Innovation and Product Development

This topic, Innovation and Product Development, describes how advances and improvements occur in Teal organizations.

A New Perspective

One of Orange’s shadows is “innovation gone mad.” With most of our basic needs taken care of, businesses increasingly try to create needs, feeding the illusion that more stuff we don’t really need— more possessions, the latest fashion, a more youthful body— will make us happy and whole. We increasingly come to see that much of this economy based on fabricated needs is unsustainable from a financial and ecological perspective. We have reached a stage where we often pursue growth for growth’s sake, a condition that in medical terminology would simply be called cancer. [1]

For Teal organizations, the impetus for innovation stems from an organization’s evolutionary purpose. The concept of innovation expands beyond benefit to the organization and is not approached through the traditional lenses of profit and competition. To evaluate if an innovation is worthwhile, Teal uses a wide range of evidence of beauty, creativity and ultimately service to the organization's purpose and therefore to society.

For more on innovation and product development in earlier stage organizations:

Red organizations

Red organizations are opportunistic and adaptive in response to their circumstances, but without organizing specifically for innovation.

Amber organizations

Amber organizations value predictable processes. Their sustained existence is tied to the maintenance of proven tools and roles. Innovations are adopted, cautiously, after top-down endorsement.

Orange organizations

With Orange, innovation becomes a core practice. It is necessary to stay competitive. At the organization level, there is investment in R&D. Research centers might be established. At the operating level, units are encouraged to be creative in how they achieve their targets. All these activities are subject to review in the regular operating and strategic planning cycles.

Green organizations

Green organizations are values-based. This colors their approach to innovation. It’s not only about making money, but about also serving their greater purpose. This is reflected in product development/selection at, say, a place like Whole Foods. And it encourages service level initiative—as at Southwestern Airlines. Their multi-stakeholder view encourages them to find novel approaches to labor relations, employee empowerment, customer service, shareholder interests, and the communities of which they are a part.

In Practice

In Teal, the focus is to find better ways to serve the organization's unique sense of evolutionary purpose, rather than out-think the competition. Members are encouraged to “listen” for opportunities, and test these via the advice process. This means ideas must be discussed with knowledgeable colleagues. In this environment, anyone, and everyone, can be an innovator.

Design for Life, Beauty, Benefit

Product innovation in traditional companies is commonly the result of exhaustive analyses of customer segments, buyer behavior and the competition—a very ‘left-brain’ approach.

In Teal, the source of innovation is more ‘right brain’. It is spurred by purpose, and arises from ‘listening’ for what seem to be the right offerings. It attempts to answer these questions:

- “What product would we be really proud of?”

- “What product would fill a genuine need in the world?”'

- “What product or service are we uniquely capable of providing?”'

These reflections are guided by intuition and perceptions of beauty. They can also be supported by structured design practices that are intended to catalyze empathetic thinking. An example is the concept of "design ideation"[2]This is a process where frontline workers spend long periods out in the field, observing how their customers are using their products and services.

Innovation at the frontlines

Any frontline person can act on insights gained from working closely with the customer and therefore having a deep understanding of his or her needs. With Teal self-management, there is nothing to hold back a good idea from being pursued if it has use for customers and if its pursuit adheres to the advice process.

Practice sharing

New insights and practices are systematically shared through Teal Organizations, often through an intranet or wiki. Through sense and respond and various practices supporting evolutionary purpose, these successful innovations can potentially be adopted quickly throughout the organization.

Innovation impacts whole organization

Emergent innovation does not just follow organizational purpose but may impact the evolutionary purpose of a Teal organization, shifting its impulse into a new direction and potential.

Frequently Asked Questions

In Teal organizations decision-making is bounded by the advice process. Anybody with strong skills in a particular area can contribute, irrespective of position, and this is certainly true with respect to innovation. However, the Teal paradigm also confers on all decision-makers the obligation to respect the advice process and consult with appropriate individuals within the organization. This does not mean that everyone consulted has to agree with a proposed innovation, only that his or her advice is considered. To the extent that Steve Jobs’ success as an innovator was facilitated by his working in a conventional hierarchical structure and his consequential ability to make decisions unilaterally, this might lessen his effectiveness in a Teal organization. However, at the same time, the collective innovative intelligence of the entire organization is unleashed under Teal, making it not nearly so dependent on the contributions of a single individual.

All three Teal breakthroughs are supported by the practices and principles for Teal innovation and product development.


Self management allows anybody to innovate and develop improvements in products and services with minimal delay. The empathetic understanding that frontline staff have for their customers can be used to act on observed needs.


Wholeness is integrated into the design and product development process through a "whole brain" approach. Teal innovation designs for aspects such as beauty and through intuition as well as more traditional market or customer analysis.

Evolutionary purpose

In Teal, innovations are selected first and foremost based on fit with the organization's purpose. Furthermore, innovation plays a key role in the evolution of that purpose.

Concrete cases for inspiration

Buurtzorg develops a new boarding house to support overwhelmed relatives of their patients.

One team in the countryside had an idea: A boarding house for patients, to offer the patient's primary caregiver a break. With most patients, Buurtzorg provides medical care, but someone else - often the patient's husband or wife, sometimes a patient's child - is really the primary caretaker. It is not unusual for the husband or wife, often elderly as well, to be exhausted by the constant care of the patient, sometimes 24 hours a day. If the strain becomes too much, the caregiver can fall sick too.

Wouldn't it be wonderful, one team of nurses thought, if we could have a place where we could take in our patients for a day or two, or even a week - a sort of bed and breakfast and lunch and dinner and care - so that their primary caretaker could take a break and rest? One of the nurses had inherited a small farmhouse in the countryside. Together, the team transformed it into a Buurtzorg boarding house.

The idea of boarding houses will run its own course. If it is meant to be, if it has enough life force, it will attract nurses from other teams to make it happen and carry Buurtzorg into a new dimension of care. Otherwise, it will remain a small scale experiment[3]

Buurtzorg develops a new service concept, Buurtzorg+, to improve injury prevention.

Two nurses on a Buurtzorg team found themselves pondering the fact that elderly people, when they fall, often break their hips. Hip replacements are routine surgery, but patients don’t always recover the same autonomy. Could Buurtzorg play a role in preventing its older patients from falling down? The two nurses experimented and created a partnership with a physiotherapist and an occupational therapist from their neighborhood. They advised patients on small changes they could bring to their home interiors, and changes of habits that would minimize risks of falling down. Other teams showed interest, and the approach, now called Buurtzorg+, has spread throughout the country. The two nurses sensed a need, and with the power of self-management acted upon it. Self-management helped the idea to spread. Any team interested in Buurtzorg+ can sign up for a training event that teaches them the basics of how the concept works and how to create such a partnership in their neighborhood[4]

FAVI invents the first method for molding 100 % pure copper - for challenge and beauty, with zero market research.

In the 1990s, Zobrist (CEO) and a few colleagues at FAVI became fascinated with the following idea: foundries always produce alloys, because pure copper cannot be molded. What if FAVI could somehow do the impossible - shape industrial products made of 100 percent pure copper? They started tinkering.

Would there be a market for such products? They had no idea, but they didn't care to commission a market study. Pure copper has some properties, like electrical conductivity, that alloys don't have; such a property must have a purpose. What really got them excited was not the market they might discover. They were excited by the beauty of the seemingly impossible: to shape pure copper.

After two years of tinkering, they succeeded. And as they had imagined, a market came knocking at their door. Pure copper rotors have interesting properties in electrical motors. This is now an important business for FAVI.[5]

FAVI invents a new antiseptic copper alloy for hospitals using aesthetics and intuition.

Metallurgists have long known that copper has antiseptic properties. It's a shame, people at FAVI thought, that this property isn't put to use in products. A team started tinkering with antimicrobial copper equipment for hospitals. A prototype soon gave promising results, but Zobrist (CEO) was bothered by its color. The reddish color of copper evokes the faded world of old 19th-century sanatoriums, he found.

Zobrist (CEO) asked the project team if they could make a prototype with a silver-colored alloy, to give it the shine of stainless steel we associate with modern equipment. The team scoffed: This simply made no sense. The added material for the alloy would make the copper lose its antiseptic properties. Zobrist (CEO) knew he had no ground to stand on. But he was possessed by a deep aesthetic and intuitive sense that it was worth pursuing. He managed to persuade the team into giving it a try.

To everybody's surprise, and for reasons still unclear, the silver-color alloy not only kept the copper's antiseptic properties, it enhanced them. A new market opened for FAVI.

The product development process that FAVI used to achieve this breakthrough was developed in collaboration with a Japanese professor, Shoji Shiba. It is a design process that explicitly factors in emotions, beauty and intuition[6]

Related Topics

    Notes and references

    1. Laloux, Frederic (2014-02-09). Reinventing Organizations: A Guide to Creating Organizations Inspired by the Next Stage of Human Consciousness (Kindle Locations 837-841). Nelson Parker. Kindle Edition. ↩︎

    2. Ideation for product design from IDEO - ↩︎

    3. Laloux, Frederic. Reinventing Organizations. Nelson Parker (2014), page 200 ↩︎

    4. Laloux, Frederic. Reinventing Organizations. Nelson Parker (2014), page 203 ↩︎

    5. Laloux, Frederic. Reinventing Organizations. Nelson Parker (2014), page 208 ↩︎

    6. Laloux, Frederic. Reinventing Organizations. Nelson Parker (2014), page 209 ↩︎