Reinventing Organisations … Frédéric Laloux’s transformation from corporate hierarchies to living organisms
October 23, 2019
When rising complexity pushes corporate hierarchies to their limits, the only meaningful response is a paradigm shift, argues business thinker Frédéric Laloux.
Author of the best-selling book “Reinventing Organizations” Laloux advocates a people-centric approach with radically streamlined structures that facilitate active involvement and self-management.
Laloux’s book considered by many to be the most influential management book of this decade. It has inspired hundreds, probably thousands, of organizations throughout the world to take a radical leap and adopt a whole different set of management principles and practices.
But how does it really work?
Here he explains why the future belongs to self-managing organisations, and describes what he means by ‘wholeness’ and ‘evolutionary purpose’ – and why they represent important breakthroughs:
The way we manage organisations seems increasingly out of date. Survey after survey shows that the vast majority of employees are disengaged at work, while organisational leaders complain that their organisations are too slow, siloed and bureaucratic for today’s world.
In this excerpt Laloux discusses the historical evolution of management thinking, and shares how extraordinary pioneering organisations in very different sectors are already operating from the next stage of management:
Reinventing Organizations tried to answer the question: is it possible to run organizations in a whole new way? I now know the answer to be an emphatic “Yes!”
Since then, a new question emerged: So how do we do it? How do we reinvent an existing organization in such fundamental ways?
Here is a collation of graphic interpretations of Reinventing Organisations seeking to capture the key ideas of the “Teal” organisation, self managing with an evolutionary purpose, described by Laloux:
This becomes more structured as an evolutionary journey, or maybe that should be revolutionary. Most organisations are still stuck in their orange phase or perhaps into the green phase, rather than seeking the opportunities of teal:
These then take the form of diagram used in the book with examples of organisations at each different phase. Examples of teal organisations include Patagonia, Morning Star and Buurtzorg:
Describing the differences between each type in more detail
This map brings together many of the ideas in Reinventing Organisations and overlays 20 attributes/practices discussed in the book on top of Wilber’s four quadrants and demonstrates how they manifest differently in each type of organization (colour).
Q&A with Frédéric Laloux
Q: Reinventing Organizations came out a few years ago. Can you share, from your perspective, what has happened since?
What’s happened with and around the book has been really astounding. There are so many ways to respond to this question that I’m not sure where to start. Perhaps the most essential answer is this: I believe the book has shifted the conversation, in many circles, from the frustration with all that is broken in management to a conversation of possibility. I think that’s the biggest contribution of the book overall — for many people, the question is no longer how can we fix this or that issue we have in our organization? Instead the question becomes wow, could we adopt this whole new way to structure and run our organization?
Because of this sense of possibility, there are suddenly hundreds and hundreds, probably thousands and thousands, of organizations out there that are making the leap! They take a radical departure from the kind of management that is taught in business schools and adopt the new perspective outlined in the book, plus all the daily practices that sustain this shift.
Q: What kind of organizations are making the shift?
Well, really, every kind of organization!
I’ve heard from a number of manufacturing businesses that have flourished with these new practices. Same thing with a number of retailers. There are tech start-ups. Nonprofits. Hospitals. Schools. Retreat centers. There are truck drivers who self-manage, cleaning companies that adopt these practices, Buurtzorg-like companies popping up in many places. You name it. In the last few months, I’ve also suddenly heard from a number of municipalities and local government agencies.
What’s been most surprising to me is that a handful of CEOs of very large organizations (tens of thousands of employees, multinational or global) are really getting the ideas of the book and are inviting their organizations to move in this direction. That’s really hopeful to me! Of course, reinventing such large organizations takes more time, but the first signs are very promising. Unfortunately, many of them — especially the publicly listed ones — aren’t ready to talk about it openly yet. It seems like the ideas of the book are still beyond what Wall Street is able to comprehend or accept at this moment in time. Private companies and nonprofits are free to transform much more openly, it seems.
Q: What kind of shifts do these organizations do? And how does it unfold?
I haven’t done any systematic research, so what I’ll share is mostly anecdotal, based on conversations I’ve had and emails I’ve received. What people mention most often, probably because it is the most striking change, are the steps they are taking towards self-management. In some cases, especially, of course, in smaller organizations, it’s going surprisingly smoothly. And as is often the case with self-management, the results can be stellar. Colleagues blossom, profitability and productivity go through the roof. So much of the BS, the power games, the useless meetings simply disappear.
In larger organizations, this takes more time. What you see there are pockets that go really fast and achieve great results, but they also experience frictions with the rest of the organization. Larger organizations are still in the middle of their transformation; I’m not aware of one where we could say that they’ve made the shift.
It’s been interesting to me to hear how these journeys unfold. Often it’s joyful, but at times it’s also confusing or even painful. What these organizations are attempting is not to update one particular management practice, but to change the very foundation of their management. And that requires a different perspective, a different worldview. Some people are instantly turned on, but for others the organizational transformation implies a real, deep journey of personal reassessment and growth.
Q: Many people talk about Reinventing Organizations as a movement. Do you think about it in those terms too — a movement? Or could it turn out to be a fad?
I’ve also heard many people refer to it as a movement. I guess it’s appropriate in the sense that all sorts of things are happening in many different places, and that none of it is planned or directed. There are all these organizations that are shifting. There are also lots of people getting together in meet-ups around the world, from Sydney to Berlin to Oregon to discuss the book and its implications. There have been people everywhere who have stepped up to make a translation happen, to create a news hub around it …
When we speak about a movement, we can think narrowly around Reinventing Organizations. But I like to look at it more broadly. Much is brewing in the field! There is everything happening around agile; there are communities forming around Conscious Capitalism, uLab, ResponsiveOrg, Holacracy, Sociocracy; in France there is a movement of entreprises libérées. … There is something in the air that Reinventing Organizations is both a part of and hopefully a catalyst for.
Now, is it a movement, or a just a flicker of hope that will not last? Ricardo Semler, who wrote this massive bestseller called Maverick twenty-five years ago, asked me a similar question: There has been hope before. Why would it work this time? His question reminded me of a book called The Age of Heretics that chronicles many previous experiences with forms of self-management in the twentieth century. Every time, the results were so spectacular that some people thought: this is it, this is the beginning of a revolution. And then not much happened.
The philosopher Richard Tarnas talks about the “cultural womb” that needs to be ready for new thoughts to flourish. I believe that this time, the cultural womb is finally ready. When Semler published his book, millions bought it and thousands came to visit his company, Semco, for inspiration. And yet to his frustration, people went home and nothing happened. Almost no one adopted his practices.
For some reason, right now, there are suddenly hundreds, probably thousands, of organizations making a bold leap. I believe there is no going back. Of course, some of these transformations will stall or fail, but many more will lead to wonderful results. What makes me hopeful is that the leaders who start this journey with their organizations don’t do it because it is sexy or because they hope it will make their organizations more agile, innovative, or successful. They do it for a simpler and more profound reason: they no longer want to run their organizations in a traditional way. They do this out of an inner imperative and would find it very hard to go back.
Q: How did the book reach so many people?
I still wonder about that too (laugh)! It’s been a bit of a miracle, frankly. From the very beginning of the project, when I was just starting the research for the book, I had the intuition that I needed to self-publish it. My wife and I had published another book with a respected editor in France, so I knew the drill. But I just sensed that in the case of Reinventing Organizations, I needed to self-publish it. Everyone told me that it was a stupid idea. There is still a stigma attached to self-publishing. And how would people ever find out about the book?
I didn’t have an answer to that question. I had no following on social media — I mean, I’m still not on Twitter and barely on Facebook. I had no marketing plan, and I’m not a good self-promoter. But I had this strong intuition that I should not waste time looking for an editor. And I wanted the absolute freedom to do things my way. By that time, I had learned to trust my intuitions, as foolish as they might sometimes seem.
Q: So how did the book get noticed?
When the book was almost ready, I printed out a copy of the manuscript and sent it to Ken Wilber, a philosopher I respect and whose ideas have influenced my way of looking at things. I didn’t have an introduction to Ken, but I found his mailing address and sent him the manuscript. I didn’t really expect to hear from him, and so I was totally surprised when just a week later I received a long email from him, telling me how much he loved the book. Would I want a foreword from him? (Sure!) And would I want to record a conversation with him about the book? (Yes!)
The conversation that was scheduled for an hour turned into five hours. Just at the time the book was launched, Wilber sent out an email to his fifty thousand newsletter recipients to tell them about the conversation and the book.
One thing that self-publishing allowed me to do was to offer the e-book version in pay-what-feels-right mode. I believe in the potential and the beauty of the gift economy and so I wanted to experiment with it. People can download the book for free, as long as they commit to offer, after they’ve read the book, whatever amount they feel is right.
Out of the fifty thousand newsletter recipients, a few hundred downloaded the book in that way. Some of them read it and really liked it, and that started the word-of-mouth phenomenon that has propelled the book ever since.
By now, the book has sold close to 350,000 copies, if you count the English version and the many translations, and it keeps going strong. I’ve heard people say it has become the most influential management book of the decade, and as grand as the claim seems to be, I think they might well be right.
I’ve been told that this story is a total outlier in the publishing industry. The book was launched with zero marketing and no PR. It didn’t get a single review by any major newspaper or magazine (and pretty much still hasn’t). The book really owes a lot to this initial newsletter, and to all the readers. I’m immensely grateful to Wilber and all the readers who’ve turned it into a success, one conversation at a time with their friends and colleagues.
And I’m grateful too, of course, to all the people who made the translations happen. The book has now been translated into almost twenty languages, and there are five more in the works. In a few cases, like for the German edition, a local publisher approached me for a translation, as it normally happens. But for most languages, it was readers who spontaneously reached out and asked if they could make a translation happen. They just wanted the translation to exist and didn’t want to wait for a publisher to show up.
It started with a person in Ukraine who offered to pay for a Russian translation and then went out of his way to find an editor in Russia. Then two people in Chile financed a Spanish translation. In Italy, a handful of people came together to translate the book. In China, it was more than forty people who self-organized to crowd-translate the book and find a publisher. In Brazil, the number was even larger, and a whole community participated in a crowdfunding campaign. The Arabic edition that’s about to come out was translated by two Syrian refugees who also pursued publishers until they found one in Lebanon who will print and distribute the book. This work, they felt, was their way to offer a perspective and hope for a region that is undergoing so much suffering right now. I don’t know if you can imagine how much work goes into translating a four-hundred-page book. The generosity of these people is just extraordinary. I’m highlighting these stories, but there are so many more I could mention.
Q: What makes the book resonate so deeply with people?
One reason certainly has to do with the amount of unspoken pain there is in organizations. In emails they send me, readers share this again and again: after reading the book, they no longer feel so crazy or alone. So many executives are exhausted by playing a game they no longer believe in. So many doctors, nurses, teachers, and administrators are hanging in there by a thread. They continue going through the motions even though what is asked of them makes no sense and sometimes feels offensive.
But because no one talks about this, many people end up believing something is wrong with them. It seems to be a huge relief to realize that it’s not them who are crazy, but the current system that has been pushed beyond its limits. Many readers shared with me that they shed tears while reading, which I guess is not a typical reaction to a management book (laughs). There is a real sense of validation and recognition — “I wasn’t crazy to think that we could do things differently.” That there are organizations out there operating in this way, readers intuited, and with spectacular success, seems to bring both relief and tremendous optimism.
Another aspect that resonates with people is that the book operates at two levels: on the one hand, it offers a broad, historical perspective, and at the same time, it details very concrete management practices. The overall perspective provides a context to understand this historical shift that we are witnessing. And the concrete practices make it tangible, real. “Oh, so this is how these organizations make decisions, how they deal with conflicts, how they deal with salaries. I get it, I can picture it, it’s not rocket science, we could try that.”
Q: OK, you look like you are itching to add something more. 🙂
Yes, there is one thing that is essential to the book and that I’m quite proud about, and yet no one seems to have noticed. And I’m ready to give away! It has to do with how the book is structured. As you know, the book revolves around twelve organizations whose practices I researched. Books based on case studies tend to be structured, invariably, in this way: every chapter simply tells the story of one organization, in a journalistic fashion, and at the end you’ve read a collection of case stories.
I knew this wouldn’t do for this book. People would just read a collection of inspiring stories, but it wouldn’t add up to a detailed understanding of this new model that is emerging.
The other way to structure the book would be along the management practices. It would look like this:
– Decision making. Here is how organization A does it. Here is how organization B does it. Then C, D, E, and so on.
– Meetings: Here is how organization A does it. Here is how organization B does it. Then C, D, E, and so on.
– And so forth for every practice.
This would give a good understanding of the model, but, boy, would it be tedious to read! There is no storytelling arc in that structure.
What I’m quite proud about, even though nobody seems to have noticed, at least consciously (laughs), is that I cracked something that combines the best of both worlds. The overall structure aligns with management practices, but I’ve manage to construct it in a way where I start telling the story with just one organization (Buurtzorg), and over time I bring in all the others one by one. So as a reader, you are immersed in the storytelling, even though I walk, quite methodically, through one management practice after the other. That structure is real clockwork, and in some way, the fact that no one noticed is a great compliment.
With the illustrated version, there is also something no one seems to have noticed: Etienne (the illustrator) and I invented a format that to my knowledge hasn’t been tried before. It’s not simply a summary of the book with a few illustrations thrown in. Nor did we go for a comic book format, which would have been another obvious choice. We decided we’d use a fundamental principle: to use text when text is most powerful, and images when images are most powerful. As a result, the book constantly flows from one format to another — from text with illustrations to full-page mural, to a short comic book sequence, to text with icons… And it works really well, so well that readers are drawn in by the content and never seem to realize just how much the format of what they read is constantly changing.
Q: What lead you to write this book?
I’ve answered that question in a previous interview, so I’ll just paste the link here.
Q: How has the success of the book impacted you? What has changed for you since the book came out?
Oh, there are many layers to this. From one perspective, my life hasn’t changed much at all. A few years before the book came out, I understood, at some deep level, that I’m meant to live a pretty simple life centered around my family, and that making a career or being successful wasn’t very important to me. I’ve never been a very ambitious person, in the sense of “making it big.” So I continue living a simple life, spending lots of time with my two young children, surrounded by nature and community in this wonderful ecovillage I moved to.
At a deeper level, Reinventing Organizations has been a blessing. Truth be told, there have been long stretches where I’ve felt overwhelmed with the email overload and the never-ending requests for my time. But mostly, it’s been a wonderful privilege to see a piece of work I’ve done resonate so much with so many people. I’ve also met many wonderful people through the book. I feel I’ve met more beautiful people in the last four years than in the previous forty years of my life. And then, over time, one by one, every one of the persons and institutions I admire most in the world have written to me saying “I read your book and would love to meet you”. And I think “wait, you want to meet me?”. 🙂 I have this immense sense of gratitude: what an amazing life I’ve been given to live!
At an even deeper level, I believe the book’s reception has given me a certain sense of inner peace, of self-confidence, of fundamental okay-ness. For years, I’ve felt a very subtle tension: I’m not ambitious by temperament, and yet there was often this sense that there was some energy in me that wasn’t properly used, something I could contribute but I didn’t know how or what it would be. This work reaching so many people has resolved that tension — it’s as if I feel I’ve done my thing, I’ve done my contribution, now it’s up to others to run with it. I don’t know if this is resolved forever; perhaps this tension will come back at some point, when Reinventing Organizations becomes a thing of the past. We’ll see, but for now there is a real sense of peace.
I’ve also learned to say “no” in a graceful way. For me, that was a big thing to learn. But quickly, I had no choice because I got so many requests for talks or consulting that I had to learn. There is a part of me now that feels really centered, that can stand up for my needs and say “no” without apologizing, in a simple and compassionate way. It’s a powerful feeling.
Q: Why are you giving so few talks?
Because I accept almost no talks or interviews, some people have come to believe that I must be some kind of recluse who doesn’t like to be in public (laugh), when really I have a blast being on stage or meeting people. And of course, the less I’m out there, the bigger the interest. When I was scheduled to give a talk in Paris, the nine hundred rather expensive seats sold out in just over a day. And for a talk later in Brussels, all five hundred seats were snapped up in just four hours. I felt like a rock star (laugh)!
That brings up a memory. One time in Berlin, when I got on stage, people in the audience erupted in a spontaneous applause, which was nice but kind of weird, as I hadn’t said a word yet. It triggered an idea for me, so I asked the audience if they would help me live out a teenage fantasy of being a rock star playing to a huge, imaginary crowd. So I grabbed the microphone with two hands, took a pose, and shouted, “How are you, Berliiiiiiiin?” and people pretended to go wild! That was my rock star moment (laugh).
I enjoyed it, and the crowd enjoyed it too, because it was fun and lighthearted. We tend to take recognition and celebrity so seriously, and certainly in the field of management the culture is one where we quickly put on a mask of expertise that turns out to be a very serious mask indeed. It’s been fun for me to play with this, to really make sure I don’t let myself be anybody else, on stage or when I meet readers, than the guy I am with friends or neighbors. It often happens when I meet readers, who sometimes traveled from far away, that they are all impressed in the beginning. I love it when five or ten minutes later, they seem to have completely forgotten to be impressed because we are engrossed in a conversation and it all feels simple and joyful.
When the book came out, our daughter was just six months old. My wife, Helene, and I have often joked about the fact that when some readers were picturing me as this important expert and guru, I was actually changing my daughter’s nappies. There is nothing like a smelly nappy to keep you firmly rooted in reality (laugh).
I’m often wondering about this element in our culture that takes maximization as a given. If you make a certain amount of money, you should try to make more. If you have a certain success, you shoot for more. When do we say: enough, that’s all I need? Many people who have two children stop there — they don’t aim for six, or ten. Six children won’t make them happier. Why would it be different with money or success?
But because the culture of maximization is so strong, I notice that most people naturally assume that I’d be giving talks all the time, that I’d have created a brand around the book and a consulting firm to cash in on the book’s success.
I guess I’m lucky that I don’t have a temperament that seeks recognition at all costs. In some paradoxical way, the fact that I haven’t tried to cash in might well be something that has helped the book achieve the success it has. I don’t know how many emails I have received where people wrote something like, “Thank you for the book, and for who you are.” I’m always puzzled by this, I feel like responding, “But we’ve never met; you don’t know who I am!” What I think resonates with people is not really me, but a sense that here is an everyday person resisting this lure of mindless maximization. If I don’t do the rat race, perhaps they don’t need to do it either.
I know it’s one of the things I’ve admired for a long time in Parker Palmer, an activist and author who has been influential for me. His books have touched millions of lives, orders of magnitude more than Reinventing Organizations, and one of the things that has drawn me to him is that through his writing, I sense so much wisdom and authenticity. With all the success he has, he has no agent, no assistant, and he deals with all he’s let loose from his home in Wisconsin. He grapples, like us all, with the basic questions of life, of meaning, of aging, of the messiness of the world, and speaks very openly about it. As much as I try, it’s hard for me to see in him the successful author, because he’s refused to wear that mask. I’m thankful that Parker offers me this image of how I too can resist the lure of maximization.
It’s a strange thing, though, this sense I have that I’m not meant to travel, to be much out there in the world. When I’m on stage, or when I talk with a leader of an organization starting a heroic journey, I absolutely love it. I feel fully alive, more so than in my simple, everyday life. I also know that there are things I care about that could unfold more quickly if I said “yes” to certain requests, or if I were to put energy in some projects linked to Reinventing Organizations. Sometimes it feels like a shame I don’t do more. Or at times, I don’t feel very generous, saying “no” so often.
But every time I pause to listen within, the answer is always the same: I’m meant to say no, and to continue to lead a life focused on my children and family and be very mindful of where I put my energy. I’ve learned to accept this answer. I could have great fun out there. And some things would clearly unfold more quickly with my participation. At the same time, the world is going to be perfectly fine however much or little I contribute (laughs).
Q: So with or without you, what do you feel is coming up?
In many ways, I believe this is all just the beginning. The book came out not so long ago in China and Japan. The word of mouth in China is going strong, and the sales in Japan have gone absolutely through the roof. It’s a part of the world I know little, but apparently the message resonates there too.
The book has been really successful in the US, but not yet at the pervasive level it has attained in some countries in Europe. I think it’s going to be interesting to see how things unfold. I guess the narrative here that business is and should be only about shareholders and profit is particularly strong, and I’d love it if Reinventing Organizations could participate in shifting that story.
Shifting the narrative is one thing I’m thinking about regularly. Right now, as broken as it may be, the dominant perspective about management is still the one that business schools teach, that you read about in the Harvard Business Review. Everyone senses it’s no longer working, everyone is frantically proposing fixes to motivate people, to become faster and more responsive, to squeeze the last bit of efficiency out of the system. But somehow the basic story is not yet being questioned. There is this whole space where Reinventing Organizations has turned into a big thing, but it’s still largely underground. It’s not yet been picked up by any of the major media outlets or the major business schools.
What I believe is important, at this juncture, is a multiplication of stories about organizations that are dropping the old management system and boldly going for next-stage practices. The first time people read the story of one such organization, a place that has no managers, where people can be themselves, where results are spectacular not from painful effort but from sailing with the wind, it’s easy to dismiss this as some fluke. When you read a second and a third story like this, with some effort, you can still dismiss it. By the fifth or sixth time, you start to notice. But with the tenth or twentieth, this becomes just another reality. At some point down the line, I believe things will flip. I can picture a day where people say, “Oh, so you’re still working in an organization with managers and all that?” That’s the long game we are in. With that perspective, all that has happened, as amazing as it is, is really just the beginning.
On a personal level, you might have heard about the new project I just launched. It’s a video series called Insights for the Journey. I haven’t done any formal consulting since the book came out, but I’ve had really interesting conversations every once in a while with leaders who have gone on a journey to reinvent their organizations.
Across these conversations, I found a number of patterns emerging: things that work and things that don’t, typical pitfalls many organizations discover, things we are called to unlearn and relearn. … At some point, I found my notebook full of insights I felt like sharing.
Just to be clear, the video series is not a rehash of the content of the book. In the book, I tried to answer the question: Is it possible to run organizations in a whole new way? I now know the answer to be an emphatic “Yes!” Since then, a new question has emerged: So how do we do it? How do we reinvent an existing organization in such fundamental ways? That’s a whole new field of inquiry that’s opening up, in which we are all still very much learning. The video series is my way of sharing emerging answers, in the hope that it will entice other people to share their emerging insights too.
So that’s clearly a big topic coming up: capturing what we learn about how existing organizations can reinvent themselves, to help make such journeys be just a bit easier and more joyful. We don’t all need to reinvent the wheel! In the space of Reinventing Organizations, that’s going to be my focus for this year. It’s turning into be a real body of work, comparable to Reinventing Organizations in its scope. (Here is the link again: thejourney.reinventingorganizations.com)