Monday, August 10, 2020

Our Webinar series to evolve capital markets: "Evolving Impact Investing to meet Today's Challenges in Every Community"

I produced a series of webinars in July, the following episodes are the first five of a number of other topics to be covered. You can review the videos of each of our engaging discussions in the links below. You will be required to register to view the videos, and your email and information will be added to our list for future events and programs.

"Evolving Impact Investing to meet Today's Challenges in Every Community"
Although the discipline of values-based investing, widely known as Socially Responsible Investing (SRI) and ESG (Environmental, Social and Governance), has been an option for investors for decades, many are still unaware of the evolution of the guiding vision behind impact investing to address the greatest challenges of our time. In order for our communities to achieve environmental resilience, inclusive economic development and cultural evolution, multidisciplinary leaders at all levels will need to reimagine and restructure financial tools and capital market instruments for all types of projects. This next step in the development of our financial institutions is absolutely crucial to build on the gifts of our past and shape the new emerging framework. All types of investors must coalesce around principles that have been with us for millennia; the same principles that dictate a natural order have the power to build long-term profitable companies, positive economic returns for investors, resilient communities, and sustainable ecosystems. Join us for an engaging webinar series with some of the leading minds in the space to expand the conversation and build solutions and tools for investors in every community.
July 2, 2020

The broad opportunities to meet the needs current and future generations by combining finance and economic development
The challenges we face in today’s economy are a result in part of the blind spots within our business models and mindsets. Expanding the role of finance is necessary to build long-term resilience and must start with recognition that we are facing a systemic crisis. Such a crisis requires systems thinking and inclusive, broad-based solutions. The blind spots of economic theory require a new model - and new tools based on that model.

July 9, 2020

The recent events force the question: what is the asset management industry really willing to do to increase equity, diversity and inclusion? How do create real change and progress? There is growing attention for conscious investors and financial institutions to address the inequities for all asset classes in the global financial ecosystem, with a focus on inclusion across gender, ethnicity, sexual identity and race. We need to increase programs contributing to financial literacy, access to capital and economic independence for the resiliency of every community.

July 16, 2020

In order for the world’s cities to sustain economic growth and enhance resident quality of life, leaders at all levels of business, policy, and key community stakeholders will need to reimagine and restructure infrastructure and housing investment. Historical approaches to financing projects, including large-scale infrastructure, are proving ineffective and inefficient to meet traditional demands. With expectations rising among all stakeholders, new models need to be explored as infrastructure adapts to meet sustainability, resiliency, and affordability goals while addressing decades of deferred maintenance and disinvestment.
July 23, 2020

How do we place resilience at the center of regional forest management & material supply chain development, while significantly reducing waste and carbon emissions from forests to creating better buildings on main street? The beneficial effects of mimicking nature's principles for forest management and resiliency are widespread for communities, ecosystems and the economy. The outcomes improve dimensions such as biodiversity, water supply and other ecosystem services to enhance much-needed bioregional resilience. While at the same time create solutions for the interwoven unemployment and housing crisis. This can be done through regionally resilient building material supply chains to support critical housing for every major urban setting on the planet while reducing negative environmental impacts. 

July 30, 2020

At all levels the current systemic crisis is revealing the gaps and opportunities for transformation and resilience in all levels of agriculture and food systems. We create the best solutions to simultaneously achieve prosperous food systems and regenerate ecosystems by harnessing the benefits of multidisciplinary and multi-stakeholder solutions.
Please message me on linked in to connect and explore ways to participate in our initiatives, and to learn about future episodes to the webinar series.


Saturday, May 09, 2020

Returning to the riddling road to Delphi

Perhaps  “Dear Oracle”  was the phrase weary travelers said, just off the ancient road to the Oracle of Delphi. They wrestled with the riddles of their time, seeking better questions and insights these ancients opened to the wisdom at the pinnacle of their vision quests.

A pilgrimage to Delphi was the ayahuasca of the time for leaders, pundits, philosophers and politicians who sought counsel from a deeper perspective. Some would return again and again to ask better questions, and to rethink thought, born from the confounding answers they surmised which were drawn from their interpretations of the riddles from the oracle.

Visionary economist and thought innovator, John Elkington reflected on his experiences pre and post a visit to Delphi this year surrounding one of the most  riddling set of circumstances and moments that our civilization has ever encountered...

The story begins with "My 50-Year Journey to Delphiwhere he shares that “the world severely disrupted and ultimately truncated the trip, but the net result was glorious"

During the time that most of us were all safe at home, and sufficiently kerfuffled, as if we were asked by the great mystery to go to our room and think about what we’ve done, he wrote a subsequent article, fresh with clarity.

He reflects again, perhaps like every other person after their return from Delphi, new insights forming new imaginings that maybe the oracle would say something in the future like:

"Is not our heart centered leadership to emerge fully for our world from within our hearts now?"

Maybe merely asking the question in our hearts is enough, yet for most of us, a sea change would come about when we walk the heroic path of daily life, by diving deep within our hearts in the most common moments, to our own inner oracle...

While in our kitchens doing the dishes, or driving on the phone with a friend, or in zoom calls with our colleagues, we can ironically find the most precious moments of clarity, from a gaze deep into the unknown inside with newfound curiosity.

May we discover the next step on the path before us, through our hearts, by only listening to our hearts.

Can we imagine that the source of light and illumination is already inside us, as us?

Maybe this open inquiry reveals to us the many ways to expand and savor the joyous sensations born of heroically meeting the challenges of the moment?

From here, now, we can lead our lives knowing the oracle of beauty, light and wisdom lives unexpectedly in the depths of our very own heart.

Thursday, May 07, 2020

Next Decade of Living Systems Paradigm Shift

This Article is an excellent view of the course ahead from now - and a mapping of the current dynamic tools visions and ideas in our backpack as we walk up the unknown mountain of the life before us - we are creators of the future, not victims of it to paraphrase Buckminster Fuller.

Here's the full article:

Welcome to the Decade Ahead:  Prescient Practicality for 2020 and beyond

JANUARY 2, 2020
There is an old Chinese saying,
‘May you live in interesting times’
When someone said that to you, it was viewed as both a blessing and a curse.
A blessing, because interesting times meant change, volatility and uncertainty which invoke adaptation, transformation and a reaching beyond the existing status quo into new found heights.
A curse, because change and uncertainty disrupts the status quo, upsets ego-comforts, and challenges norms and routines.
Facing into the decade of 2020-2030, humanity finds itself amid interesting times of breakdown/breakthrough.
Back in 2010, as we entered the 2010-2020 decade I wrote articles and spoke at conferences about the decade ahead becoming one of volatility and uncertainty – a time when the old logic, the old way of doing things, would start to be seen by the mainstream as no longer adequate to deal with the challenges of the day.
As we leave the 2010-2020 decade behind us, our hindsight may see that it was the beginning of the VUCA Age – volatile, uncertain, complex and ambiguous times of disruptive innovations and wicked systemic challenges becoming the ‘new norm’.
During the decade just passed, leadership research has shown a widening ‘complexity gap’. The old mechanistic logic we used to lead and operate by is no longer fit-for-purpose. Our status quo leadership consciousness is left wanting, unable to deal with the systemic challenges organisations now face.
Whether it be the intent of business shifting from the unflinching focus on shareholder value to a wider perspective of stakeholder value, or corporate responsibility shifting from a narrow focus on risk, control and compliance to wider systemic value. The widespread take-up of the United Nations Sustainable Development Goals, integrated reporting initiatives such as Future-Fit Business Benchmark, and the shift towards the Circular Economy exemplify a sea-change in business.   Come 2020, and we find positive signs that business can become a force for good in the world. The rapid rise of B-Corps, for instance, with over 3,000 organisations across 150 sectors in its ranks, and rising by the day.  I predict 2020-2030 will see significantly more of these systemic adaptations, as business evolves to a new-norm.  It’s the Law of Nature – adapt or die.
This is just the beginning; there is much work to be done for leadership and operational practices to be truly future-fit.  The challenges as we enter 2020 are seismically bigger than when we entered 2010.  Yet, there is increasing acceptance amongst leaders of a ‘new norm’ demanding a new way of leading and operating.  My contributions to Professor Peter Hawkins’ ground-breaking research at Henley Business School on Tomorrow’s Leaders Today’s Leadership Development helped flesh out the need for this next-stage leadership development.
What enables organisations to thrive in the transformative times ahead is their ability to cultivate life-affirming regenerative leadership across all levels of the organisation.
It’s this that transforms our organisations from 19th & 20th century bureaucratic, soul-sapping, toxic, monolithic machines into 21st century agile future-fit organisations.  This calls upon a step-change in leadership consciousness.
Adult developmental psychologists and leadership development specialists have spent decades researching different levels of leadership consciousness.  For instance, a robust and detailed study of adult developmental research from Clare Graves has been further enhanced by practitioners like Don Beck, Christopher CookeFrederic Laloux and Ken Wilber.
In the book Regenerative Leadership, which has been referred to as an evolutionary blueprint for next-stage leadership, Hutchins & Storm explore this next-stage leadership consciousness now unfolding. It correlates to the Orange, Green and Yellow/Teal levels of Clare Graves research. Hutchins & Storm draw on contemporary leadership and organisational development approaches such as Teal/Evolutionary (Laloux’s work on Reinventing Organisations) and Theory U (Otto Scharmer’s work at the Presencing Institute and MIT) as well as living systems theory, Complexity Theory, and latest research on developmental organisations.
This image below shows the step-change. It’s a model taken from the book Regenerative Leadership where Hutchins & Storm articulate the shift from 19th/20th century organisation-as-machine into 21st century organisation-as-living-system:
This is a momentous step-change in how we lead and operate. The 2020-2030 Decade of Transformation will witness life-affirming business practices becoming mainstream.  This is the leading-edge of organisational innovation beyond techno-led digital strategy, AI and robotics.
Here are some key words for future-fit leaders to contemplate as we enter 2020:   Purpose, Diversity, Emergence, Regenerative, Synchronicity… let’s briefly unpack each of these key words:
Purpose:  The word ‘purpose’ is bandied about a lot in business circles these days.  Suffice to say, Purpose is much more than the crafting of a catch-all mission statement. It’s about cultivating a ‘living purpose’ – a lived intent that pervades the organisational culture, where a threshold of people in the organisation deeply resonate with this purpose, and live it in the day-to-day. The living purpose is not just espoused but embodied through the behaviours and cultural glue that binds the organisation.  It provides the coherence and inclusivity that counterbalance the living-organisation’s thirst for agility and diversity.
Diversity: Life itself banks on diversity. And human evolutionary conditions in the 21st Century demand we embrace diversity. The ability to tolerate and thrive amid a wide variety of conditions, perspectives and contexts is critical to becoming future-fit.  Such diversity of experience, perspectives and outlooks builds resilience and increases the capacity to cope with stress – individually and organisationally. Co-authors John Rety and Richard Manning of Go Wild call this ability to embrace diversity ‘re-wilding’ ourselves, breaking free from the restrictions and regimentations of modern life that estrange us from who we truly are.  We literally unlock the power of life-affirming evolutionary forces within us when we learn to embrace diversity.
Rather than the monocultural, corporate mentality we see practiced in many areas of society, we need to think outside the box and invite in unconventional mindsets, work across departments, and bring in different perspectives. As explored in the book Regenerative Leadership, Hutchins & Storm show that the best ideas are not born in silos or by avoiding feedback and input from a broad spectre of stakeholders; the best ideas are created by going beyond borders and getting curious about other approaches, cultures and procedures. 21st century Regenerative Leadership welcomes diversity in terms of age, creed, culture, gender and differing perspectives across the working environment. Leaders can stimulate diversity by working across boundaries both within the organisation (holding space for people from different silos across the business to share perspectives) and beyond the organisation (holding space for external stakeholder groups to share perspectives).
This diversity thrives amid a coherent sense of purpose and a rich developmental culture.  The diversity sparks creative tensions, vibrancy and new thinking (divergence), while the coherence of the living-purpose provides the alignment and sense of direction (convergence).  Out of this alchemy of divergence and convergence comes emergence. Emergence is the dynamic through which the living organisation adapts and evolves.
Emergence:  All living-systems including the living-organisation exhibit the property of emergence.  A key for leaders navigating the transformative times ahead will be their ability to sense into the emergent patterns unfolding within the living-organisation they are working in. Next-stage leadership development needs to enhance our capacity to sense and stimulate emergent patterns within the social systems we lead.  The first step is for leaders to let-go of perceiving the organisation-as-a-machine that can be control through push-pull levers, and out-dated management tools. Instead, start to perceive the organisation as a complex adaptive system made up of non-linear emergent human relations.  These emergent human relations can be nurtured so the organisation becomes more responsive and future-fit.
Christopher Alexander’s work on pattern language, Warren Weaver’s research on organizational complexity, Ralph Stacey’s research on organisations as complex responsive processes of human relating, Steve Johnson’s work on emergence, Jane Jacobs’s work on energy-flow networks enriched by Sally Goerner, Dan Fiscus and Brian Faith’s research on Energy Network Science, etc., contribute to a rich body of research exploring emergence within organisations and other social systems.  In Regenerative Leadership, Hutchins & Storm draw upon these sources and others while exploring emergence for next-stage Regenerative Leaders.
As philosopher Alfred North Whitehead noted, emergence is nature’s creative advance. It is the way of nature – the way life adapts and unfolds to the ever-changing terrain. Understanding the emergent patterns within the relational dynamics we lead will be a critical success factor for the Decade of Transformation ahead.
Regenerative:  The word ‘regenerative’ means creating the conditions conducive for life to continuously renew itself; to flourish amid ever-changing life-conditions. This primary principle underpins life-affirming leadership and organisational development.  Organisations that thrive in the volatile times ahead will be ones that learn to become regenerative, to serve life rather than plunder and pollute life.  See here the DNA model of Regenerative Leadership which is unpacked in Hutchins & Storm’s book of the same title:
This Regenerative Leadership DNA model embraces both the inner and outer technologies, tools, and consciousness that are required for the new regenerative business paradigm to unfold. It’s a unifying framework that integrates vast bodies of research, different domains, and specialist methodologies.
‘Giles Hutchins and Laura Storm bring their vast experience and deep wisdom to create an evolutionary blueprint for a sustainable future for business, people and the planet’
Richard Barrett, President of the Barrett Academy for the Advancement of Human Values
Regenerative leadership is about creating life-affirming cultures where people learn through developmental and respectful cultures, and where value-propositions and products create real value that enhance society, our wider humanity and the fabric of life on Earth upon which we all depend.  This is not some utopian dream, it’s quietly going mainstream, and the business examples packed into the 350 pages of Regenerative Leadership evidence this.  Business can – and must – become a force for good in the world. There is no other viable option for 21st century leadership.
This book invites leaders to lead the world into the 21st century
Christiana Figueres, Executive Secretary UNFCCC 2010-2016

That leaves us with the final word to contemplate as we begin this Decade of Transformation:
Synchronicity:  The ground-breaking psychologist Carl Jung explored synchronicities as ‘meaningful coincidences’ – seemingly unrelated events have a meaningful relation that defies our orthodox understanding of space-time.  Quantum discoveries help give scientific explanation to such synchronistic moments that we have often felt occur in our lives yet struggle to explain through rational logic.  The more we sense into how life works, the more science shows us a sea of interconnections that pervade all living systems – whether in our organisations, communities or everyday life.
In terms of leadership consciousness, recall the image earlier in this article with the levels of Orange, Green and Teal.  At the Orange level of leadership consciousness we perceive the organisation-as-machine and we view life through a mechanistic lens. At the Green level, our lens of perception has widened to include wider society and a systemic perspective of stakeholder interactions. At the Teal level, we embrace a living-systems perspective where we intuit the innate interconnectedness of how life really works. We learn to sense not only the emergent patterns of organisational behaviour but also sense the synchronicities that abound amid everyday interactions.   We cultivate a leadership consciousness that can see past the surface noise and sense the underlying wisdom pervading every person, interaction and learning experience life affords us.  This ability to see beyond the surface and sense the synchronistic interconnected nature of life provides a foundation for peace, empathy and gratitude. This wisdom underpins our leadership capacity amid the hectic busyness of the transformational times ahead.

This book is full of wisdom and determination! It will inspire leaders to succeed in the 21st Century.
Tim Flannery, scientist
Welcome to the future manifesting today. As leaders in organisations, institutions, teams and communities the world-over, we have a duty to step into a way of leading that is life-affirming and regenerative.  Why wish for anything less!

As the well-respected business futurist John Naisbett predicts:
‘The greatest breakthroughs of the 21st Century will not occur because of technology. They will occur because of an expanding concept of what it means to be human.’

What an exciting yet challenging time to be alive, when the old rule-book is being ripped up before our eyes, leaving a wide-open horizon for our leadership consciousness to expand into.
 Living in interesting times may be seen as a blessing or a curse. It’s up to each of us whether we wish to transform ourselves and our systems amid this time of challenge, or get sucked under by the fearful ripe-tides of change.

Giles Hutchins is a pioneering practitioner, business futurist and senior adviser at the fore-front of the [r]evolution in organizational and leadership consciousness and developmental approaches that enhance personal, organizational and systemic agility and vitality. He is author and co-author of several leadership and organizational development papers, and the books The Nature of Business (2012), The Illusion of Separation (2014), Future Fit (2016) and Regenerative Leadership (2019). Chair of The Future Fit Leadership Academy and Founder of Leadership Immersions, he runs a 60 acre leadership centre at Springwood Farm in an area of outstanding natural beauty near London, UK

Biomimicry for Capital Markets

Sixty Minutes with Hazel Henderson and Mathis Wackernagel from Security & Sustainability Forum on Vimeo.

Based on Hazel Henderson's and Jeanine Benyus’ community of practice invention of “ethical biomimicry finance” in 2013, we began discussing biomimicry for financial and economic development paradigms in 2014 at a series of panels at the Social Capital Markets Conference in San Francisco.

Now it’s time for us to build this into a more robust frame & model for the new model portfolio theory and new capital markets. In the same way that IMF/IFC etc have a multistage & multi year design process for emerging markets to develop liquid and effective capital markets - we now have the context capacity cooperative community and connectivity to build the new tool for humanity now in coherence with earth systems... essentially this is what Hazel Henderson has inspired me to see and commit to. Yesterday she did an excellent overview of her nearly 50 years of work with Mathis of the Global Footprint Network in their one hour video - very much worth the time.

This is our theory of change. It is the mission of those who hear this call to to evolve, build and implement a more effective means with and for the community of practice of impact investing and economic development to create better tools and systems for the implementation of 21st century capacities for capital markets now!

Wednesday, January 29, 2020

The Investment Gap that Threatens the Planet

This article is an excellent overview of the situation and a blueprint to weave with our innovations in CA approach to Capital Markets Evolution.

"The growing threat of climate change is no longer a matter of contentious scientific debate. Climate scientists now agree that humanity’s “carbon budget”—the cumulative sum of greenhouse gases that humanity can emit while avoiding the worst effects of climate change—will be exhausted by roughly 2040 at current emission rates. While all levels of warming carry consequences, exceeding this budget will likely cause more than 2 degrees Celsius of warming, triggering irreversible, dangerous, and costly climatic change.

"For decades, investors, policy makers, academics, and entrepreneurs have been debating the best path forward. In recent years, the costs of clean and efficient technologies such as solar photovoltaics (PV), LEDs, and electric vehicles have plummeted, and deployment of these technologies has skyrocketed.

"While we all applaud these achievements, they have also led high-profile investment professionals such as Jigar Shah, academics such as Marc Jacobson, and other vocal figures to proclaim that the world already has the portfolio of solutions necessary to solve the climate crisis, and that investors and governments should focus their efforts on supporting the deployment of these later-stage solutions. This assertion calls into question the value of funding early-stage solutions and places the funding of early-stage and later-stage solutions in competition with one another.

"On the contrary, we argue that investments in early- and late-stage solutions are complementary. The most effective portfolio to achieve climate change mitigation will require thoughtful investments in climate solutions along the entire “innovation continuum,” from conceptual ideas to solutions that are ready for commercial deployment and widespread impact. Drawing a distinction between so-called innovation and deployment presents a false dichotomy; innovation takes place as solutions are ideated, developed, and deployed.

"An investment approach that supports and links solutions at the earliest stages of development to more mature solutions will improve the stock and the flow of solutions capable of mitigating greenhouse gas emissions. Yet this is not the investment approach we see in today’s financial marketplace. In fact, the amount of capital flowing to early-stage solutions is disturbingly low, despite the critical role that these investments play in mitigating climate change.

"To correct this funding gap, new financing vehicles—especially from charitable asset owners—are needed that better align with the development of climate solutions that will secure a low-carbon future. These vehicles must harness capital that can tolerate long development timelines and accept high risk in exchange for high social and environmental impact. Philanthropists are the investors best suited to fund these vehicles.

"While we focus our attention on funding for nascent solutions, we do not downplay the urgent need to perform basic research and deploy mature solutions. Indeed, the most concise summary of our approach is as follows: deploy the solutions we have, develop and improve the ones we need, and create more solutions through investments in research and development. As we will demonstrate, both research and deployment of existing solutions are key parts of an integrated innovation system. However, our assessment suggests that the capital gaps facing nascent climate solutions are particularly acute, and philanthropists, among all global asset owners, are uniquely positioned to help fill this gap.

Thursday, March 21, 2019

The Future of Management is TEAL

If you don't know what TEAL is referring to - this is a great article to read by the author of "Reinventing Organizations" 

I have posted the entire article here. Enjoy!

Many people sense that the way organizations are run today has been stretched to its limits. In survey after survey, businesspeople make it clear that in their view, companies are places of dread and drudgery, not passion or purpose. Organizational disillusionment afflicts government agencies, nonprofits, schools, and hospitals just as much. Further, it applies not just to the powerless at the bottom of the hierarchy. Behind a facade of success, many top leaders are tired of the power games and infighting; despite their desperately overloaded schedules, they feel a vague sense of emptiness. All of us yearn for better ways to work together — for more soulful workplaces where our talents are nurtured and our deepest aspirations are honored.
The premise of this article is that humanity is at a threshold; a new form of organization is emerging into public view. Anthropological research suggests that this is a natural next step in a process that began more than 100,000 years ago. There have been, according to this view, at least five distinct organizational paradigms in human history. Could the current organizational disillusionment be a sign that civilization is outgrowing the current model and getting ready for the next?
A number of pioneering organizations in a wide variety of sectors — profit and nonprofit — are already operating with significantly new structures and management practices. They tend to be successful and purposeful, showing the promise of this emerging organizational model. They show how we can deal with the complexity of our times in wholly new ways, and how work can become a place of personal fulfillment and growth. By contrast, they make most of today’s organizations look painfully outdated.

A History of Organizational Paradigms

In describing the pattern of organizational evolution, I draw on the work of a number of thinkers in a field known as “developmental theory.” One of its basic concepts is the idea that human societies, like individuals, don’t grow in linear fashion, but in stages of increasing maturity, consciousness, and complexity. Various scholars have assigned different names to these stages; philosopher Ken Wilber uses colors to identify them, in a sequence that evokes the light spectrum, from infrared to ultraviolet. I borrow his color scheme as a convenient way to name the successive stages of management evolution (see Exhibit 1).
Around 10,000 years ago, humanity started organizing itself in chiefdoms and proto-empires. With this shift away from small tribes, the meaningful division of labor came into being — a breakthrough invention for its time. With it came the first real organizations, in the form of small conquering armies. These organizations, which in integral theory are labeled Red, are crude, often violent groups. People at this stage of development tend to regard the world as a tough place where only the powerful (or those they protect) get their needs met. This was the origin of command authority. The chief, like the alpha male in a wolf pack, needs to constantly inspire fear to keep underlings in line, and often relies on family members in hopes that they can be trusted. Today’s street gangs, terrorist groups, and crime syndicates are often organized along these lines.
Starting around 4000 BC in Mesopotamia, humanity entered the Amber age of agriculture, state bureaucracies, and organized religion. Psychologically, this leap was enormous: People learned to exercise self-discipline and self-control, internalizing the strong group norms of all agricultural societies. Do what’s right and you will be rewarded, in this life or the next. Do or say the wrong things, and you will be excommunicated from the group.
All agrarian societies are divided into clearly delineated castes. They thrive on order, control, and hierarchy. In organizations, the same principles characterize the Amber stage. The fluid, scheming wolf pack–like Red organizations give way to static, stratified pyramids. The Catholic Church is an archetypal Amber organization, complete with a static organization chart linking all levels of activity in lines and boxes, from the pope at the top to the cardinals below and down to the archbishops, bishops, and priests. Historically, the invention of formal roles and hierarchies was a major breakthrough. It allowed organizations to scale beyond anything Red society could have contemplated. Amber organizations produced the pyramids, irrigation systems, cathedrals, the Great Wall of China, and other structures and feats that were previously unthinkable. They also considerably reduced violence; a priest whose role is defined by a box in an organization chart doesn’t scheme to backstab a bishop who shows a sign of weakness. A second breakthrough was the invention of stable, replicable processes, such as the yearly cycle of planting, growing, and harvest in agriculture.
Today, this hierarchical and process-driven model is visible in large bureaucratic enterprises, many government agencies, and most education and military organizations. In Amber organizations, thinking and execution are strictly separated. People at the bottom must be instructed through command and control. In today’s fast-changing, knowledge-based economy, this static, top-down conception of management has proven to be inefficient; it wastes the talent, creativity, and energy of most people in these organizations.
Starting with the Renaissance, and gaining steam with the Enlightenment and the early Industrial Revolution, a new management concept emerged that challenged its agrarian predecessor. In the Orange paradigm, the world is no longer governed by absolute, God-given rules; it is a complex mechanism that can be understood and exploited through scientific and empirical investigation. Effectiveness replaces morality as the yardstick for decision making: The best decision is the one that begets the highest reward. The goal in an Orange organization is to get ahead, to succeed in socially acceptable ways, and to best play the cards one is dealt. This is arguably the predominant perspective of most leaders in business and politics today.
The leap to Orange coincided with three significant management breakthroughs that gave us the modern corporation. First was the concept of innovation, which brought with it new departments such as R&D, product management, and marketing, as well as project teams and cross-functional initiatives. Second was accountability, which provided leaders with an alternative to commanding people: Give people targets to reach, using freedom and rewards to motivate them. This breakthrough, sometimes called management by objectives, led to the creation of modern HR practices, budgets, KPIs, yearly evaluations, bonus systems, and stock options. Third was meritocracy, the idea that anyone could rise to any position based on his or her qualifications and skills — a radical concept when it appeared.
The transition to Orange brought a new prevailing metaphor. A good organization is not a wolf pack or army, but a machine. Corporate leaders adopted engineering terms to describe their work: they designed the company, using inputs and outputs, information flows, and bottlenecks; they downsized the staff and reengineered their companies. Most large, mainstream publicly listed companies operate with Orange management practices.
In just two and a half centuries, these breakthroughs have generated unprecedented levels of prosperity, added decades to human life expectancy, and dramatically reduced famine and plague in the industrialized world. But as the Orange paradigm grew dominant, it also encouraged short-term thinking, corporate greed, overconsumption, and the reckless exploitation of the planet’s resources and ecosystems. Increasingly, whether we are powerful leaders or low-ranking employees, we feel that this paradigm isn’t sustainable. The heartless and soulless rat race of Orange organizations has us yearning for more.
Postmodernity brought us another world view. The Green stage stresses cooperation over competition and strives for equality, solidarity, and tolerance. Historically, this perspective inspired the fights for the abolition of slavery, and for gender equality, and today it helps combat racism, homophobia, and other forms of discrimination. Green organizations, which include many nonprofits as well as companies such as Southwest Airlines, Starbucks, and the Container Store, consider social responsibility the core of their mission. They serve not just shareholders but all stakeholders, knowing that this often results in higher costs in the short term, but better returns in the end.
Green leaders have championed the soft aspects of business — investing in organizational culture and values, coaching, mentoring, and teamwork — over the hard aspects of strategy and budgeting so prized in Orange. Family is their metaphor; everyone’s voice should be heard and respected. You can’t treat knowledge workers like cogs in a machine. Empowerment and egalitarian management are among the breakthroughs they introduced.
Practice shows, alas, that empowerment and egalitarian management are hard to sustain. Efforts to make everyone equal often lead to hidden power struggles, dominant actors who coopt the system, and organizational gridlock. Green companies, universities, and organizations that take egalitarianism too far have tended to bog down in debate and factionalism. Successful Green companies maintain a careful balance: taming the traditional hierarchy through constant investment in training and culture; reminding leaders and managers to wield their power carefully; and raising the skills of people on the front lines.
All of these organizational paradigms coexist today. In any major city one can find Red organizations (entities at the fringes of the law), Amber organizations (public schools and other government entities), Orange organizations (Wall Street and Main Street companies), and Green organizations (values-driven businesses and many nonprofits). Look closely at how an organization operates — its structure, leadership style, or any core management process — and you can quickly guess the dominant paradigm. Take compensation, for example: How are people rewarded? In a Red company, the boss shares the spoils as he or she pleases, buying allegiance through reward and punishment. In Amber organizations, salaries are tightly linked to a person’s level in the hierarchy (“same rank, same pay”) and there are no incentives or bonuses. Orange companies offer individual incentives to reward star performers, while Green companies generally award team bonuses to encourage cooperation.
Today, in small but increasing numbers, leaders are growing into the next stage of consciousness, beyond Green. They are mindful, taming the needs and impulses of their ego. They are suspicious of their own desires — to control their environment, to be successful, to look good, or even to accomplish good works. Rejecting fear, they listen to the wisdom of other, deeper parts of themselves. They develop an ethic of mutual trust and assumed abundance. They ground their decision making in an inner measure of integrity. They are ready for the next organizational paradigm. Its color is Teal.

The Nature of Teal

In 2012, I set out to find some examples of Teal organizations and describe the factors that set them apart. To qualify, an organization had to employ a minimum of 100 people and had to have been operating for a minimum of five years in ways that were consistent with the characteristics of a Teal stage of human development.
After screening a great number of organizations, I focused on 12, selecting those that were most advanced in reinventing management structures and practices. (See “Examples of Teal Management,”  where ten are listed; the other two, AES and BSO/Origin, reverted back to more traditional management practices after a change of CEO or ownership). I was struck by the diversity of these organizations. They include publicly held and privately held for-profit corporations along with nonprofits in the consumer products, industrial, healthcare, retail, and education industries. Typically, the leaders of these companies didn’t know about one another. They often thought they were the only ones to be so foolhardy as to rethink their management practices in fundamental ways. Yet, after much trial and error, they came up with strikingly similar approaches to management. It seems that a coherent new organizational model is emerging.

Examples of Teal Management

Buurtzorg: a Netherlands-based healthcare nonprofit, profiled in this article.
ESBZ: a publicly financed school in Berlin, covering grades seven to 12, which has attracted international attention for its innovative curriculum and organizational model.
FAVI: a brass foundry in France, which produces (among other things) gearbox forks for the automotive industry, and has about 500 employees.
Heiligenfeld: a 600-employee mental health hospital system, based in central Germany, which applies a holistic approach to patient care.
Morning Star: a U.S.-based tomato processing company with 400 to 2,400 employees (depending on the season) and a 30 to 40 percent share of the North American market. (If you have eaten pizza or spaghetti sauce in the U.S., you have probably tasted a Morning Star product).
Patagonia: a US$540 million manufacturer of climbing gear and outdoor apparel; based in California and employing 1,300 people, it is dedicated to being a positive influence on the natural environment.
Resources for Human Development (RHD): a 4,000-employee nonprofit social services agency operating in 14 states in the U.S., providing services related to addiction recovery, homelessness, and mental disabilities.
Sounds True: a publisher of multimedia offerings related to spirituality and personal development, with 90 employees in the United States.
Sun Hydraulics: a maker of hydraulic cartridge valves and manifolds, with factories in the U.S., the U.K., Germany, and Korea employing about 900 people.
Holacracy: a management system first developed at the Philadelphia-based software company Ternary, which has been adopted by a few hundred profit- and not-for-profit organizations around the world, most famously by Zappos.
  • Source: Frederic Laloux, Reinventing Organizations (Nelson Parker, 2014)
Like previous leaps to new stages of management, the new model comes with a number of important breakthroughs:
• Self-management. Teal organizations operate effectively, even at a large scale, with a system based on peer relationships. They set up structures and practices in which people have high autonomy in their domain, and are accountable for coordinating with others. Power and control are deeply embedded throughout the organizations, no longer tied to the specific positions of a few top leaders.
• Wholeness. Whereas Orange and Green organizations encourage people to show only their narrow “professional” selves, Teal organizations invite people to reclaim their inner wholeness. They create an environment wherein people feel free to fully express themselves, bringing unprecedented levels of energy, passion, and creativity to work.
• Evolutionary purpose. Teal organizations base their strategies on what they sense the world is asking from them. Agile practices that sense and respond replace the machinery of plans, budgets, targets, and incentives. Paradoxically, by focusing less on the bottom line and shareholder value, they generate financial results that outpace those of competitors.

Changing Paradigms at Buurtzorg

Buurtzorg, a large Dutch nursing care provider, is a good example of an organization running with Teal management structures and practices. Since the 19th century, every neighborhood in the Netherlands has had a local nurse who makes home visits to care for the sick and the elderly. These nurses operated largely autonomously until the early 1990s. Then, to maximize efficiency and reduce costs, the government created incentives for care-giving agencies to merge into larger enterprises.
The new agencies, most of which were private companies, gravitated toward an Orange paradigm. Seeking to minimize downtime and allocate staff flexibly, they set up centralized call centers; instead of calling their nurse personally, clients now had to dial the center. Planners were hired to devise daily visiting schedules that minimized travel times. The agencies instituted time standards: 10 minutes for intravenous injections, 15 minutes for bathing, and 2.5 minutes for changing a compression stocking. Barcode stickers, placed on patients’ front doors, tracked the nurses’ progress so central managers could analyze their efficiency. As these organizations consolidated, they added more layers of management, all with the intention of increasing efficiencies and squeezing out costs.
The outcome has been distressing to patients and nurses alike. Clients, who are often elderly, have to cope with new faces in their home at every visit. They must repeat their medical histories to hurried nurses who have no time allotted for listening. The nurses, for their part, find these working conditions degrading. They know they should spend more time trying to understand the changing conditions of their patients, but they simply can’t. The whole system is prone to errors, conflicts, and complaints
Buurtzorg (the name means neighborhood care in Dutch) was founded in 2006 by Jos de Blok, who had experienced these problems firsthand, as a nurse for 10 years and then as a manager. His new organization is extraordinarily successful, having grown from four to 9,000 nurses in its first eight years and achieving outstanding levels of care. He set up the company as a self-managing enterprise. Nurses work in teams of 10 to 12, each team serving around 50 patients in a small, well-defined neighborhood.
Buurtzorg has a distinctive outlook on the nature of care. Its purpose is not to give shots and change bandages as efficiently as they can, but to help its patients live, as much as possible, a rich and autonomous life. Nurses regularly sit down for coffee with their patients. They help them structure their own support networks and reach out to families and neighbors. Patients see the same one or two nurses all the time, and often form deep bonds of trust and intimacy with them.
Clients and nurses love Buurtzorg. Only eight years after its founding, its market share has reached 60 percent. Financially, the results are stellar, too. One 2009 study found that Buurtzorg requires, on average, only 40 percent of the care hours needed by a more conventional approach, because patients become self-sufficient much faster. Emergency hospital admissions have been cut by a third, and the average hospital stay of a Buurtzorg patient is shorter. It’s estimated that the Dutch social security system would save $2 billion per year if the entire home-care industry adopted Buurtzorg’s operations model.
Self-Management and Its Misconceptions
Buurtzorg’s 9,000 employees operate entirely with self-managing practices. Local teams of 10 to 12 nurses decide which patients to serve, how to allocate tasks, where to rent offices, how to integrate with the local communities, which doctors and pharmacies to work with, and how to collaborate with nearby hospitals. They monitor their own performance and take corrective action if productivity drops. Teams don’t have team leaders; management tasks are spread across the members, all of whom are nurses.
One common misconception about self-management is that everyone is equal and decisions are made by consensus, which requires endless meetings. The truth is very different. Self-management requires a whole set of interlocking structures and practices, so that decision rights and power flow to any individual who has the expertise, interest, or willingness to step in to oversee a situation. Fluid, natural hierarchies replace the fixed power hierarchies of the pyramid. This requires explicit training. At Buurtzorg, all new team members take a course called Solution-Driven Methods of Interaction, learning sophisticated listening and communication skills, techniques for running meetings and making decisions, and methods of coaching one another and providing perspective.
You might assume that all this is managed through staff functions — the source of capability and power in many Orange and Green organizations. But Buurtzorg’s 9,000 nurses are supported by fewer than 50 staff people. The nurses do their own recruiting and purchasing, contracting for specialized medical or legal expertise when needed. They align with the larger organization not through rules and procedures, but through the collaboration methods they learned. A powerful internal social network allows them to draw on guidance and medical expertise from fellow nurses in other parts of the country, many of whom they’ve never met.

The Embrace of Wholeness

In Amber, Orange, and Green organizations, people typically show up wearing a mask: the bishop’s robe, the doctor’s white coat, and the executive’s suit all embody subtle, but real, expectations. Leaders fear that if people brought all of themselves to work — their moods, quirks, deepest aspirations, and uncertainties — things would quickly fall into disorder. Most people adopt an air of resolution and determination, favoring their masculine, rational selves. It feels unsafe to reveal the caring, inquiring, intuitive, and spiritual aspects of the self, or to express a desire for meaning. Many of us end up disowning some fundamental aspects of our selves. When an organization feels lifeless, is it because we bring so little life to work?
Teal organizations start from the premise, resonant with many wisdom traditions, that a person’s deepest calling is to achieve wholeness. These organizations engender vibrant workspaces and practices where trust flourishes. People feel they can truly be themselves. Simple management practices foster a sense of personal connection. At Patagonia’s headquarters in Ventura, Calif., for example, the company maintains a child development center for employees’ preschoolers. Children’s laughter and chatter are regularly heard; kids visit their parents’ desks, join adults for lunch at the cafeteria, and run around in the playground outside. One sometimes sees a mother nursing her child during a meeting. At another Teal company, Sounds True, people regularly bring their dogs to work. Meetings often take place with two or three dogs lying at people’s feet. Having children and animals present tends to reconnect people with deeper parts of themselves; they see one another not only as colleagues, but as part of a common humanity.
One harbinger of the rise of consciousness in the business world is the support given to contemplative practices. It’s becoming fashionable, even in Wall Street banks, to offer meditation classes. But these are often treated as add-ons, separate from the real work. At the Heiligenfeld hospital chain inner work is woven deeply into daily life. Every week, colleagues from their five hospitals come together for 75 minutes of intensive, reflective dialogue about a theme such as dealing with risks or learning from mistakes. Heiligenfeld also devotes four days per year to silence. The staff speaks only when needed, in whispers; patients engage in forms of therapy that require no words, such as walks in the woods or painting sessions. People learn to interact from a deep place when words are not at hand.
The quest for wholeness can also be seen on the factory floor. At FAVI, a French automotive supplier, all engineers and administrative workers are trained to operate at least one assembly-line machine. When orders must be rushed out, white-collar workers come in to run the machines for a few hours. It’s a wonderful community-building practice. People in engineering and administrative roles work under the guidance of the machine operators. They see for themselves how hard the work on the machines can be and how much skill it involves.
FAVI also has an in-depth onboarding process that ends with new teammates writing an open letter to the colleagues they have joined. The letters often describe how, perhaps for the first time in their career as a machine operator, their voice counts at work and they are considered worthy of trust and appreciation.

Evolutionary Purpose

Most organizations define a purpose for themselves in the form of a mission statement, which is typically engraved on a plaque in the headquarters lobby. Most of these statements, of course, sound hollow. The espoused purpose can’t compete with the pursuit of profits or competitive advantage.
Buurtzorg’s purpose, as discussed above, is to help sick and elderly patients live a rich and autonomous life. Its competitive advantage is the way it fulfills that purpose, with self-organization and wholeness. If it were a more traditional organization, it would try to keep this competitive advantage secret, and gain market share accordingly. Founder de Blok did the opposite. He wrote a book (Buurtzorg: Menselijkheid Boven Bureaucratie, [Boom Lemma uitgevers, 2010], coauthored with Aart Pool, whose title translates as “Humanity above Bureaucracy”) in which he documented Buurtzorg’s revolutionary ways of operating in great detail. He accepts all invitations from competitors to explain his methods, and acts as an advisor for two direct competitors without compensation.
“The whole notion of competition makes no sense,” says de Blok. “If you share knowledge and information, things will change more quickly.”
Making purpose the cornerstone of an organization has profound consequences for leadership. In today’s dominant management paradigm (Orange), leaders are supposed to define a winning strategy and then marshal the organization to execute it, like the human programmer of a machine who controls what it will do. In the Teal paradigm, founders and leaders view the organization as a living entity, with its own energy, sense of direction, and calling to manifest something in the world. They don’t force a course of action; they try to listen to where the organization is naturally called to go. None of the organizations I researched has a strategy document. Gone are the often dreaded strategy formulation exercises, and much of the machinery of midterm plans, yearly budgets, cascaded KPIs, and individual targets. Instead of trying to predict and control, they aim to sense and respond.
FAVI uses a metaphor to explain this. Other companies look five years ahead and make plans for the next year. They prefer to think like farmers: Look 20 years ahead, and plan only for the next day. A farmer must look far out when deciding which fruit trees to plant or which crops to grow. But it makes no sense to plan a precise date for the harvest. One cannot control the weather, the crops, the soil; they all have a life of their own. Sticking rigidly to plan, instead of sensing and adjusting to reality, leads to having the harvest go to waste, which too often happens in organizations.
Practices based on sensing and responding, combined with self-management, lead to high levels of innovation. Two nurses on a Buurtzorg team found themselves pondering the fact that elderly people, when they fall, often break their hips. Could Buurtzorg help prevent this? Their team created a partnership with a physiotherapist and an occupational therapist from their neighborhood. They advised patients on small changes they could bring to their home interiors, and changes of habit that would minimize the risk of falling. Happy with their success, they approached de Blok to suggest turning “Buurtzorg+” (Buurtzorg + prevention) into a national program.
Had de Blok been a traditional CEO, he might have analyzed the idea and, if he approved it, assigned a team in headquarters to develop a comprehensive implementation plan. His actual answer was much humbler: Why should he, rather than the system itself, decide if this was a wise thing to do? He suggested that the same team of nurses package their approach and disseminate the idea on the company’s internal social network. Hundreds of teams showed interest and the idea quickly caught on. Within a year, almost all teams had incorporated prevention into their work using that model.
In a self-managing, purpose-driven organization, change can come from any person who senses that change is needed. This is how change has occurred in nature for millions of years. Innovation doesn’t happen centrally, according to plan, but at the edges, when some organism senses a change in the environment and experiments to find an appropriate response. Some attempts fail to catch on; others rapidly spread to all corners of the ecosystem.

Becoming a Teal Organization

Some companies, like Buurtzorg, are advanced on all three Teal breakthroughs: self-management, wholeness, and evolutionary purpose. Others are more advanced in one area than others — FAVI in self-management, Heiligenfeld in wholeness. None of the Teal companies I have identified have the scale of the largest Orange companies (such as Walmart) or Green ones (such as Southwest Airlines). This is still the dawn of the Teal paradigm. However, its promise is suggested by the success these organizations are having.
Every stage of organizational evolution is more mature and effective than the previous stage, because of the inherent attitude toward power. A Red leader asks, How can I use my power to dominate? An Amber leader asks, How can I use it to enforce the status quo? An Orange leader asks, How can we win? A Green leader asks, How can we empower more people? A Teal leader asks, How can everyone most powerfully pursue a purpose that transcends us all?
Research suggests that there are two — and only two — necessary conditions for developing a Teal organization.
1. Top leadership. The chief executive must have an integrated world view and psychological development consistent with the Teal paradigm. It is helpful if a few close colleagues share this perspective.
2. Ownership. Owners of the organization must also understand and embrace Teal world views. Board members who don’t get it, experience shows, can temporarily give a Teal leader free rein. But when the organization hits a rough patch or faces a critical choice, owners will want to regain control in the only way that makes sense to them: appointing a CEO who exerts top-down, hierarchical authority.
What about businesses, nonprofits, schools, hospitals, government agencies, and other institutions where these conditions are not in place? Can a middle manager hope to influence an entire enterprise by showcasing Teal practices locally? As much as I would like to believe this is possible, my hopes are not high. Experience shows that it takes more than a successful local example to catalyze this sort of system-wide change.
However, as a middle or senior manager, you can introduce some elements of the new paradigm for your own benefit and that of your colleagues. Practices that encourage people to show more of their true selves might come across as unusual, but are unlikely to raise red flags with top leadership. Some elements of self-management can be introduced; for example, instead of imposing new targets, ask team members to determine, in a peer-based process, which targets could be changed. If the team functions well, don’t attend the meeting. Let them come up with the best solution on their own so the targets will be theirs. Or when it’s time to appoint someone to report to you, don’t do it yourself. Let the team one level below write up the job description, interview candidates, and select their boss. Executives who have tried this find that subordinates take choosing their boss very seriously, and the process gives the boss a much stronger working relationship with the team.
The full benefit, of course, accrues to those organizations that fully embrace the new paradigm. When I spent a day with de Blok in the small headquarters of Buurtzorg, I was struck by how much simpler work life could be. Buurtzorg is a 9,000-person organization growing at breakneck speed. But after several hours of conversation, I realized we hadn’t been interrupted once. No urgent phone calls; no assistant coming in to whisper in the CEO’s ear that something had come up. Work in Teal organizations seems to unfold so easily it sometimes verges on the magical. Control and self-correction is embedded in the system, and no longer requires leaders to be on top of everything at all times.
In the past, with every change in consciousness (from Red to Amber to Orange and to Green), more powerful and life-enhancing forms of management have emerged. After the full emergence of the Teal paradigm, we will probably look back and find the organizational forms and practices of the late 20th and early 21st century alienating and unfulfilling. Already, it’s clear that we can create radically more productive, soulful, and purposeful businesses and nonprofits, schools, and hospitals. We are at an inflection point: a moment in history where it’s time to stop trying to fix the old model and instead make the leap to the next one. It will be better suited to the complexity and challenges of our times, and to the yearning in our hearts.
The story line of evolution in this article, and the use of colors to describe stages, draws on the work of several thinkers, including Clare Graves, Ken Wilber, Jenny Wade, Don Beck, Robert Kegan, and Jane Loevenger.
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