The topic of Strategy covers how the traditional process of strategic planning plays out in Teal organizations.
A New Perspective
Every historical stage has given birth to a distinct perspective on strategy, and to very different practices:
Red organizations don't typically develop long-term goals or strategies beyond survival. The chief(s) seek short-term gains to maintain power, and to respond to threats and opportunities as they arise.
Amber organizations can develop strategies but do not emphasize them, as the world is viewed as relatively unchanging and predictable. The emphasis is rather on processes. To the extent strategies are developed, this is done very much at the top of the hierarchy only. Decisions are handed down to workers at the bottom, with information shared only as needed.
In an Orange organization, strategy becomes much more important, as the world is viewed as increasingly dynamic. However, while the world is considered increasingly complicated, it is still viewed as predictable. Strategy is still generally a very top-down process but transitions from command and control to predict and control. In order to maintain competitive advantage, the Orange paradigm concludes that large parts of the organization must be empowered and given some room to think and execute on their own. This gave rise to management by objectives – top management formulates an overall direction and cascades down objectives and milestones to reach the desired outcome. This has resulted in familiar processes such as regular strategic planning, yearly budgeting, balanced scorecards and key performance indicators.
In Green organizations, the organizational structure is further decentralized: lower ranks are increasingly empowered and a key responsibility of leaders is to facilitate this empowerment. However, Green organizations typically maintain some sort of hierarchical structure with strategic direction principally coming from the top. Strategy is also now enlisted in the service of purpose, which goes beyond Orange objectives of winning and profit.
In Teal organizations, power is diffused. Self-management replaces the hierarchy. Strategic thinking can come from anywhere, not just the top. Team members can offer advice, suggest initiatives, recommend change--as long as they consult with interested parties along the way. The use of the 'advice process' is the crucial enabling ingredient. Strategy is also inextricably linked to purpose, and conventional strategic planning is replaced by “listening to purpose”.
Strategy as an organic process
In traditional organizations, long-term strategy is decided by those at the top -- typically the CEO and senior management team. Strategies are developed through a process that begins with top management examining tightly held, sensitive information. This information may consist of long-term predictions and plans and solutions to capitalize on the opportunities they forecast. The plans become annual objectives, with divisional targets. Detailed documentation outlines the pre-chartered course. The new-direction/plan is communicated top-down.
In Teal organizations, there is no strategy process in the conventional sense. Instead of a direction set from the top, people in these organizations “listen” for the organization’s purpose and thereby gain a broad sense of where the organization might be called to go. A more detailed map is not needed. It would limit possibilities to a narrow, pre-charted course.
With the purpose as a guiding light, everyone, individually and collectively, is empowered to sense what might be called for. Strategy happens organically, all the time, everywhere, as people toy with ideas and test them out in the field. The organization evolves, morphs, expands, or contracts, in response to a process of collective intelligence. Reality is the great referee, not the CEO, the board or a committee. What works gathers momentum and energy within the organization; other ideas fail to catch on and wither.
Workable solutions, fast iterations
Teal organizations don't rely so heavily on the predict and control model. While predicting the future may be helpful in a complicated world, it is less relevant in an increasingly complex world. Out of this understanding, Teal organizations tend to move to implementing workable solutions, today, that can be improved at any point. Companies are not chained to strategic planning processes, or driven to achieve targets that might be quickly out of date. These companies are freer to progress quickly, via fast iterations, and revise strategies as necessary.
Jean-François Zobrist at FAVI uses the following metaphor to explain the difference. An airplane like a Boeing 747 is a complicated system. There are millions of parts that need to work together seamlessly. But everything can be mapped out; if you change one part, you should be able to predict all the consequences. A bowl of spaghetti is a complex system. Even though it has just a few dozen “parts,” it is virtually impossible to predict what will happen when you pull at the end of a strand of spaghetti that sticks out of the bowl.
Brian Robertson at Holacracy uses a metaphor from the world of agile software development to describe how the planning process differs in Teal organizations:
Imagine riding a bicycle the way we manage most modern organizations. You would hold a big meeting to decide the angle at which you should hold the handlebars; you’d map your journey in as much detail as possible, factoring in all known obstacles and the exact timing and degree to which you would need to adjust your course to avoid these. Then you would get on the bicycle, hold the handlebars rigidly at the angle calculated, close your eyes, and steer according to plan. Odds are you would not reach your target, even if you did manage to keep the bicycle upright for the entire trip. When the bicycle falls over, you might ask: “Why didn’t we get this right the first time?” And maybe: “Who screwed up?”
That ridiculous approach isn’t so far from the approach many organizations take to strategic planning. By contrast, Holacracy helps an organization operate more like the way we actually ride a bicycle, using a dynamic steering paradigm. Dynamic steering means constant adjustment in light of real feedback, which makes for a more organic and emergent path. If you watch even the most skilled cyclist, you’ll see a slight but constant weaving, as the rider constantly takes in sensory feedback about his present state and environment, and makes minor corrections to direction, speed, balance, and aerodynamics. Weaving arises because the rider maintains a dynamic equilibrium while moving forward, using rapid feedback to stay within the many constraints of the environment and equipment. Instead of wasting a lot of time and energy predicting exactly the “right” path in advance, he instead holds his purpose in mind, stays present in the moment, and finds the most natural way forward as he goes. That’s not to say the rider doesn’t have a plan or at least some sense of his likely route, just that he gains more control, not less, by surrendering to present reality continuously and trusting his capacity to sense and respond in the moment. Similarly, we have the opportunity to get more control in our organizations by more relentlessly facing reality and adapting continuously. When we become attached to a specific predicted outcome, there’s a risk we will get stuck fighting reality when it doesn’t conform to our prediction.
In Teal, strategy emerges organically from the collective intelligence of everyone in the organization. This collective intelligence is encouraged by sharing company data and information. As everyone is 'in the know', information is available to all to offer strategic suggestions.
Teal organizations may use 'all-hands meetings' to share important information, and to discuss the organization's response. This reflects trust in the organization's collective intelligence. It also rejects the notion that a only small group of people at the top could master all the complex information necessary to make sound strategic choices.
Frequently Asked Questions
In Teal organizations, thousands of decisions are made by individuals and teams who are trusted to do the right thing. Plans are not handed down from the top with little room to maneuver. People are trusted to plan, make improvements, and execute.
In Teal, employees are encouraged to bring their 'whole self' to work: the emotional, the intuitive, and the spiritual are all welcome. The workplace becomes more holistic as a result. This allows for, and encourages, reflection and mindfulness. Reflection on the company's purpose and direction is encouraged.
Because Teal organizations are driven by evolutionary purpose, traditional strategic planning is replaced by the process of listening to purpose. The purpose of an organization is a manifestation of its collective intelligence, and so its direction cannot be mandated from the top down.
Brian Robertson offers the following on this topic:
While Holacracy’s approach to strategy resists relying on predictions, that’s not to say all forward-looking projections and anticipatory thinking are useless. In this regard, it’s helpful to understand the difference between a prediction and a projection. “Predict” comes from the Latin præ-, “before,” and dicere, “to say”— thus it literally means “to say before,” or “to foretell, prophesize.” “Project,” on the other hand, is from the Latin pro-, “forward,” and jacere, “to throw”— thus, “to throw forth.” In order to throw forth, you must be firmly grounded in the place you are starting from: the present reality. Getting real data and “throwing it forth” to get a sense of where events are headed is often useful to better understand your context, and it is different than “foretelling and prophesizing” where reality will be in the future.
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 4506-4509). Nelson Parker. Kindle Edition. ↩︎
Laloux, Frederic (2014-02-09). Reinventing Organizations: A Guide to Creating Organizations Inspired by the Next Stage of Human Consciousness (Kindle Locations 4577-4581). Nelson Parker. Kindle Edition. ↩︎
Robertson, Brian J. (2015-06-02). Holacracy: The New Management System for a Rapidly Changing World (Kindle Locations 1765-1781). Henry Holt and Co.. Kindle Edition. ↩︎
Frederic. Reinventing Organizations (pp110-112). Nelson Parker, 2014. ↩︎
Robertson, Brian J. (2015-06-02). Holacracy: The New Management System for a Rapidly Changing World (Kindle Locations 1834-1842). Henry Holt and Co.. Kindle Edition. ↩︎