Leading Innovation / The Holacratic Way

Leading Innovation holacratic

Introduction

When we talk about leading innovation and about the most adequate leadership system in which the employees of a company can be extremely creative and generate remarkable innovation, we are talking about a type of leadership system that is almost non-existent nowadays. It is that type of leadership that ensures both freedom and adequate constraints, in a mix which is favourable to the corporate innovation.

The way in which we organise ourselves and the way in which we rule today is just an avatar of the short history of Homo sapiens on this planet. A great number of psychologists, philosophers and anthropologists have analysed this human journey of consciousness. Man’s comprehension of life has evolved throughout history and continues to evolve. The forms of organisation have evolved as well. With every major step in this comprehension (self-awareness), humanity has invented new forms of organisation and collaboration with the aim of producing goods and services. It is as if humans, as a species, have climbed slowly but surely up Abraham Maslow’s pyramid or in the classifications made by Jean Gebser, Jean Piaget, Clare W. Graves, Lawrence Kohlberg, Carol Gilligan, Jane Loevinger, James Fowler, Susanne Cook-Greuter, Robert Kegan and W. R. Torbert.

Ken Wilber is the only one who succeeded in drawing an all-embracing and complete map of this evolution, without forgetting to take into consideration his predecessors. All these types of organisations coexist in our world too, and we can easily classify them as follows (according to Ken Wilber, Frederic Laloux, Jenny Wade): ‘Reactive’ organisations (infrared colour), ‘magical’ (magenta), impulsive (red), conformist (amber), achievement (orange), pluralist (green) and evolutionary (teal).

Source: Frederic Laloux – ‘Reinventing Organisations’ (permission by the author)

It is obvious that we are making a statistical generalisation when we talk about ‘red’, ‘orange’, ‘amber’, ‘green’ or ‘teal’ corporations. Basically, these ‘colours’ represent certain sets of beliefs, mindsets, memes (Don Beck, Spiral Dynamics, Blackwell Publishing, 2006) of employees and of management in the first place.

Correspondingly, there are similarly matched beliefs about innovation within these organisations.

Types of innovation — types of organisations

Red

Nowadays, ‘Red organisations’ are the mafia or street gangs or tribal militias, in which all the power is concentrated in an ‘alpha’ around which a wolf pack gathers. The ‘alpha’ has the right to execute.

Amber

Conformist-Amber organisations brought forth two major breakthroughs: Long-term planning and stable and scalable organisational structures. Historically, Amber Organisations are the ones that have built irrigation systems, pyramids, and the Great Wall of China. Conformist-Amber Organisations ran the ships, the trading posts, and the plantations of the Colonial world. The Catholic Church is built on this paradigm — arguably it has been the defining Amber Organisation for the Western world. The first large corporations of the Industrial Revolution were run on this template. Amber Organisations are still very present today: Most government agencies, public schools, religious institutions, and the military are run based on Conformist-Amber principles and practices’ (Laloux, Frederic. Reinventing Organisations – A Guide To Creating Organisations Inspired by the Next Stage of Human Consciousness. Nelson Parker, 2014, p.37). The leadership of these corporations is similar to a militarist style: A tough leader dictates based on what feels good now, controls the freedom of everybody else and tests the worthiness of others who seek his attention.

Orange

Achievement-Orange’ organisations are characterised by three additional breakthroughs: Innovation, accountability and meritocracy. Walmart, Nike and Coca-Cola are all embodiments of this kind of organisation. Innovation refers to the fact that these organisations (and their leaders) dream of what might be. They are not conformist but challenge the status quo and find ways to improve it (innovation); use complex processes, projects and structures; and stress research and development, marketing, product management and so forth. Orange corporations are still hierarchical but also invent project groups, virtual teams, cross-functional initiatives, expert staff functions and so on. They are viewed and run as ‘machines’. Departments are parts of this machine, and they have to run smoothly altogether. The leadership is based on fierce competition inside and outside of the company, on bottom line results and on material gain.

Green

Pluralistic-Green’ organisations leave ‘power’ aside and sometimes also the hierarchy, as they might give all the workers all the power, decide by consensus and rotate leaders. Some of the most successful companies in this category are Southwest Airlines, Ben & Jerry’s, and The Container Store. They are ‘families’ where everybody has something to say and do.

As you may have understood up to this point, the leadership of the companies has become more and more lax and the structures more and more de-structured, less hierarchical and more ‘to the people and for the people’. The ‘green’ leader seeks and offers inner peace within the business environment (harmony within the group) and promotes consensus in decision-making and an ‘all must collaborate’ approach.

The next stage of innovation – Evolutionary Teal companies

Evolutionary-Teal’ companies are one step ahead in terms of leadership and chances to innovate as they are even more open and transparent. These companies embrace the following characteristics in pursuit of the company’s purpose: There are self-organising teams; coaches are consistently present; there is no formal managerial authority; there are no executive team meetings, and meetings are held only when needed; project management is simplified; self-projects are supported; there are no plans or a budget; prioritisation is organic; recruiting is done by future co-workers; there are no job titles and roles are fluid; individual calling aligned to the organisational purpose; there is extreme flexibility of time allocation between work and life issues; the focus is on team (instead of individual) performance; there are peer-based appraisals of performance; salaries are self-set; there is equal profit sharing; there are no promotions but rather a fluid rearrangement of roles; complete freedom exists for employees to speak up about others’ issues in the company; working spaces are self-decorated and warm; there are holacratic decision-making mechanisms; all the information about the company, including detailed financial data, is completely transparent; outsiders are welcome to make suggestions about anything; there are reflective spaces; the organisation is seen as a living evolutionary being with its own life; the irrelevant concept of competition (‘competitors’) is embraced to pursue the company’s purpose; strategy organically emerges from the collective intelligence; innovation is defined by purpose; there are no sales targets and no budgetary targets; spending is based on peer advice; there is distributed initiative; ‘change’ is no longer relevant as these organisations are fully ad hoc, adaptable, and so forth.

These companies are also sometimes called ‘holacracies’, a word describing their natural search for wholeness. Read this for more information. And this.

Hypothesis: red to teal = the authentic innovation journey

My idea is that when whole and authentic, creativity is natural, fractalic, unpredictable and coming from the wholeness of being. The types of companies mentioned before respond to the same principle of ‘both-and’ (instead of ‘either-or’ of the ‘red’, ‘amber’, ‘orange’ or ‘green’ companies) as is found in jazz improvisation and theatrical improvisation. The egos (company brand or employee status symbols) of these organisations are educated and brought very close to the self, as the purpose and only the purpose (an evolutionary and all-encompassing one) dictates the practices, norms, structures and flows in the company.

‘What you do not want to do is govern your organisation based on human “ego” needs, but rather based on what is needed for the purpose, and likewise, you do not want organisations to end up dominating the people, creating drones. Instead, you want people to be free, to be themselves. A holacracy is a very formal system, just not a very conventional system. Holacracy provides a very disciplined way of structuring an organisation but also lets people make changes that otherwise they couldn’t make’ (Brian Robertson, author of Holacracy: The New Management System for a Rapidly Changing World. Henry Holt and Co, 2015 — personal interview with the author).

As employees are aware and responsible for each part of their own job, innovation arises and flows when needed in the most natural way.

The more you move from the ‘red’ to the ‘teal’ on this ‘spiral’ (Don Beck), the more the male aspect of business dissipates and makes way for the feminine, integrative, collaborative side to kick in. Stability loses more strength and terrain, while freedom of thought, imagination and action rise up. The more competitiveness is dissipated within the company, the greater the need for a more collaborative, overarching and stimulating vision from the leadership side.

Types of purposes. Teal visions.

Some types of innovation purposes in organizations are to be found bellow. They are to be seen as leadership “declarations” regarding innovation within a company.

Red: “We will innovate to destroy any opposition in our market.”

Amber: “We have to innovate, no matter what. Silo ‘X’ has to deal with this.”

Orange: “Innovation means profit. Innovation has to increase by 25% by year end.”

but “profitability is not the purpose of, but a limiting factor on business enterprise and business activity. Profit is not the explanation, cause, or rationale of business behavior and business decisions, but rather the test of their validity” (Peter Drucker, ” Management: Tasks, Responsibilities, Practices” – New York: Harper & Row, 1973)

Green: “Each of us has to innovate. We hire only creative people. Our culture is one of innovation.”

Teal: “Do you have any ideas on how to cure AIDS? To solve the ecological issues of our world? To learn something new each day? On how this company might become a better place for you to work?

as “business has a much broader positive impact on the world when it is based on a higher purpose that goes beyond only generating profits and creating shareholder value. Purpose is the reason a company exists. A compelling sense of higher purpose creates an extraordinary degree of engagement among all stakeholders and catalyzes creativity, innovation, and organizational commitment” (Mackey and Sisodia, “Conscious Capitalism, With a New Preface by the Authors: Liberating the Heroic Spirit of Business” – Harvard Business Review Press, 2014).

Self-management leads to more innovation

In a solid reasearch done by Trudy C. DiLiello and Jeffery D. Houghton (“Maximizing organizational leadership capacity for the future: Toward a model of self-leadership, innovation and creativity” – Journal of Managerial Psychology Vol. 21 No. 4, 2006 pp. 319-337, Emerald Group Publishing Limited), it is shown how ‘individuals with strong self-leadership will consider themselves to have more innovation and creativity potential than individuals who have weak self-leadership, and that individuals who have innovation and creativity potential will be more likely to practise innovation and creativity when they perceive strong support from the workplace than individuals who perceive weak support from the workplace.’

This only means that in a Teal  company (where self-management replaces hierarchical pyramid and where employees are seen as whole members of a living organism), innovation and creativity becomes natural manifestations of these employees.

An appealing leadership vision leads to more innovation

As another research puts it (Dong I. Jung, Chee Chow, Anne Wu, The role of transformational leadership in enhancing organizational innovation: Hypotheses and some preliminary findings The Leadership Quarterly 14 (2003), pp. 525–544, Pergamon, Science Direct), ‘the findings support a direct and positive link between a style of leadership that has been labeled as ‘transformational’ and organizational innovation.’ This ‘transformational’ leadership style is characterized as being composed of ‘four unique but interrelated behavioral components: inspirational motivation (articulating an appealing and/or evocative vision), intellectual stimulation (promoting creativity and innovation), idealized influence (charismatic role modeling), and individualized consideration (coaching and mentoring).[…] By articulating an important vision and mission for the organization, transformational leaders increase followers’ understanding of the importance and values associated with desired outcomes, raise their performance expectations, and increase their willingness to transcend their self-interests for the sake of the collective entity. […] Intrinsically motivated people tend to prefer novel approaches to problem solving.’

Leading innovation

How can a company which resembles more the ‘red’, ‘amber’, ‘orange’ or ‘green’ organisations access the immense resources of creativity of the ‘teal’ organisations? Maybe just by mimicking the structure, processes and almost everything else of the latter.

But what is the essential aspect which must be copied? The answer is: The existence of an all-encompassing purpose, of a vision, for the business. And this is mainly an attribute of the leaders of that company, the CEO, the shareholders.

What can always be seen when great and disruptive innovation is spurred, whether it’s social, political, economic, cultural, artistic, is that there was a ‘meaning of life’ (or a persistent search for it) which was explicit and profound, vibrating in the air, a purpose higher than the mere purpose of the average person.

What a leader has to do in this respect, anywhere in the world, in any ‘colour of company’, is to listen to his company’s evolutionary purpose and real pulse, and declare it, embrace it, live with it, be scorched by it and make it his coat and flag. This will attract a number of people, while others will leave. The remaining ones will start the innovation revolution in this company, as a consequence of they’re being lifted up by a higher purpose.

When motivated by a life or death choice, people become either disruptive forces or adapters, but for sure when motivated by low stakes, they will converge around a low innovative apprehension.‘Think of the effect holacracy has on the human psyche. When somebody feels like “I don’t have to fight to get my change in”, it feels easy to make a change’ (Brian Robertson).

Conclusion

a. The more evolved a company is – the more innovative.

b. There are levels of development of any company. They heavily depend upon leadership consciousness level of development.

c. There is a clear link between the level of consciousness and the innovation apprehension.

d. The world is changing towards ‘teal’ forms of social, political, economical, cultural and religious structures.

e. Integral (teal) innovation presupposes an all-encompassing purpose, of a vision, for the business. And this is mainly an attribute of the leaders of that company, the CEO, the shareholders.

f. ‘Integral’ does not refer only to the purpose/ vision. This is only 1/4 of the whole understanding, the Upper-Left quadrant of the AQAL framework. Learn here.

4 Videos explaining what Integral Innovation is.

video the leadership spark resource 1

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