Teal is a color, popularized by Frederick Laloux in his ground-breaking book Reinventing Organizations, it describes the latest stage of organizational development. The earlier stages include:
- Red – led by egocentric and impulsive leaders as those in mafias and street gangs.
- Amber – characterized by established hierarchies and strict rules as seen in militaries and Catholic churches.
- Orange – typically is opportunity driven and meritocracy based, usually common in American corporations and Wall Street.
- Green – has consensus driven family culture, sometimes practiced in non-profit organizations and promoted by Conscious Capitalism.
Later stage organizational structure can always deal with more complex market situations than the previous one. While many large companies and government agencies remain organized with Amber structures mixed with Orange mindset, more and more startups are adopting Teal as the most effective organizational structure for the 21st century.
As Laloux’s book mentioned, there are three breakthroughs in a Teal company relative to traditional hierarchal companies:
- Self-Management – distribute decision-making authority and accountabilities to people at execution levels.
- Wholeness – recognize, accept and support the authentic human beings behind their professional masks.
- Evolutionary Purpose – define organizational purpose beyond shareholder values to include social impact and let it evolve and unfold.
Teal companies offer employees more autonomy, trust, and respect. Their CEOs are no longer consumed by endless meetings or burdened with all decision-making responsibilities. Such companies are agile and can respond to customer needs and market changes faster. They serve purposes that benefit all stakeholders and society. The result is super happy employees, stress-free CEOs and highly profitable and fast-growing companies.
Harvard Business Review estimated that up to 20% of Fortune 1000 companies will have some elements of Teal in their organizations by 2030.
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