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Taylor’s Bathtub and Teal Organizations: organizational models in the age of complexity.

In 1911, Frederick Taylor published his monograph “The Principles of Scientific Management,” presenting management as the “revolution” that would eliminate productivity constraints in industrial-era organizations.

Taylor culminated the pioneering idea of dividing organizations into those who think (managers) and those who execute (workers), as well as the functional separation in the production area. This hierarchical and functional division was massively adopted since then, and its principles were applied to non-industrial work and to contexts very different from the workshops and manufacturing areas where they originated.

Niels Pflaeging, in his 2014 book “Organize for Complexity“, claims that much of what we call “management” today is not so different from what Taylor proposed over a century ago.

It’s an illustrative exercise to compare the organizational charts from 1917 of the Tabulating Machine Co., which would later merge to give rise to IBM in 1924, with that of the same IBM nearly 20 years ago.


1917 Organizational Chart of the Tabulating Machine Co.

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IBM’s Organizational Chart from the 80’s.

“Taylor’s bathtub” is the name Niel uses to denote the shape of the chart depicting market

dynamics over the past centuries: the era of high dynamism of local markets and artisanal

manufacturing, the “Taylor-type” industrial era with large markets and lesser competition, and

the highly complex era of today’s global markets, where atypical and high-performing

companies exert brutal pressure on conventional companies.”

Examples of the latter are countless and well-known, from Fintechs and companies like Apple and the Telcos pressuring conventional banking, to Tesla, Uber, Cabify, and Airbnb in the automobile, transportation, and tourism industries.

Niels argues that management styles based on Taylorism, designed in an entirely different context of lesser dynamism and competition, are ill-suited for the times we live in.

The Responsive Organizations Manifesto

A few years before Niels Pflaeging’s book was published, a group of employees from Yammer (a social networking tool that would be acquired by Microsoft in 2012) gathered CEOs and individuals involved in organizational change, reaching a similar conclusion:

The tension between organizations optimized for predictability and the unpredictable world they inhabit has reached a breaking point.

Aiming to “create a fundamental shift in the way we organize and work in the 21st century,” they signed the Responsive Manifesto. The manifesto encourages finding a new balance between practices that were effective in a predictable environment and those that might serve us now:

More predictable <> Less predictable.

Profit <> Purpose.
Hierarchies <> Networks.
Controlling <> EMpowering
Planning <> Experimentation.
Privacy <> Transparency.

The movement of Responsive Organizations is a philosophy, and it was never its intention to create tools or practical guides. Instead, it presents itself more as an umbrella to connect people and organizations with a shared vision and to find a common denominator with other movements, such as Agile or Lean.

This video made by Microsoft in 2016 introduces the philosophy of Responsive Organizations and illustrates it with a specific example of how Zara sacrifices efficiency to maximize the ability to change quickly.


Searching for new Organizational Models

This quest for alternatives is no longer just the concern of a handful of CEOs, COOs, or organizational consultants. In her 2016 publications on the Open Participatory Organization, Bonnitta Roy summarizes the three main objectives prompting an increasing number of organizations to seek new architectural structures and ways to collaborate and organize:

  • Agile organizations (many of which are startups or small to medium-sized) aim to grow without sacrificing their agility.
  • Large, centralized corporations seek to be more agile: cutting back on management expenses and unnecessary bureaucracy; decentralizing decision-making processes for faster, smarter execution; and striving to be more innovative, receptive, and resilient in the face of disruptive technologies.
  • Hierarchical and bureaucratic entities (and indeed all others) aim to attract top talents by crafting work conditions that appeal to them.

Clearly, these objectives aim to tackle the fundamental elements of success in a constantly evolving and complex environment. In this landscape, the competition isn’t limited to just raw materials, products, or services; it also centers around a valuable and limited resource: talent


Teal Organizations

In 2011, Frederic Laloux, disheartened and weary, left his position as Associate Principal at McKinsey & Co. Over the next two and a half years, he sought and researched companies that allowed their employees to fully express and develop their potential.

For this purpose, he established a set of criteria and chose 12 organizations in the USA and Europe, ranging from 100 to 40,000 collaborators, and spanning diverse sectors such as tomato processing, electric production and distribution, healthcare, and tech consulting.

From this investigation, the book Reinventing Organizations emerged in 2014. In it, Laloux introduces a conceptual framework about the evolution of organizations, detailing the stages and paradigms governing them. He outlines the limits and advancements of each stage, using a distinct color to label each paradigm: red, amber, orange, green, and teal.

A portion of the book is dedicated to describing the common patterns observed in the 12 organizations, focusing on the paradigm Laloux designated as Teal, the most recent and evolved. Offering a brief journey through the conceptual framework, it’s emphasized that there isn’t necessarily a “better” or “worse” paradigm. Each has its limits and breakthroughs and is more likely to succeed in a particular environment. A summary set in the context of adopting Agile practices can be viewed in this video.

Frederic Laloux’s Conceptual Mode


The red paradigm emerged about 10,000 years ago as people organized into tribes. It revolves around a dominant leader who exerts authority through fear, thriving in a chaotic environment. Key achievements of this paradigm are command authority, with a leader guiding the group toward a goal, and the division of labor. A fitting metaphor for this paradigm is a wolf pack. Modern examples of red organizations include the Mafia, street gangs, and tribal militias. The fragility of these structures and their short-term focus hinder their sustained success.


The Amber paradigm can be metaphorically described as an army, originating specifically in hierarchical structures like Roman armies. In this case, hierarchy is not determined by power, but by status, making Amber structures more stable than the Red ones, exerting strong control over its members. Advancements from the Red to the Amber paradigm include a long-term perspective, the establishment of stable processes, and the creation of formal roles. Public administrations, schools, and traditional religious institutions are typical examples of the Amber paradigm. These organizations thrive in a more stable environment and struggle to adapt in changing situations.


The best metaphor for the Orange paradigm is a machine, born in the age of reason, where meritocracy allows the best ideas to succeed, regardless of their author’s status. Orange organizations foster internal competition and are in constant competition with other organizations. They focus on economic value/benefit and are managed based on goals set by the organization’s top leaders. Advancements from Amber include systematic innovation, accountability of organization members (often with some flexibility in defining the strategy to achieve objectives), and meritocracy. The Orange paradigm is probably the most prevalent today, with numerous examples in large-scale companies. The limitation of Orange organizations is talent retention when members no longer align with the organization, and financial benefits or other extrinsic motivations are no longer enough to keep them.


The Green paradigm stems from the quest for greater meaning and purpose at work. The metaphor that best describes this paradigm is a family. Key features are a focus on customer satisfaction, organizational values, and a strong commitment from all individuals. Advancements from Orange include balancing stakeholder interests (e.g., customers, employees, shareholders, communities), prioritizing culture over strategy, and genuinely empowering members regardless of their hierarchical status. The Agile or Lean movements emerged within companies operating within this paradigm, with notable examples being Southwest Airlines and Ben & Jerry’s.

Green companies hit their limit when decision-making time, often based on consensus, becomes excessively long. Hierarchical structures, albeit lighter than in the Orange paradigm, clash with employee desires, especially when organizational size or factors like geographical distribution add complexity to decision-making and coordination processes. The trend is to revert to familiar practices, strengthening practices from the previous paradigm, in this case, Orange: more defined goals set by top leaders, increased control and reporting, strengthening the hierarchy, and so on. This is the first step towards talent loss.


The Teal paradigm emerges as organizations discover how to work efficiently in a self-managed manner. The best metaphor to describe it is a living system. Key features include organizing into highly adaptive and resilient structures (or “anti-fragile” to use Nassim Nicholas Taleb’s term), being guided by a shared higher purpose, and considering the input of all affected individuals in decision-making. Advancements from Green include self-management, wholeness, and an evolutionary purpose.

Self-management: Teal Organizations have found the key to operate effectively, even on a large scale, with a system that doesn’t require traditional hierarchies or consensus. This includes decision-making processes conducted by consulting those most affected by the decision, instead of relying on a top-down hierarchy or consensus.

Wholeness: Teal Organizations have developed a consistent set of practices that invite workers to reclaim their full identity as a person and allow them to carry out their work as a complete being. This is in contrast to the traditional model where the professional aspect overshadows the emotional, intuitive, and spiritual facets of an individual.

Evolutionary Purpose: It’s believed that Teal Organizations possess their own life and sense of direction. Instead of trying to predict and control the future, organization members are encouraged to listen and understand what the organization seeks to become and the purpose it aims to serve. It’s a process of continuous discovery, as well as observing the surroundings and understanding how the organization interacts with its environment.

Some of the most renowned examples of Teal companies are the Dutch Buurtzorg and the American Morning Star.

Buurtzorg is a home nursing care company founded in 2007, entirely self-managed, which has grown from 4 to 14,000 members in 10 years and boasts the highest customer satisfaction results in its segment. The company operates under a model of 1,000 autonomous, self-managed teams responsible for the entire health care process. At their headquarters, there’s a support team of 50 individuals and a team of 18 coaches ensuring support for teams that require external assistance in resolving issues or conflicts.

Morning Star is one of the world’s largest tomato processing companies, accountable for processing 40% of California’s tomato production. As of 2016, they had approximately 400 employees across their 4 factories. The company operates without managers, and workers don’t have a hierarchical superior, instead reporting directly to their peers. In 2008, Morning Star established the Self-Management Institute with the aim of researching and teaching their practices to other organizations.


Social Technologies — Sociocracy 3.0 and Liberating Structures

Next, we will introduce two sets of tools available under Creative Commons licenses, which, through very distinct objectives and scopes, offer new concrete practices in the form of patterns that can be adapted and tested in various organizational areas.

Sociocracy 3.0: Also known as S3, this is a Social Technology for developing agile and resilient organizations at any scale. Created by James Priest and Bernhard Bockelbrink in 2014, it provides an extensive collection of general guidelines and practices (around 70 patterns). These patterns have proven effective in improving performance, alignment, and well-being in organizations.

S3 is rooted in classic Sociocracy, which it modernizes by integrating Agile and Lean principles and patterns. It is built on seven fundamental principles: Transparency, Effectiveness, Equivalence, Consent, Continuous Improvement, Empiricism, and Accountability.

The 70 patterns cover various organizational areas, including work coordination, decision-making and evolution of agreements, conducting effective meetings, governance, adapting patterns to the organization’s reality, assigning roles to individuals, structuring the organization, and alignment.

S3 aims to assist organizations in discovering the best way to achieve their objectives and navigate complexity, taking small steps without the need for a radical change in the organization. It proposes:

  • To start in the area of the organization with the most pressing need, select one or more patterns to test, and proceed at the pace of the organization.
  • Regardless of an individual’s position in the organization, there will always be some useful and relevant pattern to implement and act upon.

A detailed description of all patterns is available online, and introductory courses are regularly held throughout Europe.

https://www.liberatingstructures.com/: Liberating Structures (or LS) are a set of 33 alternative structures designed to facilitate meetings and conversations. They were organized by Henri Lipmanowicz and Keith McCandless. The main goals of these structures are to foster innovation and enhance the participation, inclusion, and engagement of individuals, thereby promoting increased trust and collaboration.

The ‘menu’ with the 33 liberating structures

The 5 conventional micro-structures most commonly used in organizations and teams are presentations, managed conversations, status reports, open conversations, and brainstorming sessions.

According to Henri Lipmanowicz and Keith McCandless, the issue with these structures is that they are either too restrictive (as in the case of presentations, managed conversations, or status reports) or too unstructured (as in the case of open conversations or brainstorming sessions). On the contrary, the Liberating Structures (LS) were developed to distribute control and enable the participation of a large number of people.

The structures are available in a book, online, and on an app for iOS and Android. They are simple enough to be implemented by anyone.


We are living in an age of complexity, in an environment of constant and accelerated change. It seems clear that some of the best business management practices of the past are no longer able to lead organizations to the same successful results.

Like life forms on Earth, organizations have evolved over millennia in a continuous experiment: it is estimated that every year 50 million companies are born worldwide, 137,000 each day.

According to Frederic Laloux’s framework, in this process, significant challenges were overcome, such as the Innovation achieved by the Orange paradigm or the engagement of employees and the respective reduction of turnover rates in Green companies. There is now evidence of the emergence of the Teal paradigm and the existence of resilient organizations, capable of adapting to a dynamic environment of constant change where individuals can fully develop their potential.

In recent years, Zappos’ transition to Holacracy, a method of decentralized governance and management, has been widely discussed, especially given the fact that 20% of the employees chose to leave the company during the process.

It seems that the path towards the Teal paradigm or self-management is unique and specific to each organization, and that pre-packaged solutions rarely apply in this context. However, what does seem clear is that there are common patterns and practices that can be adapted and applied to the specific context of each organization.

It also appears evident that the Teal paradigm or self-management is not a goal that, once reached, ends: the key to its success lies in the continuous process of implementing, adapting, and constantly improving.


Article originally published in Futurizable.

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