This article addresses how staff functions are handled in Teal organizations.
A New Perspective
In the last decades, we have witnessed, especially in large organizations, a proliferation of staff functions: human resources (HR), strategic planning, legal affairs, finance, internal communications, risk management, internal audit, investor relations, training, public affairs, environmental control, engineering services, quality control, knowledge management and so on.
Staff roles were developed to support the establishment and adherence to processes and planning of Amber organizations. They were further expanded to facilitate the efficiencies sought by the Orange paradigm and to satisfy its desire for expertise and accountability. While Green organizations tend to place more emphasis on using staff roles to support the frontline (often ironically, resulting in an increased HR staff), it is only under Teal that the trend of increasing use of staff functions is reversed. In Teal, tasks typically performed by support functions are, whenever possible, done by frontline teams themselves. Those staff roles that do exist typically cannot impose their rules or decisions on the organization.
Centralized staff functions in most organizations create rules, policies and processes for others to follow. There is a natural tendency for people in such staff functions, often with the best of intentions, to prove their worth by finding ways to “add value” by devising rules and procedures, building up expertise, finding new problems to solve.
Ultimately, this process concentrates power and decision-making away from the operational frontline. People there often end up feeling disempowered: they have to follow rules that often make sense only in principle but cannot accommodate the complexity of the concrete situations faced in practice.
For these reasons, Teal organizations keep staff functions to a bare minimum. They understand that the economies of scale and skill resulting from staff functions are often outweighed by the diseconomies of motivation produced. As a result, there are very few people working in staff functions in Teal Organizations. And those that do typically have no decision-making authority. They can provide guidelines but cannot impose a rule or a decision.
The need for expertise
In every organization there is a natural tension between the need for expertise and the need to let frontline people make decisions. When a need for expertise arises, the first instinct of most organizations is to create a central pool of experts. The risk, of course, is that over time two castes emerge within the organization: a prestigious (often highly paid) group of central experts, and a disempowered group of people performing operational work in the field.
Instead, Teal organizations allow expertise to develop in a distributed fashion. Over time, colleagues in frontline teams build up a lot of specialized knowledge. A machine operator might know all about the use of a certain lubricant, a home-care nurse all about a certain arcane medical condition, or an engineer all about how to create a complex financial tool to calculate a new machine's return on investment. Rather than establishing staff roles for these experts, Teal organizations aim to help team members identify colleagues with the right expertise. It can be highly motivating for people to be sought out by colleagues for advice and expertise. Special systems for sharing information are common, such as internal social networks and knowledge platforms.
In many cases, volunteer task forces can be set up to codify and disseminate knowledge in specific areas (through central knowledge repositories, training, etc.).
Finally, expertise in certain areas (say about labor law in Human Resources) can be contracted from the outside. Rather than hiring an expert into a staff role, a freelancer or consultant can be used as an advisor when needed by members of frontline teams.
Economies of scale
Staff functions are also often put in place based on the rationale that they will provide economies of scale. These economies are easy to estimate in principle and provide a ready justification for the centralization of certain tasks. Yet this overlooks the other real costs in the form of diseconomies of motivation and disconnection from frontline realities.
Teal organizations will pursue economies of scale without creating staff functions in the traditional sense. Say different teams in a factory or across a number of factories all buy a certain material, and pooling their purchases makes sense . One team might simply step up and become the lead purchaser for that product (asking other teams, at a fixed frequency, for their orders). In this way, different teams step up to lead certain efforts for other teams in a decentralized way.
In other cases, it might make sense for colleagues to create a role to handle certain functions. For instance, in certain countries, labor laws might imply a lot of administrative work to manage payroll. Teams could decide to delegate this work to a central staff role that they created. In Teal however, the central staff role works on behalf of the teams, and cannot impose top-down decisions. A frontline team that decides not to use the services of the central support staff is free to do so.
Similarly, in many cases, it makes sense to set common standards for the entire organization, for instance in human resources (e.g., let's make sure everyone gets the same experience, whatever team they are hired into), marketing (e.g., let's use common templates and design elements), finance (e.g., let's make numbers comparable), IT (e.g., let's buy equipment that is compatible), etc. In traditional organizations, rules, policies and procedures are set up by central staff functions, who then also enforce compliance.
In Teal, such standards can easily be decided upon by one person taking the lead, using the advice process. Alternatively, people with similar roles in different units (say people involved with on-boarding new colleagues) can create a voluntary task force and jointly devise standards and guidelines. AES, a large energy provider, when it operated on self-managing principles, worked with an 80/20 rule: all colleagues were expected to spend 20% of their time in a voluntary task force (or temporary project team) next to the 80% on their primary roles.
Frequently Asked Questions
In some industries, the risks for non-compliance with certain procedures are especially high. Regulators might even go so far as to require someone to sign on behalf of the organization, typically a “C-Suite” executive ―the CFO for the accounts, the Chief Risk Officer for topics related to risk, etc. Because this individual risks personal consequences for the organization’s non-compliance including legal actions imposed by outside regulators, he or she would naturally want to protect him or herself from risk by mandating strict rules and enforcing their compliance. How can self-managing organizations address this issue?
One way to deal with this is through voluntary task forces. A risk task force for instance, composed of people with roles related to risk in their respective units, could commonly decide on standards and policies to ensure risks are mitigated in ways that align with the regulator's request. In terms of who then signs on behalf of the organization (or interfaces with the regulator), members of the task force might take turns with each member taking on that responsibility for a one-year period. The task force can also decide to organize cross-audits where a member of one unit audits another unit. Organizations like AES who have used this method report that there is more, not less, control. Voluntary task forces know much better than a central staff function far away in headquarters where the risks are, what guidelines are appropriate, where and what to look for in cross-audits. And voluntary task forces breed a sense of solidarity and responsibility. If one unit fails, it will be "one of us" who has to bear the brunt of repercussions from the regulator. Compare this to traditional staff roles, where the Head of Risk in headquarters edicts rules that are often hard to apply on the ground, enticing people to find workarounds.
The case of AES (see more on AES below) which has operated in the highly regulated electricity generation and distribution markets, gives at least an indication that the existence of strong regulation can be dealt with by self-managing structures.
Central staff functions, as they are used today in many large organizations, concentrate power away from their operational colleagues. Eliminating or drastically reducing the influence of centralized staff returns autonomy to the rest of the organization and is a key element of the Teal breakthrough of self-management.
In many organizations, the relationship of central staff functions with people in operating units is based on mistrust: without staff policing them, operations cannot be relied on to act in ways that benefit the organization as a whole. With Teal, people are trusted to take into account the needs of the whole organization and are freed to pursue their passions and interests.
Central staff functions tend to make the organization more static and prevent innovations from happening freely at the margins, thereby slowing down the unfolding of the organization's purpose. Dealing in decentralized ways with the need for expertise, economies of scale and joint standards increases an organization's agility, and thereby its potential to pursue its evolutionary purpose.
Concrete cases for inspiration
Notes and references
Laloux, Frederic (2014-02-09). Reinventing Organizations: A Guide to Creating Organizations Inspired by the Next Stage of Human Consciousness (Kindle Locations 1630-1636). Nelson Parker. Kindle Edition. ↩︎