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Green Organizations

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Green organizations reflect the Green stage of consciousness[1], which strives for harmony, tolerance and equality. While retaining a pyramidal structure, Green organizations focus on empowerment to lift motivation and to create great workplaces. They go beyond the shareholder focus of Orange to embrace all stakeholders. Family is the dominant metaphor.

Green stage of consciousness

Green is aware of Orange’s shadow: materialism, social inequality, and the loss of community. Green is sensitive to people’s feelings: all perspectives deserve respect. It seeks community, cooperation, and consensus. Individuals strive to belong—to foster harmonious bonds with everyone.

In industrialized countries, in the late 18th and 19th centuries, a small circle operating from Green championed the abolition of slavery, women’s liberation and democracy. Ken Wilber puts it this way:

With the shift to reason and worldcentric morality, we see the rise of the modern liberation movements…what is fair and right and just for all humans, regardless of race, sex, or creed.

…In a mere hundred-year period..,from 1788 to 1888, slavery was outlawed…from every rational-industrial society. In (earlier paradigms) slavery is perfectly acceptable, because equal dignity and worth are not extended to all humans, but merely to those of your tribe.

For almost identical reasons, we would see the rise of feminism and the women’s movement on a culture-wide scale…Democracy, too, was radically novel… Let us remember that in the Greek “democracies,” one out of three people were slaves, and women and children virtually so.[2]

So, In the late 18th and 19th centuries, a small elite profoundly shaped Western thinking. In the 20th century, the numbers grew. While Orange is predominant today in business and politics, Green is very present in academic thinking, nonprofits, social work and community activity.

From this perspective, relationships are valued above outcomes. Rather than make decisions from top-down, Green favours collaborative, bottom-up processes, and trying to bring opposing points of view to consensus. Orange glorifies decisiveness. Green requires leaders to be in service of those they lead. This stance is noble, generous, and empathic. In light of continuing inequality and discrimination, there must be more to life than the self-centered pursuit of career and success.

Yet this stage has its contradictions. It tries to treat all perspectives equally and gets stuck when others abuse its tolerance to intolerant ideas. Red egocentricity, Amber certainty, and Orange see this as Green idealism. Green’s relationship to rules is ambiguous: on the one hand, rules are arbitrary and unfair, but doing away with them proves impractical. Green is powerful as a paradigm for breaking down old structures, but often less effective at formulating practical alternatives.

Breakthroughs and characteristics of Green organizations

Green is uneasy with power and hierarchy. If it means that those at the top rule over those at the bottom, then let’s abolish hierarchy. Let’s give everybody the same power. Let workers own the company in equal shares and make decisions by consensus.

Some have tried to create a future along these lines; like the cooperative movement in the late 19th and early 20th centuries; or in the communes in the 1960s. In hindsight, these extreme forms of egalitarianism proved not to be successful, on scale and over time.[3] Gaining consensus in large groups is inherently difficult.

Yet Green has come up with its own organizational model, via three breakthroughs. Some of the most celebrated and successful companies of recent times―Starbucks, Southwest Airlines, Ben & Jerry’s, The Container Store, to name a few—run on Green practices and culture.

Green breakthrough 1: Empowerment

Green Organizations retain the meritocratic hierarchical structure of Orange, but push as many decisions as possible down to frontline workers. They can make far-reaching decisions without management approval.

They are directly in touch with the many, smaller, day-to-day problems. They are trusted to devise better solutions than experts from far away. Ground teams at Southwest Airlines, for example, are empowered to seek creative solutions to passenger problems: their colleagues at most other airlines must follow the rule book.

Making decentralization and empowerment work on a large scale is not easy. Managers are effectively asked to share power and control. To make it work, companies must clearly spell out the kind of leadership that they expect from senior and middle managers. Green leaders should not merely be dispassionate problem solvers (like in Orange); they should be servant leaders. They should listen to subordinates, empower them, motivate them, and develop them. Time and effort is invested in developing servant leaders:

  • Candidates for management are screened on their mindset and behavior: Are they ready to share power? Will they lead with humility?
  • Green Organizations often invest large amounts in courses for newly promoted managers, to teach them the mindset and skills of servant leaders.
  • Managers are evaluated based on 360-degree feedback, to make bosses accountable to their subordinates.
  • In some companies, managers are not appointed from above, but from below: subordinates choose their boss, after interviewing prospective candidates.

Green breakthrough 2: Values-driven culture and inspirational purpose

A strong, shared culture is the glue that keeps empowered organizations from falling apart. Frontline employees are trusted to make decisions, guided by shared values rather than by a thick book of policies.

Some people become disillusioned with this, and scoff at the notion of shared values. This is because Orange Organizations increasingly feel obliged to follow the fad: they define a set of values, post them on walls and on-line, and then ignore them if that is more convenient for the bottom line. But where leadership genuinely plays by shared values, you encounter incredibly vibrant cultures in which employees feel appreciated and empowered. Results are often spectacular. Research suggests values-driven organizations can outperform peers by wide margins.[4]

Green Organizations may put inspirational purpose at the heart of what they do. Southwest doesn’t consider itself merely in the transportation business; it insists it is in the business of “freedom,” helping customers to go to places they couldn’t without Southwest’s low fares. Ben & Jerry’s is not just about ice cream, it’s about the earth and the environment too.

In Orange Organizations, strategy and its execution are prime. In Green Organizations, culture is paramount. CEOs of Green Organizations claim that promoting culture and shared values is their primary task. This focus elevates human resources (HR) to a central role. The HR director is often an influential member of the senior team, and a counselor to the CEO. She heads a large staff orchestrating big investments into processes like training, culture initiatives, 360-degree feedback, succession planning and morale surveys.

Green breakthrough 3: Multiple stakeholder perspective

Green Organizations insist that businesses have a responsibility not only to investors, but also to management, employees, customers, suppliers, local communities, society at large, and the environment. The role of leadership is to make the right trade-offs so that all stakeholders can thrive.

This is in contrast with the Orange perspective that for-profit companies should operate with a shareholder perspective and that management’s primary obligation is to maximize profits for investors. Adam Smith’s “invisible hand” is often invoked to explain how this benefits all stakeholders in the long run.

While many large organizations today are required to publish a social responsibility report, Green Organizations consider social responsibility integral to how they do business. It is not a distracting obligation.

Social responsibility provides the motivation to innovate and to become better corporate citizens. They work with suppliers in developing countries to improve working conditions and prevent child labor; they reduce their carbon footprint and use of water; they may recycle products and reduce packaging.

Leaders in Green Organizations maintain that while the “stakeholder perspective” might mean higher costs in the short term, it will deliver benefits for all in the long run—including shareholders.

Family as the guiding metaphor

The dominant metaphor in Green is the family. This contrasts with the ‘organization as a machine’ in Achievement Orange. When leaders of Green Organizations speak, you can’t fail to notice how frequently the metaphor comes up: employees are part of the same family, in it together, ready to help each other out, being there for one another.

At Southwest, one of eight injunctions is to display “a servant’s heart”. In the Southwest Way it is for employees to “Embrace the SWA family.”

DaVita, a leading operator of dialysis centers, that has implemented Green principles with great consistency.[5]It uses another community metaphor, the Village, and calls its 41,000 employees citizens. Corporate headquarters is known as Casa DaVita, while Kent Thiry, the chairman and CEO is called Mayor of the Village. He is credited with having rescued the company from virtual bankruptcy in 1999 to its current success by virtue of the Green culture he brought about.

The Shadow of Green

Green is born from the movement away from Orange, in many ways specifically away from the shadow of Orange. At its peak, Green is communitarian, egalitarian and consensual.[6]

The accomplishments of Green are significant and can probably not be overstated. In the short time of it’s existence humanity has seen major change in the direction of a more humane society: the civil rights movement, the women’s liberation movement, the global drive for environmental protection, heightened awareness for the need to protect our ecosystems, health care reforms, improved awareness of marginalization of minority groups in society, and more are all examples of progress that would never have emerged without it.

But as much as Green is a healthy counterbalance to Orange, and to some extent also the previous stages, it is also a stage that can rigidify too far into its own spectrum and display its very own shadow tendencies.

Relativism without boundaries

Green is put in a dilemma when its benevolence and tolerance is abused by the same groups that Green wants to invite into equality on equal terms. Green shadow is forced to choose between accepting when non-tolerant Amber and Red abuses its tolerance or to acknowledge that not all worldviews have the same level of maturity and may need different levels of limitation.

Non-rational is better

In an effort to distance itself from Orange (rational) views, Green shadow sees all non-rational value systems as preferable. Green has a romantic notion with ‘back to nature’. It often does not see how pre-rational worldviews are deeply limited and how different they are from post-rational Green worldviews.

Accidental sameness as an externality of pluralistic identity

When Green’s strong inclusion drive becomes identity this causes a need for shared ideals as a prerequisite for group membership consideration.[7] When this “like me, like us” filter becomes more important to determine membership than if an individual is motivated and capable to contribute to the organization’s purpose this often causes three problems at the collective level: Limited choice of people, lack of diversity inside the organization and a limited ability to get things done.

Power and structure is the obstacle to equality

Green shadow confuses power with structure. Nature is full of both structure and natural hierarchy. In an effort to eradicate ineaquality Green shadow often attempts to dismantle all hiearchy and structure. But removing all formal structure from an organization does not defuse power, it forces power underground into informal structures. When members of these informal structures are not elected by members of the whole group the individuals who have power don't need to answer to the whole group or organization. This reduces transparency about use of power and disjoints power from accountability.[8]Power can’t simply be wished away. Like the Hydra, if you cut off its head, another will pop up somewhere else.

Notes and references

  1. This stage corresponds to Loevinger’s and Cook-Greuter’s “Individualistic,” Torbert’s “Individualist,” Wade’s “Affiliative,” Graves’ “FS,” Spiral Dynamics’ “Green,” and others; it is often simply referred to as postmodernity.
  2. Often in history we find ideas, like democracy in ancient Greece, ahead of their times, meaning ahead of the developmental center of gravity of people at that moment in time. To flourish, these ideas have to wait for evolution to catch up with them, to provide the right “cultural womb” as the American philosopher Richard Tarnas calls it: A big question here is why did the Copernican Revolution happen in the sixteenth century, with Copernicus himself, and in the early seventeenth century, with Kepler and Galileo? Why did it take until then, when a number of people prior to Copernicus had hypothesized the heliocentric universe and a planetary earth? There’s evidence of this being proposed among the ancient Greeks and in India and Islamic cultures during the European Middle Ages. I think this question shows the extent to which a major paradigm shift depends on more than just some additional empirical data and more than just a brilliant new theory using a new concept. It really depends on a much larger context so that the seed of a potentially powerful idea falls on a whole different soil, out of which this organism, this new conceptual framework, can grow—literally a “conception” in a new cultural and historical womb or matrix. Richard Tarnas and Dean Radin, “The Timing of Paradigm Shifts,” Noetic Now, January 2012.
  3. In the corporate sector, worker cooperatives have failed to achieve any meaningful traction. The ones that prevail are often run on practices that are a combination of Orange and Green. One often-cited success story is Mondragon, a conglomerate of cooperatives based in a Basque town of the same name in Spain (around 250 companies, employing roughly 100,000 people, with a turnover of around €15 billion). All the cooperatives are fully employee-owned. Bosses are elected; wage differentials are smaller than elsewhere (but still significant, at up to 9:1 or more); temporary workers have no voting rights, creating a two-tiered community where some are more equal than others. In the educational sector, there have been several models of schools with no authority structures from adults over children, most notably the Summerhill School, a British boarding school founded in the 1920s. It practices a radical form of democracy, where students and adults have the same voting power, and lessons are not compulsory, among other differences. In the institutional sphere, many supranational bodies―the United Nations, European Union, and World Trade Organization, and others―have decision-making mechanisms at the highest level that are, at least partially, molded along Green principles such as democratic or unanimous voting of the different member countries and rotating chairmanship. These Green decision-making principles are difficult to uphold, and richer or more powerful countries demand and often end up receiving more voting powers (often even implicit if not explicit veto powers). The staff departments of these institutions are most often run as Amber Organizations.
  4. The first major study dates from 1992, when Harvard Business School professors John Kotter and James Heskett investigated this link in their book Corporate Culture and Performance. They established that companies with strong business cultures and empowered managers/employees outperformed other companies on revenue growth (by a factor of four), stock price increase (by a factor of eight) and increase in net income (by a factor of more than 700) during the 11 years considered in the research. A more recent study by Raj Sisodia, Jagh Sheth, and David B. Wolfe, in what is arguably a defining book for the Green organizational model―Firms of Endearment: How World-Class Companies Profit from Passion and Purpose―came to similar conclusions in 2007. The “firms of endearment” studied by the authors obtained a cumulative return to shareholders of 1,025 percent over the 10 years leading up to the research, as compared to 122 percent for the S&P 500. From a methodological point of view, these results should be taken with a grain of salt. There is an obvious selection bias, as only exceptional companies that one would expect to outperform their peers were handpicked into the sample. The benchmark of the S&P 500 wasn’t adjusted for industry, size, or other criteria. Furthermore, criteria other than the organization model, such as patents, innovative business models, and asset utilizationsthat could explain the superior result, were not filtered out. Raj Sisodia’s latest book, written with John Mackey, has a whole chapter with references of similar studies to which interested readers can refer. Any research trying to make such general claims as the superior outcome of one organizational model over another is bound to hit methodological discussions (and on a principled level, one could question shareholder return or growth as the primary metric to gauge success, as most of these studies do). Perhaps direct experience ultimately matters more than academic claims. Anyone who spends time in organizations such as Southwest Airlines or The Container Store will return convinced that empowered workers in values-driven companies will on average outperform their peers in more traditional settings.
  5. The 2006 Stanford Business Case on DaVita is highly readable and a good resource for readers wanting to immerse themselves in a more detailed description of Green organizational principles and practices.
  6. Don Beck puts it this way: "Our science left us numb, without heart and soul, and with only the outer manifestations of success. The “good life” was measured only in materialistic terms. We discover that we have become alienated from ourselves, as well as from others. [...] the basic human being has been neglected. The focus shifts from personal achievement to group- and community-oriented goals and objectives—for GREEN, we are all one human family. GREEN begins by making peace with ourselves and then expands to looking at the dissonance and conflicts in society and wanting to make peace there, too, addressing the economic gaps and inequities created by ORANGE, and also by BLUE and by RED, to bring peace and brotherhood so we can all share equally. Gender roles are derigidified, glass ceilings opened, affirmative action plans are implemented, and social class distinctions blurred. Spirituality returns as a nondenominational, nonsectarian “unity.””
  7. The resulting attitude becomes protection of the unique sameness inside the organization. This couples with an implicit judgement and suspiciousness of outsiders as potential threats to the established culture. This typically does not manifest in explicit or outspoken criticism as Green often tries to avoid confrontation. Rather this is more often seen as a moral high ground of implicit “shoulds” and unspoken expectations of certain views and means of expressions that must be exhibited or agreed on for acceptance from insiders. Any lack of such views or expression is confirmation that non-acceptance is justified. Clare W Graves puts it this way: “Green brings into existence the sociocratic value system, in which emphasis is placed upon ‘getting along’, accepting the authority of the group or the majority, and seeking status from others. This ‘other directed’ individual believes he will find salvation in belonging and in participating with others in what they want him to do. While the individual has given up his dogmatism, he nevertheless rigidifies in a world of sociocentric thinking.”, for more see The Mean Green Hypothesis: Fact or Fiction, by Natasha Todorovic
  8. The natural cause of differences of power and influence is rooted in the diversity in individual people. We all have different levels of abilities, experience, range of expression and when we use these they naturally result in exercise of our own personal power - which is genuinely different in strength and nature. Jo Freeman puts it this way: “The idea of ‘structurelessness’ does not prevent the formation of informal structures, but only formal ones. [...] Thus, ‘structurelessness’ becomes a way of masking power. An unstructured group always has an informal, or covert, structure. It is this informal structure, particularly in unstructured groups, which forms the basis for elites. An elite refers to a small group of people who have power over a larger group of which they are part, usually without direct responsibility to that larger group, and often without their knowledge or consent. Elites are not conspiracies.These friendship groups function as networks of communication outside any regular channels for such communication that may have been set up by a group. Because people are friends, usually sharing the same values and orientations, because they talk to each other socially and consult with each other when common decisions have to be made, the people involved in these networks have more power in the group than those who don’t. For everyone to have the opportunity to be involved in a given group and to participate in its activities there needs to be explicit structure. The rules of decision-making must be open and available to everyone, and this can only happen if they are formalised. A ‘Structurelessness’ organisation is impossible. We can only decide whether or not to have a formally or informally structured one. [...] All groups create informal structures as a result of the interaction patterns among the members. Such informal structures can do very useful things. But only unstructured groups are totally governed by them. When informal elites are combined with a myth of ‘structurelessness’, there can be no attempt to put limits on the use of power. Consequences: a) people listen to others because they like them, not because they say significant things. b) informal structures have no obligation to be responsible to the group at large. Their power was not given to them; it cannot be taken away. Their influence is not based on what they do for the group; therefore they cannot be directly influenced by the group.”, see The Tyranny of Structurelessness, by Jo Freeman for more.