Human Resources Human Resources Advance praise for Reinventing Organizations “Ground-breaker! Game-changer! Brilliant! The most exciting book I’ve

Human Resources 

Advance praise for Reinventing Organizations

“Ground-breaker! Game-changer! Brilliant! The most exciting book I’ve
read in years on organization design and leadership models. Sustain-
ability? Employee engagement? Innovation? This elegant, parsimo-
nious way of working realizes those aspirations effortlessly while
exceeding traditional bottom-line measures and infusing heart and
spirit into work without gimmicks. Like a Zen practice, learning to do
less takes discipline, and this book shows how letting go gives back—
to you, your organization, your stakeholders, and the world.”

—Jenny Wade, Ph.D., Author of Changes of Mind

“People have long asked me what a “5th order,” or “high stage” organiza-
tion would look like in the flesh. Frederic Laloux’s richly researched
book is the closest anyone has come, as yet, to answering this
question. This is a stimulating and inspiring read!”

— Robert Kegan, Harvard University’s Meehan Professor of
Adult Learning, and author of In Over Our Heads

“A book like Reinventing Organizations only comes along once in a
decade. Sweeping and brilliant in scope, it is the Good To Great for a
more enlightened age. What it reveals about the organizational model
of the future is exhilarating and deeply hopeful.”

—Norman Wolfe, Author of The Living Organization

“A comprehensive, highly practical account of the emergent world
view in business. Everything you need to know about building a new
paradigm organization!”

—Richard Barrett,
Chairman and Founder of the Barrett Values Centre

“Frederic Laloux has done business people and professionals every-
where a signal service. He has discovered a better future for organi-
zations by describing, in useful detail, the unusual best practices of
today.”

—Bill Torbert, Author of Action Inquiry

“Frederic Laloux’s ‘Teal Organization’ is as close a model to what I
call a ‘conscious organization’ as I have seen—an organization and a
culture that not only thrives in the unfolding paradigm of collective
thought but helps in the unfolding. It could serve as the mid-wife for
a new worldview that will allow humankind to consciously evolve to
a level where the world works for everyone.”

—John Renesch, futurist, founder of FutureShapers, LLC and
author of 14 books, including The Great Growing Up

“As the rate of change escalates exponentially, the old ways of organ-
izing and educating, which were designed for efficiency and repeti-
tion, are dying. Frederic Laloux is one of the few management leaders
exploring what comes next. It’s deeply different.”

—Bill Drayton, Founder, Ashoka: Innovators for the Public

REIN VEN TIN G

O RG AN IZATIO N S

A G u i d e t o C r e a t i n g O r g a n i z a t i o n s
I n s p i r e d b y t h e N e x t S t a g e

o f H u m a n C o n s c i o u s n e s s

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Frederic Laloux

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Copyright © 2014 by Frederic Laloux.

First edition.

All rights reserved. No parts of this book may be used, reproduced, stored in or
introduced into a retrieval system, or transmitted, in any forms, or by any means
(electronic, mechanical, photocopying, recording, or otherwise) without written
permission of the publisher, except in the case of brief quotations embodied in
critical reviews and certain other noncommercial uses permitted by copyright
law.

Please purchase only authorized electronic editions, and do not participate in or
encourage electronic piracy of copyrightable materials. Your support of the
author’s rights is appreciated.

Published by NELSON PARKER.
Nelson Parker is a trademark of Unfolding sprl.
54 Serbia Street, Brussels 1190, Belgium

Quantity sales: Special discounts are available on quantity purchases of the
electronic format of this book. For details, contact the publisher.

This book is published in a variety of book formats. Some material included with
standard print versions of this book may not be included in the electronic
format.

Printed on acid-free paper, partially sourced from recycled waste material.

TABLE!OF!CONTENTS!

Foreword ix
Introduction: the emergence of a new organizational model 1!

Part!1!1!Historical!and!Developmental!Perspective! 11!
1.1 – Changing paradigms: past and present organizational models 13!
1.2 – About stages of development 37!
1.3 – Evolutionary-Teal 43!

Part!2!1!The!Structures,!Practices,!and!Cultures!!
of!Teal!Organizations! 53!
2.1 – Three breakthroughs and a metaphor 55
2.2 – Self-management (structures) 61
2.3 – Self-management (processes) 99
2.4 – Striving for wholeness (general practices) 143
2.5 – Striving for wholeness (HR processes) 173
2.6 – Listening to evolutionary purpose 193
2.7 – Common cultural traits 225

Part!3!1!The!Emergence!of!Teal!Organizations! 235!
3.1 – Necessary conditions 237!
3.2 – Starting up a Teal Organization 259!
3.3 – Transforming an existing organization 267!
3.4 – Results 285!
3.5 – Teal Organizations and Teal Society 293

Appendices! 307!
1 – Research questions 309!
2 – Beyond Evolutionary-Teal 315!
3 – Structures of Teal Organizations 319!
4 – Overview of Teal structures, practices, and processes 327!

Notes 333!
Selected readings 347!
Index 351
Gratitudes 359

INDEX!OF!KEY!STRUCTURES!AND!PRACTICES!

Structure!
Organizational structure 65, 67, 69, 319
Staff functions 71
Project teams / Task forces 83, 89
Board / Ownership 251, 300

Human!resources!
Recruitment 160, 174, 219
Onboarding 176
Training and coaching 178
Team building 147, 154, 159
Working hours 181
Job titles / Job descriptions 90, 180
Objectives / Target setting 212
Feedback / Performance management 123, 125, 183
Compensation 129
Promotion / Job rotation 114, 180
Dismissal 126, 187

Daily!life!
Office spaces 86, 146, 167
Meetings 162
Decision-making 99, 103
Conflict resolution 112, 165
Information flow 110, 216
Culture / Values 147, 151, 225
Community building / Reflective spaces 154, 159

Major!organizational!processes!
Purpose / Strategy 195, 199, 202, 207
Innovation / Product development 208
Sales / Marketing 208, 212
Purchasing / Investments 106
Budgeting / Controlling 80, 209
Financing / Funding 251
Environmental and social management 169
Change management 103, 214

Foreword ix

FOREWORD!

This is a very important book, deeply significant in many ways, as
much for the pioneering research, insights, guidelines, and suggestions
that it makes as for the many equally important questions and issues
that it raises. It is, without doubt, on the leading-edge of a type of work
we are seeing more and more of at this time: namely, that concerned
with the extremely profound changes in consciousness, culture, and
social systems that we are seeing emerge, in increasing numbers, at this
point in human (and, indeed, cosmic) evolution. Frederic Laloux’s work
focuses specifically on the values, practices, and structures of organi-
zations—large and small—that seem to be driven by this extraordinary
transformation in consciousness occurring around the world. He offers a
very detailed and practical account—what amounts to a handbook,
really—for people who feel that the current management paradigm is
deeply limiting and yearn to bring more consciousness to the way we
run organizations but wonder if it is possible and how to do it.

The book is highly practical, but don’t be mistaken: it is solidly
grounded in evolutionary and developmental theory. Books describing
the broader transformation of consciousness, not just in organizations
but in society, have appeared for at least three decades now, going back
to such pioneering works as The Aquarian Conspiracy, The Turning Point,
The Greening of America, and so on. But there is a major, indeed profound,
difference: development studies continue to indicate, with increasing
certainty, that what has generally been thought of as a single major
transformation in consciousness and culture in the last four or five
decades actually contains two major transformations, emerging
successively, and known variously as pluralistic and integral,
individualistic and autonomous, relativistic and systemic, HumanBond
and Flexflow, green and teal, and order 4.5 and order 5.0, among many
others. And, as developmentalists are increasingly discovering, these
two transformations are simply the latest two in a long line of
consciousness transformations that, slightly modifying the terms of Jean
Gebser, for example, are called Archaic, Magic (Tribal), Mythic

x Reinventing Organizations

(Traditional), Rational (Modern), Pluralistic (Postmodern), and Integral
(Post-postmodern).

Each of these stages of development occurred to humanity as a
whole, and repeats itself in essentially basic ways in individuals today,
with everybody starting at stage one and proceeding essentially up to
the average level of development in his or her culture (with some
individuals lower, some higher). Each of these general stages has a
different set of values, needs, motivations, morals, worldviews, ego
structures, societal types, cultural networks, and other fundamental
characteristics. The two basic transformations that I referred to above are
the last two in the series: the Pluralistic stage, emerging in the 1960s and
marking the beginning of Postmodernism, and more recently (and still
much more rarely) the Integral stage, newly emerging, and marking the
beginning of the phase—whatever it may turn out to be—that is moving
beyond Postmodernism and its basic tenets.

The profound difference I was alluding to is this: most earlier
books heralding a transformation of society speak from a Postmodern
perspective, and have a rather simplistic view of human evolution.
Laloux’s book speaks from an Integral perspective and is grounded in a
sophisticated understanding of evolutionary and developmental theory
and what in Integral theory is called AQAL (all quadrants, all levels).

Postmodernism, as the name suggests, is that general phase of
human development that came after, and in many cases strongly
criticized, the previous general phase of Modernism, which began in the
West with the Renaissance and then fully blossomed with the
Enlightenment—the “Age of Reason and Revolution.” What Enlight-
enment’s modernity brought to the scene was a move beyond the pre-
vious mythic-literal, religious, traditional era of development—where
the Bible was the one source of literal, uncontested truth; humanity had
one, and only one, savior; and “no one comes to salvation save by
through the Mother Church,” whose dogmas delivered truth on all
subjects, artistic to normative to scientific to religious. With the
Enlightenment, representative democracy replaced monarchy; freedom
replaced slavery (in a 100-year period, roughly 1770-1870, every rational-
industrial society on the planet outlawed slavery, the first time this had
ever happened to any societal type in human history); the experimental
modern sciences replaced the revelatory mythic religions (as sources of
serious truth); and what Weber called “the differentiation of the value
spheres” (the differentiation of art, morals, and science, so that each
could pursue its own logic and its own truths outside of their fusion in
the dogma of the Church; where the Churchmen refused to even look
through Galileo’s telescope, researchers by the hundreds and eventually
thousands began to do so, with an explosion in all of what are now
referred to as the “modern sciences”—geology, physics, chemistry,
biology, psychology, sociology).

Foreword xi

So successful were the modern sciences that the other major
domains of human existence and knowledge—from artistic to moral—
began to be invaded and colonized by scientism (the belief that science,
and science alone, can deliver any valuable truth). The “dignity of
modernity” (the differentiation of the value spheres) soon collapsed into
the “disaster of modernity” (the dissociation of the value spheres),
resulting in what Weber also famously called “the disenchanted
universe.”

Such was the state of affairs for some 300 years—a mixture of
great advance and stunning discoveries in the scientific arena,
accompanied with a reductionism and scientific materialism that
rendered all other fields and areas as defunct, outmoded, childish,
archaic. “Social Darwinism”—the notion of the survival of the fittest
applied to all aspects of human existence as well—began to insidiously
invade all the humanities, ethics, and politics of humans, including the
two major new economic systems, capitalism and socialism. Scientific
materialism—the idea that all phenomena in the universe (including
consciousness, culture, and creativity) could be reduced to material
atoms and their interactions, which could be known only by the
scientific method—and the generally liberal politics that accompanied
such beliefs, set the stage for the next three centuries.

Until the 1960s, when not only the reign of scientific materialism
was challenged (as being itself largely a cultural construction, not some
deified access to universal truths), but also all of the remaining
indignities of the Mythic-religious era (some of which were addressed
by Modernism, and some of which were exacerbated by it)—indignities
such as, overall, the oppression of women and other minorities, the toxic
despoliation of nature and the environment, the lack of evenly applied
civil rights, the general reign of materialism itself—all were aggressively
attacked, and attempted to be remedied, by Postmodernism. What
developmentalists have discovered about this new emergence is that it
was driven, in large measure, by the emergence of a new and more
developed stage of human unfolding (variously referred to as pluralistic,
individualistic, relativistic, postmodern). This is not to say that
everything Postmodernism pronounced was therefore true, only that it
was based on a mode of thinking that was more complex, more
sophisticated, more inclusive, and included more perspectives than the
typical formal rational structure of the Modern era (and the Modern
stage in today’s individual development).

This new, more inclusive stage of development drove the first
wave of books maintaining that “there’s-a-great-new-paradigm-and-
major-consciousness-transformation” now underway. These books,
which began to emerge in the 1970s and 1980s, and a few of which I
already named, usually had a very conspicuous diagram with two
columns—one was the “Old Paradigm,” which was “analytic-divisive,”

xii Reinventing Organizations

“Newtonian-Cartesian,” “abstract-intellectual,” “fragmented,” “mascu-
line,” and which was the cause of literally all of humanities’ problems,
from nuclear war to tooth decay, and then another column, the “New
Paradigm,” which was “organic,” “holistic,” “systemic,” “inclusive,”
and “feminine,” and which was the source of a radical salvation and
paradisiacal freedom from virtually all of humanity’s ills. What’s more,
these two choices—old paradigm and new paradigm—were the only
basic choices humanity had. Its earlier stages (e.g., tribal) were simply
earlier versions of the new paradigm, which was repressed and
destroyed by the aggressive Modern version of the old paradigm.

In large measure, these books were simply boomer writers
documenting the transformation that they had just been a part of—
namely, where, to the remains of the Magic, Mythic, and Rational
paradigms still in existence to varying degrees, was added the
possibility of the newly emergent Post-Rational or Postmodern
paradigm, to which the boomers were the first major generation to have
access (today in Western cultures, the Pluralistic/Postmodern stage
makes up around 20 percent of the population, with 30 to 40 percent still
Modern/Rational, 40 to 50 percent Mythic, and 10 percent Magic).

All of these early books had several things in common. By
dividing humanity’s choices into just two major ones—old and new
paradigms—they blamed all of humanity’s ills on nothing but
Modernity and the Enlightenment paradigm, severely distorting the
actual situation, which is that a majority of the really nasty cultural
problems faced by humanity are the result of the Mythic-literal
structure—from ethnocentric “chosen peoples,” to female oppression, to
slavery, to most warfare, to environmental destruction. In some cases,
Modern technology was added to those Mythic motivations, thus
making them more deadly (e.g., Auschwitz—which was not the product
of Modern worldcentric morals, which treat all people fairly, regardless of
race, color, sex, or creed, but Mythic ethnocentrism, which believes in out-
groups of infidels and in-groups of “chosen peoples,” and in which
infidels, lacking souls, can be murdered or killed, and jihad in one form
or another—from missionary converting to outright crusades—is the
order of the day). In many cases, Modernity was in the process of ending
these Mythic ethnocentric insults (such as slavery, and using a specific
Modern attitude of tolerance, a previously quite rare value), but
Postmodernity blamed Modernity (and rational Enlightenment values)
for all of it, thus, in many cases, making matters considerably worse.

But in other ways, Postmodernity, with its own higher
perspectives, brought not only advances in the sciences, but gave equal
emphasis to virtually all other disciplines as well (sometimes going
overboard, and claiming that no truth at all was possible, only various
interpretations, so of course all disciplines should be included). And in
its drives for civil rights and environmentalism and gay/lesbian rights

Foreword xiii

and rights for the disabled, the higher moral fabric at least possible with
a higher stage of development came clearly to the foreground. It was
these advances that all the “new paradigm” books were celebrating.
Who can blame them for getting carried away, and assuming the whole
world was headed into this Pluralistic phase, this “new paradigm,”
instead of seeing that that phase was simply the fourth or fifth major
transformation in human history and would simply take its place
alongside the others, not completely replace them? It still shared many
characteristics with its predecessors—all of which, together, Maslow
would say were driven by “deficiency needs” and Clare Graves’
followers would call “first tier.”

But developmentalists of the time began noticing something
initially perplexing, and then outright astonishing: among those that
developed to the Postmodern/Pluralistic stage, a small percentage (two
or three percent) began to show characteristics that were literally
unprecedented in human history. Graves called the emergence of this
even newer level “a monumental leap in meaning,” and Maslow referred
to it as the emergence of “Being values.” Where all the previous stages
(Magic, Mythic, Rational, and Pluralistic) had operated out of a sense of
lack, scarcity, and deficiency, this new level—which various researchers
began calling “integrated,” “integral,” “autonomous,” “second tier,”
“inclusive,” “systemic”—acted out of a sense of radical abundance, as if
it were overflowing with goodness, truth, and beauty. It was as if
somebody put a billion dollars in its psychological account, and all it
wanted to do was share it, so full it was.

And there was something else about it, too. Where all the first-tier
stages felt that their truth and values were the only real truth and values
in existence—all the others were mistaken, wrong, infantile, or just
goofy—this new Integral stage somehow intuited that all of the previous
value structures were true and important in their own ways, that all of
them had something to offer, that all of them were “true but partial.”
And thus, as much as the Postmodern/Pluralistic stage wanted to see
itself as being “all-inclusive,” it still essentially abhorred Rational and
Mythic values; but the Integral stage actually did include them, or
embrace them, or make room for them in its overall worldview. It was
the emergence, for the first time in history, of a truly inclusive and non-
marginalizing level of human consciousness. And this, indeed, would
change everything.

Slowly, but with increasing speed, a whole second generation of
“new paradigm” books began to emerge. These included such early
pioneers as James Mark Baldwin and Jean Gebser, but then, more
recently, books by philosophers, psychologists, and theologians such as
Jürgen Habermas, Abe Maslow, Bede Griffiths, Wayne Teasdale, Allan
Combs, and my own work, to barely scratch the surface. Unlike the first
wave of new paradigm books, this second wave had a much more

xiv Reinventing Organizations

sophisticated psychological component, including at least four or five
stages of development, sometimes nine or 10 (but certainly more than
two, the “old” and “new paradigm,” as the earlier wave had it); and—in
addition to those developmental levels, a series of developmental lines,
or multiple intelligences that moved through those levels (such as
cognitive intelligence, emotional intelligence, moral intelligence, kines-
thetic intelligence, spiritual intelligence, and so on). They also found
room for an integration of science and spirituality—not reducing one to
the other (nor seeing all spirituality as explainable by quantum
mechanics or brain neuroplasticity; nor seeing all science as reducible to
a mystical ground; but both science and spirituality being irreducible
domains of major importance). And they all saw the first wave of “new
paradigm” books as describing essentially the Postmodern/Pluralistic
stage, and not a genuine Integral/Systemic stage.

Frederic Laloux’s book belongs clearly to this second wave of
books. But that is not its major claim to significance. We have been
seeing, for the last decade or two, books increasingly focusing on
business and some sort of “new paradigm” (mostly still first-wave
books, but increasingly some second-wave books as well). But more than
any other book that I am aware of, Laloux’s work covers all four quad-
rants (to be explained later), at least five levels of consciousness and
culture, several multiple lines or intelligences, and various types of
organizational structures, moving from Magic to Mythic to Rational to
Pluralistic to Integral—and, of course, focusing on the last and most
recent emergent, that of the Integral stage, and a sophisticated and fairly
detailed description of the business organizations that seem built around
Integral-level characteristics, including individual worldviews, cultural
values, individual and collective behavior, and social structures,
processes, and practices. This makes it a truly pioneering work.

A brief explanation of “quadrants, levels, and lines” is perhaps in
order. As Laloux indicates, these technical aspects are taken from my
own Integral Theory, which, as the result of a cross-cultural search
through hundreds of premodern, modern, and postmodern cultures and
the various maps of human consciousness and culture that they have
offered, has come up with what might be thought of as a
“Comprehensive Map” of human makeup, which was arrived at by
putting all of the known maps together on the table, and then using each
one to fill in any gaps in the others, resulting in a comprehensive map
that is genuinely inclusive of the basic dimensions, levels, and lines that
are the major potentials of all humans. There are five basic dimensions in
this Framework—quadrants, levels of development, lines of develop-
ment, states of consciousness, and types.

Quadrants refer to four major perspectives through which any
phenomenon can be looked at: the interior and the exterior in the
individual and the collective. These can introductorily be indicated by

Foreword xv

the pronouns often used to describe them: the interior of the individual
is an “I” space (and includes all the subjective thoughts, feelings,
emotions, ideas, visions, and experiences that you might have as you
introspect); the interior of a collective is a “we” space (or the inter-
subjective shared values, semantics, norms, ethics, and understandings
that any group has—its “cultures” and “sub-cultures”); the exterior of an
individual is an “it” space (and includes all the “objective” or “scientific”
facts and data about your individual organism—one limbic system, two
lungs, two kidneys, one heart, this much dopamine, this much serotonin,
this much glucose, and so on—and includes not only “objective”
ingredients but behaviors); and the exterior of a collective, which is an
“its” space (and includes all the interobjective systems, processes, syntax,
rules, external relationships, techno-economic modes, ecological systems,
social practices, and so on).

Not only all human beings, but all their activities, disciplines, and
organizations can be looked at through this four-quadrant lens, and the
results are always illuminating. According to Integral Theory, any
comprehensive account of anything requires a look at all of these
perspectives—the first-person (“I”), second-person (“you” and “we”),
and third-person (“it” and “its”) perspectives. Most human disciplines
acknowledge only one or two of these quadrants and either ignore or
deny any real existence to the others. Thus, in consciousness studies, for
example, the field is fairly evenly divided between those who believe
consciousness is solely the product of Upper-Right or objective “it”
processes (namely, the human brain and its activities); while the other
half of the field believes consciousness itself (the Upper-Left or
subjective “I” space) is primary, and all objects (such as the brain) arise
in that consciousness field. Integral Theory maintains that both of those
views are right; that is, both of those quadrants (and the other two
quadrants) all arise together, simultaneously, and mutually influence
each other as correlative aspects of the Whole. Trying to reduce all of the
quadrants to one quadrant is “quadrant absolutism,” a wretched form of
reductionism that obscures much more than it clarifies; while seeing all
of the quadrants mutually arise and “tetra-evolve” sheds enormous light
on perpetually puzzling problems (from the body/mind problem to the
relation of science and spirituality to the mechanism of evolution itself).

Laloux carefully includes all four quadrants and a detailed
description of each as it appears in different organizational types,
focusing, again, on the pioneering or Integral stage. As he puts it, “The
four-quadrant model shows how deeply mindsets [Upper-Left or “I”],
culture [Lower-Left or “we”], behaviors [Upper-Right or “it”], and
systems [Lower-Right or “its”] are intertwined. A change in any one
dimension will ripple through all the others.” He goes on to point out
that Mythic and Modern theories of organization focus on “hard”
exterior facts (the two Right-hand quadrants), and the Postmodern

xvi Reinventing Organizations

introduced the interiors of mindsets and culture (the two Left-hand
quadrants)—while often going overboard, as Postmodernism in general
did, and claimed that only culture was important. Only Integral
organizations deliberately and consciously include all four quadrants (as
Laloux’s book itself is one of the very few to include all four quadrants
in its research). Many Integral writers, while fully aware of all the
quadrants, focus on the Left-hand quadrants of levels of consciousness
and worldviews, and leave out the Right-hand quadrants of behaviors,
processes, and practices necessary to help the emergence of Integral Left-
hand dimensions. Laloux points out, for example, that Integral organiza-
tional culture (Lower-Left “we”) is enacted particularly by Integral role-
modeling from those in the organization with moral authority (from the
Upper quadrant), and, from the Lower-Right or “its” quadrant,
supportive structures, processes, …

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