Organizational Structure

Self-management

Teal organizational structures are driven by self-management. The traditional boss-subordinate relationship gives way to a decentralized team structure and peer to peer commitments.

Wholeness

Pyramidal structures are built on the (often unconscious) assumption that people cannot be trusted and must be controlled by their hierarchical superior. In Teal organizational structures, people are freed from the constraints of authority and can thus show up more fully.

Evolutionary purpose

In Teal organizations, people’s actions are guided by their sense of the organization’s evolutionary purpose, not by what they are being told to do by someone higher up the organizational chain. Self-managing systems, based on sense and respond as opposed to command and control, tend to evolve much faster and respond more quickly to changes in the environment. Pyramidal organizations tend to change through less frequent, less timely and more brutal re-organizations.

In today’s world, the predominant, default organizational model is that of the pyramid, with an executive committee, middle managers, staff functions, and policies and procedures to ensure control. Self-managing systems are still the exception, and many people's default behaviors, even in established self-managing organizations, can revert to those of more traditional, hierarchical management. This might explain why in all self-managing organizations to date, the founder or the most senior “leader” has filled one particular role: that of "holding the space" of distributed authority. Whenever people in the organization, consciously or unconsciously, revert to traditional management control mechanisms, the leader reminds everyone about the fundamental assumptions and encourages them to find solutions in line with the self-managing nature of the organization.

In self-managed teams, many management tasks disappear, since people are no longer being “managed”. Other tasks (planning, setting objectives, monitoring team performance, recruiting, etc.) remain, and it is up to the team to make it clear among themselves what the various roles and task responsibilities of the team members are. In some cases, such tasks can simply be spread among team members (I do the planning, you lead the recruiting, etc.). Such a model works well when the nature of the team’s operational roles allows for flexibility (e.g., knowledge workers who can interrupt their primary work or nurses who can take time between patient visits for administrative tasks). Other types of work require fixed and dedicated hours that cannot be easily interrupted. Teachers, for instance, can't easily leave the classroom and machine operators can't easily leave their workplace. In such cases, it might be necessary to have a team coordinator that isn't tied to a classroom or a machine to take on a number of the management tasks.

Having a team coordinator nevertheless carries a risk. Our cultural baggage of hierarchy is so strong that over time, team coordinators could start behaving like bosses and become the primary decision makers on their teams. At FAVI, a simple but powerful relief valve exists. Should a team leader find the taste of power too sweet, workers can choose at any moment to join another team.

See also, “Role Definition and Allocation”.

Fitzii is organized in three parallel teams and uses a Venn diagram to illustrate where teams overlap and share decision making

Fitzii is organized in three parallel teams along functional lines – product & development, sales & marketing, and hiring success. Each has a senior person who plays a strategy and planning role but has no authority over other team members (Fitzii uses the advice process and other peer-based processes for decision making).

Fitzii maintains a Venn diagram to show the relationship between its three teams. Each team is responsible for its own plans; every combination of two teams has shared plans where their work overlaps; and finally, certain topics rest in the center of the Venn where any changes require input from all three teams. “Center of the Venn” topics include Fitzii’s evolutionary purpose, strategy and thematic goals, product and service changes that could significantly affect customers, and people and culture practices such as self-management.

A nested team structure

Holacracy is an organizational operating system adopted by hundreds of organizations around the world using a nested team structure. It refers to teams as “circles” and to the structure as a whole as a “holarchy” (as distinct from a hierarchy). In a holarchy, each circle is not subjugated to those above it, but retains autonomy, individual authority, and wholeness. Circles are grouped within broader circles, all the way up until the biggest circle contains the entire organization. This circle is called the “Anchor Circle”. Teams near the "top" work on wider purposes; teams near the "bottom" work on more specialized purposes. Every circle and role within the holarchy retains real autonomy and authority as a cohesive, whole entity itself, while also having real responsibilities as a part of a larger entity. For a fuller description, see Holacracy's website.

Buurtzorg uses a geographically-based parallel team structure and team coaches.

At Buurtzorg, a Dutch neighbourhood nursing organization, nurses work in teams of 10 to 12, with each team serving around 50 patients in a small, well-defined neighbourhood. The team is in charge of all tasks that were previously fragmented across different departments.

Each team has a coach. The coach has no decision-making power and works with 40 to 50 teams at a time, making sure that no one team becomes overly dependent on the coach. The coach's role is to ask insightful questions that help teams find their own solutions.

The team is responsible for doing the intake, planning, vacation scheduling as well as administration. They even decide where to rent an office and how to decorate it. There is no leader within the team; important decisions are made collectively.

Because of this, a problem-solving culture thrives. Nurses can't offload difficult decisions to a boss and when things get tense, stressful, or unpleasant, there is no boss and no structure to blame The team knows they have all the power and latitude to solve their own problems.

The teams of nurses aren't simply empowered by their hierarchy. They are truly powerful because there is no hierarchy that has decision-making power over them. Each team is also responsible for their own recruitment. Because the team members make hiring decisions themselves, they are emotionally invested in making the recruit successful.

The absence of rules and procedures imposed by headquarters staff functions creates a huge sense of freedom and responsibility throughout the organization.

The results achieved by Buurtzorg speak for themselves. A 2009 Ernst & Young study found that Buurtzorg requires, on average, close to 40 percent fewer hours of care per client than other nursing organizations. This is despite the fact that nurses in Buurtzorg take time for coffee and talk with patients, their families, and neighbors, while other nursing organizations have come to tightly allocate the time allowed for almost every service. . At Buurtzorg, patients stay in care only half as long, heal faster, and become more autonomous.

FAVI employs a customer-based parallel team structure with supporting teams

FAVI’s factory has more than 500 employees that are organized in 21 teams called “mini-factories” of 15 to 35 people. Most of the teams are dedicated to a specific customer or customer type (the Volkswagen team, the Audi team, the Volvo team, and so forth). There are a few upstream production teams (the foundry team, the mold repair team, maintenance), and support teams (engineering, quality, lab, administration, and sales support). Each team self-organizes; there is no middle management, and there are virtually no rules or procedures other than those that the teams decide upon themselves. The staff functions have nearly all disappeared. The former HR, planning, scheduling, engineering, production-IT and purchasing departments have all been shut down. Their tasks have been taken over by the operators in the teams, who do their own hiring, purchasing, planning, and scheduling. The sales department has been disbanded too. The sales account manager for Audi is now part of the Audi team, just as the sales account manager for Volvo is part of the Volvo team. There is no head of sales above the group of account managers. In the old structure, white-collar workers in offices with windows overlooking the shop floor planned in detail what the workers needed to do, by when, and how. Now blue-collar workers effectively wear their own white collars and no longer receive instructions from above.^[3]

A lattice organization

You can’t say there is no hierarchy at Happy, as there are two clear leaders: Henry Stewart, founder and Chief Happiness Officer, and Cathy Busani, Managing Director. However there isn’t a rigid structure.

There are three departments: Happy Computers (IT Training), Happy People (leadership and personal development) and apprenticeships (funded in the UK by an Apprenticeship levy that every organisation has to pay).

Each department does have a Head but it is not necessarily a relationship between them and the people in those departments. Each person chooses who they would like to be their “M&M”. The title M&M was chosen by the staff and means Multiplier and Mentor - although the role is more of a coach.

Where staff work in a team, there is a team job description, rather than individual ones. That means that people can choose which roles in the team they want to play and these often shift.

There is a regular staff meeting (fortnightly before the pandemic, weekly during it). This will decide anything that affects everybody.

There is also a monthly Joyful meeting. This includes Henry, the heads of department and people elected by the staff as “potential leaders”. Anybody can attend this meeting. Wherever possible the teams make their own decisions, without referring to the head of that department.

Happy’s organisation chart is a series of circles with the picture of the person inside. It includes:

• Job title
• When they work
• Whether they are an activist, pragmatist, reflector or theorist (Honey and Mumford)
• Their 5 key strengths based on Strengthfinder (R)

The colours show their communication style, when at ease (external circle) and when under pressure (internal circle)

• Red = Driver,
• Yellow = Expressive,
• Green = Amiable,
• Blue = Analytical

The arrows indicate who coaches who. The chart is the work of two front-line staff who were pre-approved to come up with it.

A sociocratic framework, with Teal principles

Reddico’s structure uses the principles of Teal, with a formalized model taking the shape of a typical sociocratic framework.

All departments and teams are self-managed – each group then decides how it will operate (how often meetings will be, how information will be shared, who will be part of that group etc.). Information from team meetings is distributed to the whole company (radical transparency), with the majority of the team working on the current 90-days.

Each team also elects a representative for wider circle discussions (for instance, Operations). Information is then able to flow throughout the organization.

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