Frederic Laloux: Part 2 of an interview by Bob Morris

LalouxAfter I read Frederic Laloux‘s brilliant book, Reinventing Organizations: A Guide to Creating Organizations by the Next Stage of Human Consciousness, I was curious to know more about him and learned of his passionate commitment to helping leaders in almost any organization — whatever its size and nature may be — to explore fundamentally new ways of organizing resources (especially people) to achieve and then sustain excellence. One of the keys to that is creating a workplace culture within which personal growth and professional development are most likely to thrive.

Reinventing Organizations draws on two strands:

o Frederick’s deep understanding of the inner workings of organizations, which he developed among other during the years he worked as an organization and strategy consultant with McKinsey & Company

o His longstanding fascination with the topic of human development and his own joyful journey of personal and spiritual growth.

He has worked intimately with people at all levels of organizations. He has witnessed how the organizations that make up the fabric of our modern lives (large corporations and small businesses, hospitals and schools, nonprofits and government agencies) are for the most part places of quiet and pervasive suffering, places inhospitable to the deeper yearnings of our souls. The intuition that more is possible—that we must be capable of creating truly soulful organizations that invite all of our human potential into the workplace—has led him to engage into groundbreaking research: how a currently emerging, new form of consciousness is bringing forth a radically more soulful, purposeful, and productive organizational model.

Reinventing Organizations was published by Kendall Parker (February 2014). It is based on extensive research and has been variously described as “groundbreaking,” “brilliant,” “spectacular,” “impressive,” and “world-changing” by some of the most respected scholars in the field of human development.

Frederic lives in Brussels, Belgium, where he is blessed to share his life with his wife, Hélène, and their two children.

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Morris: Were there any head-snapping revelations while writing Reinventing Organizations? Please explain.

Laloux: A few. For instance, I was very aware of organizations that are values-driven, and that use this to empower people, to push decision-making as low as possible down the pyramid. This is what I was expecting to find in the organizations I was going to research. I didn’t expect for a minute to find very large organizations that didn’t just empower people, but operated entirely on self-managing principles, without layers of hierarchy!

I was still operating under the assumption that you can’t run a large organization without power hierarchy. Now, of course, I know better! I’ve come to see that hierarchy can only deal with limited complexity. And that organizations that want to cope with the increasing complexity of our world will naturally shift to more powerful mechanisms than those based on power hierarchy, of some people holding power over other people.

Another insight had to do with strategy. The current paradigm concerning strategy still made total sense to me before I did the research. In this paradigm the role of leadership is set a vision, define a strategy, and then execute that strategy. Vision, strategy, execution. How else could you do it, right?

And then I came across the leaders of some organizations that I researched who said: No, that’s bullshit (well, they didn’t quite say it that way). Vision, strategy, execution makes sense if you consider the organization to be a lifeless, inanimate entity.

If the organization is like a boat, then yes, the boat needs a captain that charts a course, and then sailors that get busy setting the sails in the right way to go in the right direction. But we don’t consider the organization to be a boat, an inanimate thing we need to direct.

We consider the organization to be like a living entity, we consider that it has its own sense of direction, its own energy, its own thing it wants to manifest in the world. So our role is not to arbitrarily set a direction. Instead, our role is to listen to the organization, listen deeply to where it wants to go. And then we dance with it to help it get there.

Morris: To what extent (if any) does the book in final form differ significantly from what you originally envisioned?

Laloux: There were a few unexpected insights, like the ones I just shared. But for the rest, the book in its final structure is very similar to what I had first sketched out on a piece of paper. Overall, the process of researching and writing this book has been surprisingly straightforward. In many ways, I felt like many things were falling in place naturally, like some forces were helping me to write the book.

Morris: In your opinion, from which organization’s reinvention can the most valuable lessons be learned in terms of do’s and don’ts? Please explain.

As you know, I have come across three major breakthroughs in how these organizations operate. Now not all organizations have stumbled upon all three of them. Buurtzorg, the Dutch nursing organization, that grew from 0 to 8,000 people in 7 years, is in my opinion the one organization that comes closest to having implemented all three breakthroughs. So they might be a particularly good source of inspiration.

But then again, it all depends on what kind of organization you are. Buurtzorg operates in an industry with a very short process. Giving a patient a shot or changing a bandage is a much shorter process than, say, designing and manufacturing hydraulics valves. So if you want to implement some of these ideas in a factory, you might find inspiration with Sun Hydraulics in Florida, FAVI in France or Morning Star in California.

An organization like Morning Star has fine-tuned the breakthrough of self-management to a wonderful degree, but hasn’t worked much on the other two. So what I’ve tried to do is to draw a picture that would be as complete as possible, using pieces of the puzzle from all the organizations I researched.

Morris: In my review of the book for Amazon US, UK, and Canada, I quote and agree with comments made by Ken Wilber in the Preface: “Frederic Laloux’s book covers all four quadrants, at least five levels of consciousness and culture, several multiple lines or intelligences, and various types of organizational structures” of what both Wilber and you view as a “new paradigm,” one that poses unique perils and opportunities for individuals as well as organizations.

Here are two questions. First, what are the defining characteristics of this “new paradigm”?

Laloux: This is a domain where many great researchers—Maslow, Wilber, Graves, Wade, Kegan— have done wonderful work. So I didn’t make any personal contribution here, I just tried to summarize their work as well as I could. In a nutshell, what they consistently found, in their research, is that for some reasons, when it comes to consciousness, humanity grows in stages, by sudden leaps. We had one such leap when humanity entered the tribal age, another when we transitioned to the agrarian age, then another when we go transitioned to the scientific age, etc. The leap that more and more people are going through right now is a particularly momentous one.

One of the key changes the scholars note is that, for the first time, we learn to tame our fears, our conscious and unconscious fears. We switch from a perspective of scarcity to a perspective of abundance. We stop to worry so much, to try and control the future, and learn to trust that somehow life is abundant. This switch helps us meet other people from a very different place. When there is less fear of judgment, we also need to judge others less. From a world of separation, we step into a world of connectedness, where we can try to reclaim wholeness with ourselves and others.

Another important change is that we start to measure our important decisions up to inner standards, not outer ones. So we look at choices we have in the light not of what success it will bring, what people will think, if it will meet group approval or if it is right by God’s standards, but by turning inside to listen what feels right, to what is aligned with what we feel called to do. I believe that this change alone will have momentous implications. For instance, our consumerist society is in large part based on looking good in the eyes of others. How much stuff do we really need if what’s driving us is what we need inside? And what will happen when more and more leaders of organizations will listen to their inner standards, and be offended that their work just serves to churn out meaningless widgets for a profit? What will happen when they demand that their work serves a noble purpose, serves to heal the wounds we’ve inflicted onto the world?

Morris: Given your response to the previous question, what is — in your opinion — the single most significant challenge that this paradigm poses to business leaders? Any advice for them?

Laloux: Why see it as a challenge? Why not see it as opportunities? (Laughs). Now, in truth, I believe it is both at once. Let’s take the notion that we go from fear to trust. All of our current managerial systems are based on fear and mistrust, if you think about it. We need hierarchy and budgets and policies and control mechanisms because really, if we don’t put pressure on people to perform, what would prevent them from simply slacking off? Now when you make the shift, as a leader, from fear to trust, somehow this whole managerial edifice will leave you with a strange taste.

Do you really need and want to control people that much? So this opens up the possibility to replace the whole managerial arsenal we are told in business school with another one, that is based on trust—and I should add smart trust, not blind trust. Now for a leader, that can be both liberating and challenging, at least at first. Because when you are fearful about something, you were able resort to the good old control mechanisms. You’ll now have to remind yourself that you no longer need to control everything, because the control is baked very effectively into peer-based systems.

Or take the switch from making decisions based on inner instead of outer standards. This might have profound implications for your organization. Say that your organization makes some stuff that get used once and then lands on a landfill. Is you listen deeply within, is that really a purpose that you and your organizations want to dedicate yourself to? These are challenging questions, for sure. But on the other hand, what a relief to finally address these questions that some part of you probably nagged you to address for a long time.

Morris: As I also indicate in my review of the book for various Amazon websites, there are dozens of passages throughout your narrative that caught my eye. For those who have not as yet read the book, please suggest what you view as the most important point or key take-away in each of these passages.

First, Changing Paradigms: Past and Present Organizational Models (Pages 13-35)

Laloux: The idea here is that humanity has made a few leaps in the course of history. Pretty much all historians, philosophers, psychologist that have looked at the question agree that people’s worldview made a fundamental shift when we went from a tribal world to the agrarian world, and then again when we got to the scientific/industrial revolution, etc.

Because of these changes in worldview, at every of these junctures, humanity invented new technologies, new means of production, new forms of government, etc. This is well known, well researched. What few people realize is that at every of these steps we also invented a new form of management, a new “organizational model.” At every stage, we developed organizations that were capable of dealing with a whole new level of complexity, and were able to achieve things that previous organizations couldn’t even imagine.

What I have researched in the book are a number of truly pioneering organizations that already operate at the next stage we are just starting to enter.

Morris: A New Metaphor: organizations as living systems (55-60)

Laloux: Every of the organizational models in the past had its own metaphor for organizations. In the tribal world, people thought of organizations as a wolf pack. You need an alpha-male that keeps everyone in line. With the agrarian revolution came the idea that a powerful organization is like an army. You need formal hierarchies, rules, and top-down control. With the scientific/industrial organization came the metaphor, which we still use much today, that a good organizations is like a machine, a well-oiled machine that transforms inputs (raw materials, people, knowledge) into outputs (products or services we sell). With the post-modern worldview, and the rise of knowledge workers, came the idea that organizations should be like a family, a group of people that come together around a set of values to achieve great things together.

Now, to a surprising degree, all the founders or leaders of the organizations of the next stage that I researched talk about their organization not as a machine, not as a family, but as a living organism, a living system. They find the clues to a new way of operating in nature, whose organisms are able to deal with complexity and change in a way that machines never could.

Morris: Self-Management (Structures) (61-97)

Laloux: This is the first breakthrough of this emerging new management model. Some organizations I researched have cracked the code to operate at large scales (hundreds, thousands or tens of thousands of employees) based on natural hierarchies rather than power-hierarchies. In these organizations, no one is the boss of anyone else, there is no more pyramid, there are no more layers of hierarchy, almost no staff functions. Instead they use different types of self-managing structures and peer based processes that prove to be much more powerful, inspiring and agile than the staid old pyramid.

Morris: Self-Management: Processes (99-141)

Laloux: When you shift from the pyramid to self-managing structures, you need to also reinvent almost all of the basic processes of management. If there is no boss, who can make what decisions? How do you deal with conflict? How decides who gets a raise and who doesn’t? In this section, I discuss how each of these processes works in self-managing structures.

Morris: Striving for Wholeness (143-192)

Laloux: This is the second breakthrough. In almost all organizations, sometimes without realizing it, employees, managers and leaders alike feel that they need to behave and show up in certain ways, and hide important parts of who they are. It’s ok to show up with our ego, to fight for a promotion or simply to win an argument in a meeting, but other aspects of ourselves feel out of place. To be caring, authentic, vulnerable, to express our deepest hopes for humanity and the planet, to let our soul really speak its truth, that feels very risky in most work places.

What the organizations I have researched have realized is that when people cut themselves off from these essential parts of themselves, they also cut themselves off from a huge part of their passion, energy and creativity. And so rather than to encourage employees to show up “professionally”, to live a “divided life” as Parker Palmer says, they have put in place wonderful practices to invite people to show up whole, in the full glory of their selfhood.

Morris: Evolutionary purpose (193-224)

Laloux: This is the third breakthrough. I’ve already touched upon this earlier in the interview. Because organizations are considered to be living systems, there is no more need to try to force the organization onto a certain course (through strategy, budgets, targets). Instead, in these organizations, people have developed a number of practices to constantly listen to where the organization is meant to go, and adapt accordingly. Rather than trying to force reality to stick to some plan we have made up, we adapt our plans constantly to reality. Out go the budgets, mid-term plans, targets and incentives. Instead come a number of wonderful soulful practices to listen collectively to where the organization’s energy is at, where it’s meant to go.

Morris: Common Cultural Traits (225-234)

Laloux: In the previous chapters, I focus a lot on the “hard” aspects of this new paradigm: the structures and practices that make these new organizations so soulful and powerful. But of course, the “soft” aspects are just as important. In this chapter, I discuss the culture of these organizations, and how one can be conscious in how to evoke powerful organizational cultures.

Morris: Starting up a Teal Organization (259-266)

Laloux: Here I discuss how people that are about to create a new organization (say a new business, a new school, a new hospital, a new nonprofit) can build it based on these new structures and practices right from the start.

Morris: Transforming an existing organization (267-284)

Laloux: Some of the organizations I researched run in traditional ways, before a new CEO took over and helped to transform it. From these cases, I draw some lessons that could be useful for leaders of existing organizations that want to do the same. How do they get started? What resistance could they expect? What should they be mindful about? How can they best help the process, and what should they be mindful in their own presence and actions?

Morris: The Structures of Teal Organizations (319-325)

Laloux: This is an appendix, actually. I discuss here in more detail the different types of structures that replace the pyramid in this new breed of organizations. Today we have only one type of structure, pretty much: the pyramid that we use for better or worse in any type of situation. In these new organizations inspired by nature, you find a broader range of structures, because the best structure depends on the environment you are in. To use an analogy, if you live in the skies, having wings and an aerodynamic shape makes a lot of sense. If you live on the ground, wings tend to be a nuisance (laughs). So here I discuss, based on the length and depth of your main business process (what in management jargon is called the value chain) which kind of structure could be most appropriate for your organization.

Morris: Of all the great business leaders throughout history, with which one would you most want to share an evening of conversation if it were possible? Why?

Laloux: Hmm, that’s interesting! There is no one that comes to mind. Somehow business leaders have never really been heroes of mine. Here is a hero of mine: Parker Palmer. He has written wonderful books (boy, would I love to be able to write as simply and evocatively as he does!) that have made a deep impression on me. He has written beautifully, for instance, about the inner life, and the journey to reclaim our wholeness. He has been particularly active in the field of education, thinking and writing about the need for teachers to examine their inner lives to serve their vocation and their students.

One of his books, The Courage to Teach, became an unexpected hit. The Fetzer Foundation approached Palmer and said they would support him if he found ways to bring this work into the world. He developed a two-year program consisting of a number of retreats for teachers to find the space to examine their inner lives and their vocation, and the results have been extraordinary. The program goes to wonderful levels of depth, and rekindles teacher’s vocation in ways I believe to be unprecedented.

By now, Parker’s “Center for Courage & Renewal” has trained 150 facilitators, and 50,000 teachers have already experienced this transformational program. There are now similar programs for doctors, for clergy and for business leaders. I find this quite extraordinary. These programs manage to bring great depth to a great number of people, to serve both quality and quantity. Now Parker Palmer might not the kind of person we think about when we talk about a great business leader in history, but his work inspires me in ways that the accomplishments of a Jack Welsh or a Steve Jobs don’t, whatever their enormous qualities as leaders. I truly believe that people like Parker Palmer help us usher in better times, help us in this transition of consciousness that we need.

Morris: Let’s say that a CEO has read and then (hopefully) re-read Reinventing Organizations and is now determined to establish or strengthen a workplace culture within which personal growth and professional development are most likely to thrive. Where to begin?

Laloux: Where his or her passion lies. With whatever he or she wants to do first. You know, from the machine paradigm, we have inherited the idea that we can and need to plan change carefully, that we need a full blueprint before we go about any change. In this new way of approaching things, we come to realize and accept that there are real limits to what we can foresee and plan. The world is just too complex, and our organizations are just too complex. That’s why so many change efforts fail. We fall in love with our plans, and believe that reality will be so kind as to conform to them.

So now, when I work with leaders who feel called to go down this road, I invite them to first read carefully about these organizations that I researched, and sit with their impressions of what’s possible for a while. And then I invite them to listen to where there energy is at, what change they feel the organizations most needs. Then they can start by changing that one thing, and see how the organization (remember, it’s a living system) responds. And then they can change something else. Of course, some things make more sense than others at first, and sometimes you should be careful by not taking out one piece without adding another, or you’ll make your life needlessly difficult. I tried to cover some of that thinking in the later parts of the book. But really, these are just guidelines, common sense rules. The most important is to listen to where the energy is at, to what you feel the organization wants and needs. The good news from the research is this: if the CEO really wants this transformation to happen, its going to happen no matter what, and it can go much faster than you might anticipate. So many people in the organization are longing for this!

Morris: For more than 25 years, it has been my great pleasure as well as privilege to work closely with the owner/CEOs of hundreds of small companies, those with $20-million or less in annual sales. In your opinion, of all the material you provide in Reinventing Organizations, which do you think will be of greatest value to leaders in small companies? Please explain.

Laloux: Oh, I guess that really depends on the specific character and circumstances of every leader, as well as the industry they operate in. But if I try to generalize, it might be this: leaders in smaller organizations often don’t have a great number of senior managers and heads of staff functions as large organizations. A lot rests on their shoulders. This is both exhilarating and exhausting. For them, the change to this new model can be a huge relief, because it helps people even at the “lowest” level in the organization become much stronger contributors. The CEOs will suddenly have time to do much more creative work again, instead of just holding the system together.

Morris: Which question had you hoped to be asked during this interview – but weren’t – and what is your response to it?

Laloux: It would be this: “How can readers of your book get involved and participate?” And this would be my answer:

Many readers have told me they resonate deeply with this book, that the book speaks to something they have felt for a long time, but didn’t know that it existed. Because of this, something happened that I didn’t anticipate, but that I welcome full heartedly. It is that some readers have really taken ownership of the book and its insights. Many coaches and consultants have integrated the book’s content in their consulting or training offering. That’s wonderful! Other readers have given talks about the book. I live a pretty simple life and don’t travel much, so I’m glad other people do some of my talking (laughs). One reader has offered to create an audiobook version. An illustrator has offered to help me create a visual, introductory version of the book. A business school has offered to create a 3-day experiential seminar based on the book and to open source it to other business schools! Readers in countries ranging from the Brazil, Hungary, the Netherlands to Taiwan have asked me if they could contact local publishers for a translation. I could go on with examples like these for a while.

I feel so very blessed that many people resonate with these ideas and spontaneously step forward to help me spread them in the world. I guess that the traditional way to go about all this would be for me to try and trademark some concepts, then create a course where I train people and then license the possibility for people to claim this work in talks, workshops, and consulting offers.

But somehow I cannot be bothered with setting this up. If you want to use the insights from the research, then by all means, do it. If you earn money in process, that’s great for you. And if you want to gift something back to me, that’s very welcome. You don’t have to, but it’s welcome. I much prefer this than trying to control and license how people use these ideas. I mean, these ideas are not mine, really. They come from the pioneering organizations I researched.

I would actually claim they come from an even broader source, that they are ideas that are in the air, that are waiting to emerge. So to “your” question, how can readers participate? In any way they want! The world needs more conscious, more powerful, more soulful, more purposeful school and hospitals, businesses and non-profits. If you feel you can play a part in this, than please joins us!

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To read Part 1, please click here.

Frederic cordially invites you check out the resources at these websites:

Reinventing Organization’s website link

Amazon link

Integral Life conversation with Ken Wilber link

LinkedIn link

YouTube link

Tony Schwartz review in New York Times link

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