Book Report: Reinventing Organizations by Frederic Laloux

reinventing-organizationsReinventing Organizations by Frederic Laloux explores non-hierarchical organizations (they’re called “Teal” organizations throughout the book) in an effort to explain how organizations can operate without much in the way of structure — essentially a CEO and then a bunch of title-less employees that simply find work that needs to be done and go and do it. It sounds utopian, to be sure, but Laloux explains the history of several successful businesses that have been operating in this paradigm for some time.
Probably most impressive is the story of Buurtzorg, a Dutch neighborhood nursing organization that grew from 10 to 7.000 nurses in 7 years, and has achieved incredible results:

The results achieved by Buurtzorg on the medical front are outrageously positive. A 2009 Ernst & Young study found that Buurtzorg requires, on average, close to 40 percent fewer hours of care per client than other nursing organizations—which is ironic when you consider that nurses in Buurtzorg take time for coffee and talk with the patients, their families, and neighbors, while other nursing organizations have come to time “products” in minutes. Patients stay in care only half as long, heal faster, and become more autonomous. A third of emergency hospital admissions are avoided, and when a patient does need to be admitted to the hospital, the average stay is shorter. The savings for the Dutch social security system are considerable—Ernst & Young estimates that close to €2 billion would be saved in the Netherlands every year if all home care organizations achieved Buurtzorg’s results. Scaled to the US population, this savings would be equivalent to roughly $49 billion. Not bad for just home care. Imagine if the incomparably bigger hospital organizations were to be run in a similar manner.

The book is filled with similar stories of amazing results, but where it fails, for me, is Laloux’s absolutely positive view of the organizations and practices. At no point is there any serious exploration of negative impacts the organizational changes described. The only negative language used in this book is to describe those who doubt that the system, and the book often uses flowery new-age language to describe business environments: a “beautiful set of practices”, a “wonderful procedure”, “we need integrity and wholeness to transcend the primacy of profits and heal our relationship with the world.” It feels more like a book about religious or spiritual practices than a book about business. Because of the overly-positive descriptions, and lack of any raised concerns, I found the book to be untrustworthy, especially given what I’ve read about Zappo’s attempts to adopt Holacracy.
Some of my peers who enjoyed the book more than I have share my skepticism about some of these practices in the context of a software development organization: I was disappointed that there was no example there. Laloux also doesn’t answer questions of scaling to my satisfaction: I find it telling that the book mentions (frustratingly briefly) that the two largest organizations discussed have both abandoned their “Teal” practices.
Laloux also blows right by issues that raise my eyebrows — as here when he explains that a Morning Star employee is expected to write a letter to colleagues outlining a work schedule that raises life-work balance issues to me (not to mention my cringe at the idea of having to write a commitment to colleagues outlining said “balance”):

Morning Star has a similar practice: each colleague indicates in his CLOU [Colleague Letter of Understanding] his work schedule commitment. A person might indicate, for example, 40 to 45 hours off-season, and 50 to 55 hours in high season (when tomatoes are harvested and processed). Because colleagues discuss their CLOUs, they know about each other’s commitments.

My biggest concerns are with the descriptions of the feedback and conflict resolution processes described in the book. Here’s a bit about feedback:

The first is simply to approach feedback with the ancient insight shared by all wisdom traditions. We can approach the world from one of two sides: from a place of fear, judgment, and separation; or from one of love, acceptance, and connection. When we have difficult feedback to give, we enter the discussion uneasily, and this pushes us to the side of fear and judgment, where we believe we know what is wrong with the other person and how we can fix him. If we are mindful, we can come to such discussions from a place of care. When we do, we can enter into beautiful moments of inquiry, where we have no easy answers but can help the colleague assess himself more truthfully. Bringing this kind of mindfulness to discussions is something we can learn, something that can be taught. Simple practices can help too: we can start feedback sessions with a minute of silence or any other personal ritual that helps us tune in to love and care.

And here’s the conflict resolution process at Morning Star:

The conflict resolution process (called “Direct Communication and Gaining Agreement”), applies to any type of disagreement. It can be a difference of opinion about a technical decision in a given situation. It can be interpersonal conflict. It can be a breach of values. Or it can be related to performance issues, when one colleague finds that another is doing a lousy job or not pulling his weight. Whatever the topic, the process starts with one person asking another to gain agreement:

  • In a first phase, they sit together and try to sort it out privately. The initiator has to make a clear request (not a judgment, not a demand), and the other person has to respond clearly to the request (with a “yes,” a “no,” or a counterproposal).
  • If they can’t find a solution agreeable to both of them, they nominate a colleague they both trust to act as a mediator. The colleague supports the parties in finding agreement but cannot impose a resolution.
  • If mediation fails, a panel of topic-relevant colleagues is convened. The panel’s role, again, is to listen and help shape agreement. It cannot force a decision, but usually carries enough moral weight for matters to come to a conclusion.
  • In an ultimate step, Chris Rufer, the founder and president, might be called into the panel, to add to the panel’s moral weight.

Since the disagreement is private, all parties are expected to respect confidentiality during and after the processes. This confidentiality applies of course to the two persons at the heart of the conflict as well. They must resolve their disagreement between themselves and are discouraged from spreading the conflict by enlisting support and building rival factions.

Thinking about how these processes might look to someone who’s been discriminated against in life — who’s likely to approach any of these discussions feeling oppressed rather than empowered raises huge concerns for me. Can you imagine that conflict resolution process in the context of a sexual harassment incident? Step one is to sit together and sort it out privately? Then they need to find a mediator? I seriously can’t imagine that this is truly the process in that case, and yet Laloux (as always, ignoring any potential problem areas in the practices he describes) does not mention any other process. In that context — even if that would be legal (I can’t imagine it is) — it is horribly, deeply immoral.
Laloux would respond to my concerns that they are coming from my own fear and ego (the word “fear” appears 83 times in 326 pages of text). Maybe that’s true, but I don’t think I’ve approached much of my career out of a sense of fear, and I am genuinely interested in the approaches these organizations are taking.
In fact, in spite of all of my criticisms about the book, I found it a very worthy read. First of all, it was deeply challenging to many of the views that I hold. More importantly, in spite of the fact that Leloux suggests that attempting parts of these practices within a hierarchical structure is a waste of time, I found many ideas in the book (and in my thinking about the book) that I will be experimenting with over the next few months.

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