A turquoise startup (teal company) – introduction (Part 1)

This is the first entry of the series of posts about a turquoise startup (or generally speaking about a turquoise company).

If you don’t know what a startup is, read my post on this subject

Whoever goes out ahead and takes the risk of new challenges will probably meet with resistance or will be called naive, a dreamer, or a fool. – Frederic Laloux, “Reinventing Organizations”

Thinking about a startup, or more generally – about any innovative company, we think mainly about what interesting this company offers on  the market, what it can surprise us with. I would never think that I could be surprised by the way the company works inside. I have seen automated car factories, stuffed with new technologies. I have heard a lot about the unique work culture in the biggest IT companies like Google or Microsoft.  I know  stories about  the  way  Chinese factories work, they practically become their employees whole life. I know from experience the system of work in a typical micro- and medium-sized enterprise.

It seemed  that nothing more can surprise me on this subject. However, when I heard about the  turquoise company, I felt that it was a real revolution in management. Although it seems to lead to total chaos, I wanted to propose this way of doing business  in my own company.

I have read about the  turquoise company in the book titled  „Reinventing Organizations” by Frederic Laloux. Turquoise is one of the  types of company organization which has emerged relatively recently, over the  last  dozen years or so. The rest of the entry will be all about it.  The other types of organizations have  also been given  colours :

  • Red – they are characterized by  constant ruling by the chief in order to keep reins on  „soldiers” . The  fear is a binder, which prevents people from leaving the organization. They use absolute violence and submission to their will. The chief is surrounded by family members and buys their allegiance. They focus mainly on short-term goals. They can be powerful but they have an inner weakness –  the boss has to  show  his strength regularly e.g. by public executions, as it is the only way to stop the organization from decaying.  The  examples of such organizations  are mafia or street gangs.
  • Amber – they have formalized functions in the hierarchy. The most important value is stability which is guaranteed by rigorous processes. Thinking is dominated by concern for the right  look, behaviour and thoughts in order to adjust to the environment. The Amber organizations try to exercise control by institutions and bureaucracy. In comparison with red organizations, they can plan on a mid- and long term basis. Looking at it  in the historical context, amber organizations have built The Great Wall of China or the pyramids. Each person can be replaced by another person and thanks to that the companies can exist for ages.  The changes are treated  suspiciously. The examples are the army and public schools.
  • Orange – their  goal is to defeat the competition and maximize profit and growth. The key measure of effective actions is efficiency – to  produce faster,  to come out better comparing to  others, to  earn more. They live in the world of possibilities. They create  research and development sections, marketing sections, and product management sections. They preserve the pyramid as the basic  structure of the organization’s functioning  – directors and executives show the direction and assign tasks to the next  levels. At the same time they introduce extra project groups, virtual teams, interdisciplinary initiatives, positions of experts and advisors all that  in order to stimulate communication and support innovations. They introduce elements which motivate employees to achieve goals. They appreciate merits and skills. Everybody can climb up the ladder and nobody is doomed to permanent employment  on one position for the whole life. At the same time, the organization is treated as a machine. People are resources, much is  said  about efficiency and effectiveness, tightening the screw, exploring  difficulties,  scalability of solutions, information flow, and bottlenecks. A typical example of orange organizations are corporations.
  • Green – such organizations are very sensitive to human feelings. According to their rules, all perspectives deserve equal respect. They seek justice, equality, harmony, community, teamwork and agreement. Interpersonal relations are more important than performance. Leadership is treated like service. The metaphor for green organization is „family”. Green organizations are able to overthrow old structures, but  they aren’t so effective when it comes to forming  practical alternatives. In the 18th and 19th centuries groups of people with green awareness started supporting slavery abolition,  thought for women’s liberation, popularized  democracy. The examples of  the companies working this way today are Southwest Airlines and Ben & Jerry’s.

This division doesn’t really mean that certain organizations or people working in them are better than  others. This comparison was made in order to show different ways of dealing with the surrounding world. They are different – just like a two-year-old is different from a fifteen-year-old. Although it wasn’t written here, each of these  organizations has its pros and cons. Every one of them is adjusted  to certain  specified contexts. For example, during civil war, red organizations would have better chances of activating self-defense, but during peaceful times they wouldn’t be  so useful.

Moreover, organizations usually have different attributes from the types  listed above. We seldom see e.g. entirely amber or orange organization . It is similar  with turquoise organizations – from all of  the attributes listed below, only some can be used and they can be completed with other organizations’ attributes.

And what is the turquoise organization marked with? A lot can be said about it but for the purpose of this entry I will only show a few basic assumptions. They will be extended in next entries.

At the beginning I will  focus on the structure and organizational issues not going into  motivation and the  reasons for such assumptions. The  list itself can appear surprising – I hope that it will be an  encouragement to  read next entries.

Turquoise organization:

  • everybody in the company has high decision-making power
  • and because of that – there’s no hierarchy or subordinates,
  • there also aren’t any formal departments or sections,
  • all information in the company is open for the employees, including the company’s income and the salary of each  person,
  • there are no permanent positions in the company, there are duties which people assign to themselves dynamically depending on the company’s needs,
  • there is no formal job description,
  • everyone can come forward with a proposal  for changes, including the fact that  everybody can come forward with a suggestion of employing a new person or entering a new market
  • Decision  making does not require  the majority of votes or  consensus, if  nobody  vetoes your idea you can realize it taking the responsibility for it. Difference of opinions doesn’t mean that you cannot realize the idea, it is only the opportunity to explore the topic
  • before making a decision, however,  the  person has to consult the  idea  with  people – these are usually people who have a huge knowledge of a particular field (the choice of those people is up to the person concerned),
  • The functioning of the company is based on complete trust in the employees – control usually does not even exist (do not mix “control” with “monitoring progress”).

Is this a formula for a complete disaster and chaos? Frederic Laloux has found a few organizations in  the world which operate according to this paradigm. Among them there is a company from energy sector which plays an enormously important role in  today’s world which is – supplying  energy – and it employs 40 000 people! There is also a non-profit organization operating  in the health service with 7000 employees. There is also  a school with 1500 students, teachers, and parents. There is a company from  food industry which employs 2400 people in  the season, and 400 off-season. There is a non-profit organization taking care of distribution of recordings, books, courses, music –  with 90 employees. There are trade, service and production organizations operating  all over the world and in different cultures. They don’t disappear. In many cases they even boast of  their extraordinary accomplishments.

These ideas are also implemented in Expansio group. Currently there are 8 people involved in our work employed on different terms, starting from employment contracts, through self-employment, to contracts of work and order contracts. I hope that I won’t  be eventually called „naïve , a dreamer, or a fool”.

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