8 ∎ Getting Results

Beyond Organizational Survival

Let’s jump to the other end of the Traditional (Jenga) and Evolutionary (Tree) Maps to look at Results. Most organizations want higher performance and some level of business agility. The patterns in this chapter provide a stark outline to illustrate the key dimensions in which traditional organizations differ from evolutionary ones.

If your organization is functioning anything like a traditional business, then you are getting a fraction of the possible levels of performance. Survival is optional, and most organizations are not set up to thrive. This chapter serves as an invitation to examine how your organization stacks up against human potential.

PATTERN 8.1: FROM “WE ARE OK” TO THRIVING IN A COMPLEX WORLD

WE ARE OK

If your organizational performance is OK, then chances are that your organization will not survive. It’s just a question of time.

ORGA NIZATIONAL LIFESPAN IS DECREASING

The average company lifespan is decreasing. The average lifespan of companies listed on the S&P 500 Index is going down. Companies are increasingly going out of business, while the rate of change itself is increasing.

IT’S A VUCA WORLD

VUCA has been used to describe the landscape and volatility of the business for the past twenty years. VUCA is a term coined by the U.S. Military in the 1990s to characterize the world:

• Volatility—There is a high rate of change.

• Uncertainty—There is a high level of uncertainty of what is happening right now and of the future.

• Complexity—Situations are so complex it is a challenge to respond effectively.

• Ambiguity—Decisions often have to be made in the face of incomplete or conflicting information.

Consider how each term applies to the global business environment organizations face. What is interesting is the internal landscape of an organization. The trap most fall into is that they delude themselves into thinking that VUCA does not exist, including within the internal environment of the organization. They create structures and processes that pretend the world is stable, certain, analyzable, and clear. The trap continues within teams, departments, and the structures of culture, hierarchy, and competition among peers. This puts employees and the whole of the organization at a disadvantage, since they are no longer able to acknowledge the reality of the situation—employees need to be skilled at working though all aspects of VUCA.

ORGAN IZATION SURVIVAL IS OPTIONAL

“Survival is optional, no one has to change” is a famous quote by W. Edwards Deming, speaking to organizational survival. Organizations need to evolve in order to survive. Some will. Some won’t. Hence, the survival of any one particular organization is optional. Companies that are unable to or repeatedly choose not to invest in developing a new way of working are going extinct. It is important that your organization is set up to thrive and able to compete against certain large global organizations or the latest innovative start-up that has energetic and passionate people.

THRIVING IN A COMPLEX WORLD

Evolutionary organizations have developed a high level of capability. They are able to evolve and adapt in the face of the complexity of the changing world.

EMBRACE VUCA

Embracing a VUCA world is like learning to surf the waves instead of trying to make them go away. High-performance organizations not only recognize the nature of what is happening, they design their organization to respond to what is happening now and are able to respond quickly to the unknown future—not some notion of what should happen.

For example, there are many companies who have embraced VUCA by moving to adaptive planning, distributed flexible budgeting, and transparency to support rapid adaptation. The beyond budgeting movement came from the realization that annual plans and annual budgets simply did not make sense in a VUCA world (Hope and Fraser 2003).

ORGAN IZATION SURVIVAL IS BASED ON ORGA NIZATIONAL EVOLUTION

Evolutionary organizations are in a constant state of evolution. Products and services are evolved to meet new needs. Ways of working are improved. People develop, grow, and are inspired to innovate. Organizational survival is a side effect of the ongoing evolution of the organization and its people.

MODEL: NAVIGATE COMPLEXITY TO SURVIVE

Volatility, ambiguity, and uncertainty can be understood as dimensions of complexity. So the key question is:

Where is your organization in its ability to embrace and thrive with complexity?

Figure 8.1 shows the relationship between an organization’s ability to navigate complexity and its survival rate. As the ability to work with complexity increases, so does survival rate. It is not, however, a linear scale. There is a tipping point or threshold where an organization begins to materially work with the complexity or reality of the situation.

PATTERN 8.2: FROM TRADITIONAL MANAGEMENT TO KNOWLEDGE WORKERS

TRADITIONAL MANAGEMENT

Most organizations in the world operate based on the principles of scientific management created by Frederick Winslow Taylor in the late 1800s. The principles’ main objective is to increase the economic efficiency of organizations by optimizing worker productivity levels (Taylor 1911). What we see in the business world today—modern management— is largely based on Taylor’s principles created in the context of industrial labor, primarily steelwork.

The underlying assumption of scientific management is that workers have no brains and need to be managed. When we hold the belief that workers have no brains, we create organizational systems that can function with workers that do not have brains.

Figure 8.2 illustrates the key structures created to support scientific management. Each structure is designed on the assumption that workers have no brain. Each structure is designed to compensate for and mitigate the perceived lack in the workers. Consider your current work environment as you review each component of our modern organizational systems.

Let’s walk through this diagram and model step by step:

1. The manager has a brain. Success depends on the manager.

2. Workers have no brains. They are lazy, unmotivated, dumb brutes who merely perform standardized work that is given to them.

3. To overcome the lack of brains in the workers, the manager will:

a. Create processes and procedures that define standardized work.

b. Measure the quantity of standardized work produced.

c. Create plans to direct and organize the workers so they know what standardized work to do when.

d. Motivate the workers with a carrot and stick.

Each structure radiates the underlying assumption to workers: you have no brain. From morning until evening, workers are constantly exposed to a work environment that at the deepest levels reminds them again and again that they have no brains.

What we have experienced from a metaphysical perspective, is that your thoughts create reality. The underlying assumption of workers is like background radioactive waste—you can’t directly see it, and it will make you ill when you are exposed to it. This model of management is a key contributing factor to worldwide levels of stress, illness, depression, and disengagement.

KNOWLEDGE WORKER

The knowledge worker paradigm presents a system of work that is a stark alternative to modern management. The term was first coined in 1959 by Peter Drucker in The Landmarks of Tomorrow. He suggested, “The most valuable asset of a 21st-century institution, whether business or non-business, will be its knowledge workers and their productivity” (Drucker 2009).

Although the term was originally intended for white-collar workers, it is clear that it applies equally to most job categories. For example, the Toyota production system places manufacturing line workers at the heart of their innovation and improvement efforts.

The underlying assumption with the knowledge worker model is that workers have brains. Figure 8.3 illustrates the knowledge worker model:

1. All workers have brains.

2. Workers’ brains are assets or sum up the value of an organization.

3. Workers learn and teach each other to develop their capabilities.

4. Workers want to come to work.

5. Workers autonomously manage the work.

6. Innovation is a natural side effect and intrinsic to doing the work.

The knowledge worker model is not intended to be literally taken as a blueprint for creating an organizational system but rather to highlight key principles that support and are helpful for capturing the full ability of workers to contribute.

PRINCIPLE: BELIEVE IN PEOPLE

Management beliefs about workers and the ensuing organizational choices lead to a self-fulfilling prophecy.

“A self-fulfilling prophecy is the socio psychological phenomenon of someone ‘predicting’ or expecting something, and this ‘prediction’ or expectation coming true simply because the person believes it will and the person’s resulting behaviors aligning to fulfill the belief” (Wikipedia 2021b).

Once we believe workers need to be managed, the structures created will shape people. Over time, people who are independent and responsible become unmotivated and disengaged. Each time someone is told what to do, every meaningless report, every uninformed leadership decision, all support the notion that people’s intelligence and experience doesn’t really matter.

What if beliefs about workers were different? What if management believed in people’s independence and creativity?

Imagine what your workplace would be like if everyone believed in the intelligence and capability of workers. If every moment was seen as an opportunity to celebrate people’s capabilities and help them evolve further. Imagine if the leaders see their role as creating an environment for greatness to happen rather than telling people what to do.

PATTERN 8.3: FROM BUSINESS AS USUAL TO HIGH-PERFORMANCE ORGANIZATIONS

BUSINESS AS USUAL

Organizations that operate like “business as usual” are at the lowest levels of organizational performance. They frequently match many of the antipatterns shared here: denial, “we are OK,” modern management, low engagement, ignoring culture, and so on.

Organizations may avoid recognizing this reality by benchmarking themselves against similar types of organizations. Although these issues are widely recognized as the number-one challenges facing organizations today, there is little or no material progress (Deloitte 2019).

HIGH-PERFORMANCE ORGANIZATIONS

There are many ways to define performance and many ways to realize it. As such, there is no single way to define what constitutes a high-performance organization.

We define a high-performance organization as one that substantially outperforms its peers with market and customer outcomes and is sustainable over time.

The scope and focus of this book is on the patterns that are:

1. Common to many high performance organizations

2. Possible to replicate

HIGH PERFORMANCE IS POSSIBLE FOR YOU

There are also people with unique abilities, such as Steve Jobs or Elon Musk, who provide the genius to create great success. There are also companies at just the right time and just the right place with the perfect product. These are great examples of high performance. However, they are typically not sustainable over time.

An even greater barrier is that they are not replicable! It is pretty much impossible for most of us to execute or become a visionary like Steve Jobs, but it is possible for anyone to apply the patterns in this book to become more effective.

REINVENTING ORGANIZATIONS

In Reinventing Organizations: A Guide to Creating Organizations Inspired by the Next Stage of Human Consciousness (2014), Frederic Laloux examines 10 organizations with breakthrough performance.

He presents a simplified version of spiral dynamics focused on organizational systems demonstrating the historical path of evolution of increasingly high-performance work systems. The focus of the book is on the organizational structures needed to support a high-performance (Teal) way of working that reflects the last stage of human development.

The original model Laloux uses is from spiral dynamics and can be described as the “theory of everything” that speaks to the evolution of human beings. It speaks about higher levels of consciousness affecting functioning (high performance) as a reflection of individual and collective behavior (Beck and Cowan 2005).

REINVENTING ORGANIZATIONS — AN ADAPTATION

The SELF Evolutionary Culture Model is a model that speaks to the essence of the high performance of an evolutionary organization. We modified and extended the work of Frederic Laloux to offer a deeper understanding of the evolutionary path of organizational performance.

Model: The SELF Evolutionary Culture Model

The SELF Evolutionary Culture Model is illustrated in figure 8.4.

As the consciousness of an organization evolves to more effective cultures, the levels of organizational performance follow. This gives an organization the ability to navigate complexity and realize business agility.

We might understand these as stages of evolution of how we as human beings have organized ourselves over the course of history. Each stage contains innovations for how we may organize ourselves to create higher and higher levels of performance.

Centralized Power and Structure (Red)

Red cultures are focused on the effective use of power and structures to govern an organization well. A command-and-control structure emerges from a clearly defined hierarchy so that everyone has a clear role and level of authority. The establishment of stable processes allows top leadership to control the function of the organization.

A good historical example is the Roman Empire, which was able to scale across large distances and time delays using these key innovations.

Note: We have collapsed the Red and Amber from the Laloux stages of evolution to make a clearer model to improve diagnosis and application.

Achievement (Orange) = Machine

Orange is about traditional business or modern management. Orange organizations focus on achievement—bigger and better. Product innovation is key: How do we improve our products? What projects do we need to increase efficiency? With Orange, leaders create plans and hold people accountable for results. As leaders begin to share power with workers, the performance and economic results improve.

Since the focus is on results, a meritocracy is formed based on who actually delivers. The organizational metaphor is that of a machine—-people see the organization as a mechanical system to be fixed and changed. Orange has been present as a way of working for perhaps one hundred years with the advent of the modern organization. Examples include almost all large organizations that follow traditional management values and practices.

More Advanced Cultures Include Earlier Innovations

Note that each culture stage includes elements of the earlier cultures where they serve the organization. For example, organizations that operate from an Orange worldview or paradigm, will include many Red approaches, such as formal roles, hierarchy, and so on.

We are considering an evolution where every point on the journey will embrace the elements of each culture system. As one reflects on this model, there can be a vision of a global template where each culture system builds on the next like a Russian doll, one inside the other. The key difference is that the culture systems will be adapted to reflect the shift in consciousness to a more evolved way of working.

People (Green) = Family

With Green, the focus shifts to create a healthy environment for the people working in the organization. Green organizations have family as a guiding metaphor. A clear organizational purpose is used to create alignment around goals so that workers can be empowered to make decisions. There are explicit shared values that guide behavior and decision making with leaders who walk the talk.

In a Green organization, the hierarchy will be shifted to the background so that it doesn’t get in the way of people working together to find solutions. Example organizations include Southwest Airlines, Zappos, and Ben & Jerry’s.

Shared Power (Teal) = Adult

Our adapted metaphor for Teal is defined as that of an adult (rather than an organism). People who act like adults take responsibility for their own behaviors and are capable of self-management. As such, this high level of maturity provides a unique ability to shape an organization where it has the illusion of no structures, yet the organization is firmly held and embraces all cultures at the same time.

Under these conditions it is possible for an organization to function with shared power and distributed decision making. Of course, acting like a full adult requires a shift in consciousness where the ego no longer has a tight grip on people’s behaviors.

In our adapted model for Teal, the key characteristic is that there is shared power in organizations. When there is shared power, there can be a decentralized network for decision making so that the organization can respond rapidly to the needs of a VUCA world. A key consequence of this way of working is that there will be an emergent, cocreated response to running the organization. No one person is in charge, so the future will emerge.

Using the Model

The SELF Evolutionary Culture Model can be used to sense what elements of each stage are present in an organization. In science, a mass spectrometer is used to sense what atomic elements are present in a test sample. In a similar vein, the culture model can be used to sense how much Red/Orange/Green/Teal is in an organization.

It’s very rare for an organization to just be at a single stage of evolution. Reality is much more complex and messy.

Transcending Culture Stages

It is important to understand that each successive culture stage encompasses earlier stages, so that innovations from earlier stages may be present in organizations that operate primarily at a later stage. It may be the case that an innovation is used from a different consciousness in later stages. Hierarchy is one example of this, but it could apply to any innovation.

A challenge with human beings is not to “throw out the baby with the bathwater.” When presented with this model, there is often a tendency to want to move away from Red and Orange. This is a trap. What is more helpful is to use whatever innovation will serve the organizational purpose. For example, is it helpful to have a stable process for payroll? The answer is usually yes, as this will support people’s psychological safety.

High-performance organizations at later stages use the innovations with a different consciousness in a way that supports organizational functioning. There is nothing inherently unhelpful about hierarchy or authority. Overreliance and low-consciousness uses of these innovations are what contribute to low performance.

Hierarchy is a naturally forming construct within living things, including human beings. We find hierarchy in nature—it is how and what we do with hierarchy that can create low-performance organizations.

THE JOURNEY TO EVOLUTIONARY ORGANIZATIONS

Many advocates of change advocate abolishing the hierarchy in favor of a flat organizational system. They assume—in our view, mistakenly— that the hierarchy is the root of the problem.

Hierarchy Is Not the Problem

Although many Teal organizations have dissolved the hierarchy in favor of autonomous teams or groups, some key examples of this way of functioning continue to have a hierarchy. In fact, the largest case study from Laloux’s book Reinventing Organizations (2014)— AES— had a hierarchy. So do many other Teal-like case studies, such as Semco and David Marquet’s Turn the Ship Around (2012).

Although it can be helpful to change structures such as hierarchy to support a shift in ways of working and being, it is not strictly required. The key requirement seems to be that any negative impact of misuse of power due to hierarchy is overcome.

The final element of Teal is that of wholeness. This speaks to welcoming the whole person (mind, body, heart, and spirit) to work, so the organization can benefit from all the capabilities of the people. In some cases this may also speak to using the faculties of stillness and intuition to sense beyond the logical mind.

Principle: Organizational Performance Follows Consciousness

The performance of an organization is a reflection of the level of consciousness. The model shared here illustrates an understanding of the shift in consciousness toward more advanced stages of functioning. As power is increasingly shared, the focus is on creating an environment where people can contribute to their fullest potential. It’s not just about changing structures and processes, it’s about a shift in the mindset or consciousness of the people in the organization.

In Mastering Leadership (2015), Anderson and Adams reach similar conclusions to Laloux from the perspective of leadership development—a shift in consciousness is required to reach higher levels of organizational performance. They argue that “consciousness must evolve to a high level of complexity to meet the complexity of today’s business challenges” (38). The model they present—egocentric, reactive, creative, integral—can be roughly mapped to the stages of the modified Laloux culture model.

On close inspection, other culture models such as the Competing Values Framework point to the exact same conclusion: “The highest performing leaders have developed capabilities and skills in each of the four quadrants” (Cameron and Quinn 2011, 54). High performance comes from transcending and integrating these culture quadrants—this is essentially what Teal culture represents.

It’s about the People

The key factor in organizational performance is the evolution of the people. As people evolve and are able to operate at a higher level of consciousness, the organizational results will follow. A simple rule that captures the essence of the model is:

From an organizational perspective, a very simple pattern for high performance emerges: if you treat people well, they will perform better. Although the concept is simple, the challenge is that much regressive conditioning in the behaviors of leaders negatively impact employee experiences. On top of that, business as usual is so different from high-performance cultures that this simple pattern is anything but obvious.

Principle: Business as Usual = Low Performance

Anything that resembles business as usual or traditional organizations is low performance. In the whole scale of organizational systems, those resembling normal businesses represent the lowest levels of performance. It is only more people-oriented environments that are able to reach the highest levels of performance.

High Performance Is a Nonlinear Journey

Sometimes people mistakenly interpret the stages as belonging to a sequence: I am at Red, first I go to Orange, then I go to Green. However, it is not linear. There is no sequence. We can see that the development or evolution of organizational culture is a journey.

As the consciousness of the people in the organization evolves, so will the organizational performance. As the organizational environment improves and people in the organization begin to fully show up as responsible adults (Teal), then the organization will be able to benefit from sharing of power to create higher levels of performance. This is a journey.

Green and Teal are rough approximations of reality to orient to one’s journey. Every high-performance organization is unique, so there is no target. There is no “let’s go Teal.” Instead, what we invite is a shared desire to invest in evolving the organizational culture to one where engaged and motivated workers produce amazing results.

Myths of High-Performance Organizations

There are a lot of myths around what is required for high performance. These are often touted by futurists as the solution. As we are looking at a highly complex problem, it should be clear at the outset that there is no one solution.

Here are some items that are not required to create high performance:

• Elimination of hierarchy to create a flat structure or network

• Explicit core values

• Shared ownership with employees

• A specific salary and payment structure

• A specific kind of organizational metaphor, ideology, or framework such as Holacracy, S3, and so on

While some of these elements may be helpful at the right time in a specific context, their treatment as universal solutions is hazardous. In contrast to a universal solution, SELF gives you the building blocks needed to unlock your organization based on your unique context.