan. Despite the CEO’s doubts, the worker followed the advice process and spearheaded the project, turning it into a $700 million success.

Examples

• Everyone must consult affected colleagues and experts before acting.
• AES empowered employees to pursue bold projects like the Pakistan plant.
• The advice process fosters fair, participatory decisions.

4. Workplaces that Embrace the Whole Person

Teal organizations focus on creating a workplace where employees feel they can bring their full selves, not just their professional skills. Personal connections and well-being matter as much as productivity.

Allowing employees to bring dogs to work, creating meditation spaces, or hosting reflective meetings are part of this. These practices build community and tap into creativity by letting employees feel at home at work. Such an approach not only improves morale but leads to better innovation and problem-solving.

At SoundsTrue, a Colorado publishing house, employees bring their dogs to work, which sets a calm, collaborative culture. Weekly reflection sessions at Germany’s Heiligenfeld hospital encourage mindfulness and sharing vulnerabilities, strengthening workplace bonds.

Examples

• SoundsTrue allows dogs in offices under a “three poops and you’re out” rule.
• Weekly reflections at Heiligenfeld boost mindfulness and conflict resolution.
• Meditation at desks improves focus and reduces stress.

5. Rethinking Hiring and Onboarding: Promoting Real Fit

TEAL companies have redefined recruitment, emphasizing honesty and alignment with culture. Team members—not HR—interview candidates, ensuring that the choice fits the actual environment.

Zappos offers new hires $3,000 to leave if they feel uncomfortable during their first month. This policy prioritizes workplace harmony and reduces turnover. Thorough onboarding and values training further support new members in navigating their autonomy-driven workplaces.

This thoughtful hiring approach ensures long-term engagement and reduces mismatches while molding applicants into culture-fit employees who resonate with the company’s mission.

Examples

• Zappos’ opt-out bonus encourages mutual honesty.
• Team-driven interviews offer candidates authentic insights into daily work culture.
• CEO-led onboarding at TEAL firms introduces employees to self-management ideals.

6. Purpose Over Profit: Building Value Beyond Money

Teal organizations strive for purpose, not just profit. Instead of endless return-on-investment discussions, these companies pursue missions to improve societies and the environment.

Patagonia’s message, “Don’t Buy This Jacket,” encapsulates this commitment. The company encourages people to resist unnecessary consumption, going further to support long-lasting, repairable products. It builds customer trust, proving that businesses can thrive while being conscious and mission-driven.

Many TEAL companies, like Buurtzorg, also share their practices openly to help industries improve universally.

Examples

• Patagonia markets reduced consumption to reduce waste.
• Buurtzorg shares knowledge openly with competitors.
• Mission-driven practices inspire employee buy-in and long-term loyalty.

7. Adaptive Leadership, Not Commanding CEOs

In the TEAL model, CEOs step back from conventional commanding roles. Instead, they focus on maintaining trust and facilitating flat hierarchies.

By staying grounded, they resist falling into old patterns of control and bureaucracy. They become defenders of collaboration, sometimes convincing teams not to impose restrictions even when faced with setbacks. Leaders act more as facilitators and less as rulers, creating environments with true teamwork.

For example, when RHD discovered malpractices, the CEO stopped employees from adding controls, advocating for ongoing trust over knee-jerk restrictions.

Examples

• TEAL CEOs let teams make independent decisions.
• RHD resisted controls even after employee missteps.
• CEOs lead initiatives by inspiring rather than micromanaging.

8. Adapting Gradually to Change

Adopting TEAL practices is challenging, especially for staff used to strict hierarchies. Introducing these ideas incrementally helps staff acclimatize while testing success.

Slow change may start with meditation breaks or group goal-setting, rather than overhauling every department. By showcasing benefits like improved well-being or productivity, employees more willingly embrace the broader structure.

Approaches like Future Search meetings, where all voices contribute to planning, give people hands-on experience of collaboration.

Examples

• Replace reviews with discussions about passions.
• Gradual substitution of hierarchies lowers resistance.
• Inclusive Future Search discussions inspire transformation.

9. The TEAL Vision of Workplaces Everywhere

Teal organizations champion transparency, purpose, and inclusivity. They reject top-down hierarchies and shift businesses toward sustainable missions that benefit society as a whole.

These organizations aren’t just experiments—they show how stronger and more humane workplaces lead to both personal satisfaction and business success. From Patagonia’s eco-focus to AES’s bold decision-making process, Teal signals the future of work.

Examples

• Patagonia’s environmental advocacy as its core mission.
• Buurtzorg’s knack for decentralized, people-first care.
• Zappos blending autonomy with cultural fitting.

Takeaways

1. Assess if your workplace culture allows employees to bring their full selves to work and make small adjustments to improve that.
2. Explore implementing the advice process for team decision-making to promote accountability and agency.
3. Rethink performance reviews to focus on employee passions and potential contributions beyond strict numbers.