The basics firstWhat is a teal organization and how is it different?
A teal organization is a company without bosses, where the people a decision affects make it after consulting their colleagues. It rests on self-management, wholeness and evolutionary purpose.
The term comes from Belgian consultant Frederic Laloux and his book Reinventing Organizations (2014). He studied how the way people work together has changed through history and named each stage after a color. Every stage brought a breakthrough that the later ones kept. The army invented stable processes. The corporation invented management by objectives. None of it disappeared. New layers simply build on top.1,19
| Stage | What it brought | Who decides | Who it hires |
|---|---|---|---|
| RedWolf packgangs, mafia | Division of labor and clear command | The strongest boss, often through fear | Loyal people who obey |
| AmberArmyarmy, church, civil service | Formal roles and stable processes | A hierarchy that follows the rulebook | By qualification, to fill a slot in the org chart |
| OrangeMachinemultinational corporations | Innovation, targets and performance pay | Management by numbers and KPIs | Top performers with the best skills on the market |
| GreenFamilyBen & Jerry’s, Southwest Airlines | Company culture, values and empowerment | A manager who gives the team room, often by consensus | People who share the values and fit in |
| TealLiving organismBuurtzorg, Morning Star, FAVI | Self-management, wholeness and evolutionary purpose | Whoever the matter affects, after consulting others | The team chooses: people who can handle freedom and share the purpose |
The stages aren’t a ranking from bad to good. Most companies today are orange with green elements, and in many situations that is a sensible choice. Teal is simply another way to handle complexity. Decisions get made where the work happens, instead of traveling up to a boss. It stands on three pillars:
- Self-managementPeople work in small autonomous teams. Anyone can make any decision, as long as they first consult the people it affects and someone who knows the subject. This is called the advice process. Instead of job titles, people hold roles they take on and swap as needed.
- WholenessYou come to work as your whole self, without a professional mask. Emotions, doubts and family all have a place. Laloux argues that people who don’t have to hide anything have more energy for their work. “They don’t want you to wear forty masks to work,” Tami Simon, founder of the publisher Sounds True, says of her colleagues.10
- Evolutionary purposeThe company doesn’t follow a five-year plan. It listens to what it wants to become and keeps adapting. Purpose ranks above profit, though nothing works without profit.
So what isn’t a teal organization? It isn’t a company without rules. The rules just aren’t enforced by a boss. It isn’t endless voting, because the advice process is not consensus. And it isn’t just a “flat structure” with a ping-pong table in the kitchen.
Reality checkIs self-management for everyone?
No, and that’s fine. When a company removes its bosses, the work they did doesn’t disappear. It gets spread across everyone. Some people find it energizing. Others find it draining. The numbers from companies that tried it are clear:
of Zappos staff took a buyout in 2015 when the company moved to self-management. By January 2016, 18% had left in total.5,6
of experienced new hires leave California’s Morning Star within two years. That is the co-founder’s own estimate.7
is how long it takes, according to Morning Star, before a new person works at full strength in self-management.7
More freedom doesn’t automatically mean happier people. Research in self-managing companies showed that what counts is the match between how much autonomy a person wants and how much they get. People who get more than they want are less engaged and more exhausted.8
So a candidate who wants clear instructions and a single boss isn’t a worse candidate. They’re just looking for a different company. And it’s only fair to tell them at the start, not six months in.
What to look forHow can you tell who will thrive in a teal organization?
Research and company practice point to five things: attitude toward self-management, the amount of freedom someone wants, ownership, appetite for learning and a calm approach to conflict.
Research backed by a studyPractice company experience
-
A positive attitude toward self-management Research
The best predictor of how well someone adapted to a self-managing team was their attitude toward self-management, followed by conscientiousness. And you can shape that attitude by how you present the company to the candidate.9
-
Wants as much freedom as you offer Research
Open, extraverted and emotionally stable people tend to seek more autonomy. Don’t ask about personality type, though. Ask how it went for them when nobody told them what to do.8
-
Takes ownership, doesn’t blame others Practice
Energy company AES calls the chronic complainer, who always sees the fault in others, the worst possible hire. Without a boss to dump everything on, a person like that pulls the team apart.10
-
Enjoys learning new roles Practice
In a teal organization, roles change with whatever is needed right now. So Morning Star looks mainly for a willingness to learn, not a perfect match with the job description.10
-
Handles criticism and conflict calmly Practice
Nobody settles disputes for you. That’s why Applifting, one of the best-known teal companies in the Czech Republic, looks for people who take criticism in stride and don’t make disagreements personal.11
MethodHow do you hire when the whole team decides?
With structure. A chat over coffee isn’t enough, even with twelve people. In teal organizations, future colleagues do the choosing. No boss, no HR department. A candidate at Morning Star goes through 10 to 12 conversations with the people they will work with.10 It makes sense: whoever picked the new person wants them to succeed.
There is a catch, though. When twelve people each have a casual chat, you don’t get twelve independent opinions. You get the same mistake twelve times: a gut feeling about whether they like the person.
How well selection methods predict job performance
A scale from 0 to 1. These are not percentages. 0 means the selection result says nothing about future performance, 1 means it predicts it perfectly. The technical term is validity. The best selection methods today reach about 0.4.
A structured interview predicts performance roughly twice as well as a free-form conversation. That means questions and criteria set in advance, plus a scoring scale each interviewer fills in alone before any discussion starts.
The second trap is called “they’ll fit in.” Sociologist Lauren Rivera interviewed 120 people who hire for elite banks, consultancies and law firms. More than half saw cultural fit as the most important criterion. In practice that meant similar hobbies, schools and life stories.14
“Employers hire in a manner more closely resembling the choice of friends or romantic partners.”
Lauren Rivera, sociologist, Northwestern University (2012)14
In a teal organization, where hiring decisions are made by consensus, the risk is even greater. You end up with a team of clones who get along great and all share the same blind spots. So instead of asking “Will they fit in?” ask “What will they bring that we’re missing?”