Let’s be real about Teal – or how we tried to switch to a Self Managed Organization

+ Let’s be real about Teal – or how we tried to switch to a Self Managed Organization
green board with white letters

Teal is a new color in the rainbow spectrum of color coded organization typology. Teal, or Self-Managed Organization is a new way to manage your company. And once we heard about this concept, we had to learn more.

They say that Teal is a new big thing in organization management but it is not as new as it sounds. It was already successfully integrated and used by multiple companies of all sizes and types, among which you can find names such as PatagoniaZappos or Morning Star.

Our first big inspiration and way to dip our toes into the Teal world started by reading a book from Frederic Laloux called Reinventing Organizations. And while there is tons to say and learn about the concept of Self Managed Organizations, this article will focus more on our personal experience and how we approached and experienced Teal, rather than generic theories and practices. If you wish to learn more about the concept itself, search for the following keywords that will give you a good starting point:

  • Teal organization
  • Teal management
  • Self managed organization
  • Reinventing organizations
  • Holacracy
  • Zappos self managed teams

Spoiler alert – we didn’t end up enrolling into Teal organization in Pastilla (yet) but we strongly believe in its principles and we try to incorporate Teal mind-set into our processes all the time.

It’s not anarchy. There are rules to the game.

When we first introduced the Teal concept into bigger company circles there were different reactions. Some people got excited, some people stared at us blankly and some called us straight crazy. Among the biggest criticisms was that this is anarchy and it can never work. After we dissected this emotion, we came to realize that some people are worried how they will get their colleagues to do what they need them to do when suddenly there are no bosses and no hierarchy to enforce the power.

And here comes the first, very important plot twist – there is still hierarchy, people still are responsible for their work and they still need to play nice with others. But at the same time motivations change – we start doing things because we believe in them, and because we understand they are the best decisions at a given time. We recognize the authority we chose to give to people instead of authority inherent in the structure itself. We allow others to do what they want to do, understanding their decisions are made after full consideration of pros and cons, and they are fully capable of realizing their responsibilities and we can trust them to act on it.

Every game has its rules and Teal reminds us of a strategic game. We used to say, when prepping for a tactical or governance meeting that we are going to “play Teal” now. And when “Teal” is the name of the game, there are various rule sets that you can adopt. From pre-defined rules to making your ones, it’s up to you how you decide to play Teal. In our company we picked Holacracy as it was one of the best documented and supported concepts out there. We supported it with the Holaspirit platform (as compared to more popular GlassFrog software) for mostly economical reasons. We opted for self-education and tried to switch to a self managed organization on our own, without any professional help or coaching. This is a complicated and long process. We spent a few months reading and learning and practicing rules in a small group and then months trying to train the rest of the company.

We faced many challenges along the way, among the biggest were misunderstandings of the concept, and different interpretations of the rules and processes. Also we realized that even if there is a lot written about Teal and Holacracy (in fact, Holacracy will give you 20+ pages of game rules called Constitution) there are a lot of blank spaces and grey areas that you need to figure out for yourself. If you are a company owner and thinking about trying to switch to a self-managed organization, we strongly recommend hiring professional coaches or at least get in touch with somebody with direct experience in enrolling and leading such a type of organization.

So yes, there is a steep learning curve to go Teal, but the good news is, once you grasp the rules and basic concepts it will become fun and easy. The Teal mind-set will become part of you and part of how you think and act. You will feel the need to define roles and responsibilities, assign people into roles, form and guard your circles, take one tension at the time, facilitate meetings for better clarity and so on.

What we realized very quickly is that Self Managed Organizations rise and fall based on their people. No matter what game rules you use, people need to be fully on board and capable of playing the game. Also, it is very crucial to select the right people for the roles and to be able to trust them to act in the best interests of the company. Let’s look at these two claims a bit closer.

The cruel and sad reality of switching into a Teal organization is that not everybody will “survive” it. Not everybody is built to self manage and take full responsibility or to trust others that they will do what’s best for the whole company. Not everybody can let the power go and avoid managing other roles and people. And while you want to give your people the best chance to adapt and you recognize this is a long term process that can take months or even years with ongoing training and coaching and motivation is needed, at the same time you need to accept that sometimes letting go is the best for both sides.

Hand in hand with this comes hiring new people. Every new hire you make after you decide to go, Teal, has to be Teal compatible, no compromises. So even before you start rolling out any big changes, think about how to structure your hiring process to make sure you are getting the best people for the Teal concept. Hiring and training will become your Rubicon – the most essential part of the process for a successful transition into Teal structure. Give it proper consideration and time, this will be your single strongest and weakest point in the company. And if you ask how to properly hire and train people into Teal company? Ha, that’s what you need to figure for your company on your own. We haven’t found any well-documented sources that would give us easy answers for this one.

There is freedom to fail

After you have the best people, it is critical to allow them to freely act within their roles. Trust is essential and it will need to come from the top. Your top management will need to be fully onboard with the transition to Teal structure and be ready to let go, decentralize and trust. Even when you are a CEO and you fully believe in the Teal concept you will find out that this will be keeping you awake during the night for a while. Not only will you need to let go, you will need to proactively ensure your employees have full freedom to succeed but also the freedom to fail. You will need to let people jump off the cliff and take your company with them believing that they have a good parachute and after the short drop this will take you soaring into the skies. Meditate on it and be ready. Practice breathing exercises and again, hire people you can trust so you don’t need to lock yourself in an ashram for months.

In Teal, we believe people need to be able to make their own decisions even at the expense of failing. We don’t only allow them to do so, we encourage them to act without fear of failing. This is how we build mutual trust, how we let people act on their strong suits and empower them to rise to their best potential. Holacracy game rules make sure for us that we limit major risks for the company itself while opening doors for new opportunities and successes. So pay close attention to how you set up the structure from the very beginning. It all starts with Anchor Circle where you will need to make 2 important decisions:

  • Should the Anchor circle have its own Lead Link or will it be led by the governance of its core members? One of the Lead Link’s main responsibilities is to assign people into other key roles. If you worry that top management will have a hard time letting go, governance might be a better approach for your Anchor Circle as you will show that you are ready to empower other people from the start.
  • How to best define the purpose for Anchor Circle? The purpose will define the direction of your whole company. Take time to define it carefully, think about it as something that should motivate the rest of the company to strive towards the same goals.

Once you have your Anchor Circle created, follow the same principles for every sub-circle you will create down the line. Make sure that everybody understands the concept and is ready to apply it. And once you are ready, step back and let go.

Let’s talk about money

So you have your circles setup, roles defined, people assigned into roles and then it comes – question how to make sure we don’t burn too much money and time on playing Teal and the company can stay profitable (or at least to survive comfortably if you are a non-profit). There will be a point when you will need to face this question internally within your company. And as it is always in Teal, you will need to figure this one out for yourself. Here are a few things to keep in mind along the whole journey:

  • Whatever plan you come up with, make sure you are not limiting anybody’s ability to act within their role, make decisions and follow their purpose and accountabilities.
  • Try to not put any limitations on how much time people can spend acting within their roles. Trust that they are able to make the best decisions including how to approach their role and how to benefit the company.
  • Remember that nobody should be seeking any approval to act within their role on their purpose and accountabilities (unless they are about to interact with other roles’ or circles’ domains). So when it comes to money, give them the ability to allocate budgets without the need to get approval for their actions, decisions or projects.
  • Allow as much financial transparency as possible for the stage of transformation you are in, so roles can have access to relevant information to make educated decisions.
  • For circles and roles, whenever possible, define metrics and review them with relevant roles frequently.

Live. Learn. Evolve.

So after all this talk, you might ask where our company is on the Teal spectrum. Well, we spent a couple of years figuring out the Teal game, we tried to integrate it within a small group but we never reached the full transformation yet. This is an ongoing journey and needs time to learn, integrate, grow and maintain. I imagine this transformation might be easier for new companies that can set their Teal processes from the start rather than established companies that need to re-configure the existing structures step by step. 

However, we are happy we started the journey and we recognize how it helped us so far. There is a new mindset that is helping us to enable our teams. We realize the power of individual talents and we try our best to give them space to grow and act on their strengths. We believe in freedom and empowerment. Teal gave us a toolset to approach problems more efficiently. Holacracy gave us the structure to govern and facilitate better. One day, we hope we will be ready to connect the dots and color ourselves in Teal colors once and for all.