The teal company of the 21st century

A company, especially a large one, is usually associated with an army-like hierarchical structure, where it is clear who gives orders to whom and then controls their execution. Each employee has a specific job description, as well as individually set objectives, the achievement of which determines bonuses, commissions and other benefits, the achievement of which determines bonuses, commissions and rewards. This system, introduced in the 19th century, may have made some sense when illiterate workers stood on production lines, but today it causes an unimaginable waste of human creativity. Unfortunately, its, still quite numerous, proponents seem to overlook the fact that this is how the now widely criticised ‘planned economies’ of the entire Soviet empire functioned. Their legendary inefficiency was primarily due to the fact that man was treated as a tool for carrying out the plans of headquarters.

It is highly puzzling that, despite the widespread consensus on the ineffectiveness of command economies, many managers still regard the Soviet model of management as unassailable, although they certainly do not realise it. Fortunately, something is already beginning to change in this regard. In his book To Work Differently, Frédéric Laloux synthesises a new model of organising teamwork, the birth of which dates back to the mid-twentieth century, but which has only begun to gain momentum in the last two decades. This new model, which the author calls ‘teal’, is characterised by a very high level of effectiveness, thanks to the rejection of most of the seemingly inviolable principles of the corporate order: budgets understood as contracts, bonuses and commissions, hierarchical management structure, giving orders, competition, periodic appraisal interviews, etc. In its place, it introduces principles which, for the most part, are not only a matter of the company’s own making but also of the company’s own making. In its place, it introduces principles that, to the average manager, sound highly implausible, not to say ridiculous and naïve. Let us look at one of them:

When we act with deep integrity and respond positively to the calling we feel within us, the universe does its best to help us.

This is, after all, some utopian phantasmagoria! Can this kind of statement be a guideline for the direction of a company? Can it lie at the heart of any business plan?
It turns out that yes, you just have to know how to read it. Let us divide this statement into three parts and analyse each of them individually.

• When we act with deep integrity – when we act in accordance with our value system, when we feel that we are doing something important and necessary, that we can be proud of;
• and we respond positively to the vocation we feel within us – when we act in conditions that unleash our creativity, when we are given the power to make decisions, when we have a sense of agency and influence over the reality around us and therefore our future;
• the universe does everything to help us – we have a statistical certainty of success, as indicated by both scientific research and everyday business practice.

Could it be that simple? In reality, it is and it isn’t, because the simplicity of these principles does not in any way translate into the simplicity of their implementation.
Transforming a traditional company into a teal one means making a profound civilisational transformation in the company and an emotional transformation in each of us. It requires determination, work and time. It usually takes several years, but the first results can appear much earlier.

In his book, Laloux presents examples of teal organisations, including the global corporation AES, which produces and distributes electricity and employs 40,000 people, the IT company BSO/Origin (10,000 employees), the Dutch organisation of community nurses Buurtzorg (8,000 employees), the American tomato processing company Morning Star (2,400 employees), and the German school ESBZ with 1,500 students and teachers.
I, on the other hand, have managed to discover several Polish examples from January to June 2016 alone. These are two companies from Krakow: LeaNce (kindergartens) and Notjustshop, where children design children’s clothes and their mothers sew them; there is also the IT company Kamsoft Podlasie from Zambrów, the label and packaging manufacturer Marco from Gliwice, the service company Brewa from Kalisz, which installs solar cells, and Mentax, which deals with damage repair. I must admit that since I started talking about teal companies in my public appearances, I have been coming across them more and more often. Very cautiously, I think there are over a thousand of them in Poland.

It is also worth adding that teal companies – despite their unorthodox principles, and to tell the truth, it is thanks to them – are doing much better (including in business) than traditionally managed companies.
Laloux draws attention to the fact that all the companies he described in his book – and I confirm that this is also the case with Polish ‘teal’ companies – have developed very similar operating principles, without knowing about each other, without knowing Laloux’s book and without referring to any common pattern. They arrived at these principles based on the rational assumption that people act most effectively in conditions of freedom, trust, partnership and cooperation.

This is nothing new. We have known this for centuries, but we usually think about it in terms of societies, not companies and organisations. And yet people can be creative anytime, anywhere, as long as we create the conditions for them to do so.
Teal companies turn the traditional order of things upside down, according to which we strive for success in order to ‘buy’ a good life. Since this is our ultimate goal, they say, let’s make it our daily goal.
A good life is the feeling that what we do is important, that it is needed, that it allows us to develop and use and improve our talents. A good life is spent among people we trust, and they trust us in return. Working in organisations that ensure a good life is a pleasure and therefore more efficient, more innovative and with fewer mistakes. And this is what gives these companies an advantage in the market.
To implement such a programme, teal organisations adopt completely new principles of work organisation. Here are the most important ones:

• let’s make it our main goal to change the world for the better, including changing our work environment for the better,
• let’s build on trust, a sense of responsibility and partnership,
• let’s reject competition in favour of cooperation,
• reject so-called ‘incentive systems’ in favour of a sense of satisfaction with what I do and who I am (dignity-based motivation),
• reject management (giving orders and checking that they are carried out) in favour of self-organisation of teams, let specialists make decisions, not managers,
• reject the hierarchical management structure in favour of a networked process structure.

In a teal company, nobody needs to be kept on task, nobody needs to be evaluated, and there is no need to use the carrot and stick approach. And since there is no need to keep on task or use the carrot and stick approach, there is no need for supervisors. Nobody gives orders here and the scope of each employee’s duties can be summarised in one sentence: ‘You do what you can do when you are needed and you take responsibility for your actions.’ As a result, nobody says: ‘That is not part of my job.’
Managers no longer act as supervisors but as thought leaders, mentors in professional and social areas, and moderators of debates.
Teal organisations are like multicellular organisms without a central control system, in which the cells with different functions delegate tasks to each other. This is how nature has organised biological organisms for 500 million years. Today, organisations built by people are beginning to follow this example.
The paths to the teal goal are many and varied, as diverse as the organisations and the people who work in them. However, it is possible to identify a common direction, or perhaps a decalogue, for building a teal organisation:

1. do not look for someone to blame in order to punish them – look for the cause in order to remove it,
2. do not expect perfection, which is impossible to achieve – expect progress, which is always possible,
3. avoid competition, which destroys partnership – create conditions for cooperation,
4. do not judge, because it destroys – appreciate, because it strengthens,
5. do not say what is wrong – say what can be better,
6. Don’t ask people what they could do better. Ask them what is bothering them at work.
7. Don’t rely on control. Build on trust.
8. Don’t say that someone is bad. Tell them how you feel about it (the so-called ‘I-message’).
9. Don’t manage. Create conditions for self-organisation.
10. Don’t be a supervisor. Be a teacher, a moderator and a student.

In teal companies, profit is no longer the goal, but it is still a necessity. In order to provide good work, the company must not only equip the workplaces well, but also offer good pay. It must develop, even if not in terms of size (T. Sedlacek questions this imperative), at least technologically. It must also take care of the development of its employees. And all this costs money.
However, it turns out that where profit ceases to be the goal and becomes a means to an inspiring (this is important!) goal, it is greater than in companies that care primarily about profit. Morning Star has had double-digit growth year on year for 20 years and is now the world’s largest tomato processing company. The younger company Marco from Gliwice achieves a 20% profit rate with a beautiful headquarters, good salaries and many non-wage benefits available to all employees. And it donates 10 percent of its profit to social causes every year.

By observing and meeting more and more teal companies, I am becoming convinced that this is the direction of development not only for the world’s economies, but also for societies. Because if teal organisations win over traditional ones, there will be more and more of them. I encourage entrepreneurs who are starting their businesses today to adopt the teal vision of the world, because creating a teal business from scratch is much easier than transforming a traditional company. By building a teal company, you have the chance to win in the market without giving up the good life today. However, you must be painstakingly honest in this intention. Teal built for show is a sure-fire way to failure.