What Are Teal Organizations and How Do They Operate?
Origin of the concept
| Stage | Description |
|---|---|
| Red organization | The most primitive form of management, typical of tribal or criminal structures. Here, power and control are maintained through fear, brute force, and threats of punishment. |
| Amber organization | Characterized by a strict hierarchical structure and a system of rules. Decisions are made by higher-ups, and each participant occupies a strictly defined position. Advancement is possible only through the ranks of hierarchy. |
| Orange organization | A classic business model where value is placed on efficiency, innovation, and competition. Employees are viewed as resources to be managed for profit. The key tools are KPIs, motivation systems, and career advancement. Many international corporations of the 20th century developed according to the orange model. |
| Green organization | Prioritizes employee engagement, corporate culture, and work-life balance. Team spirit, respect and support for individuals play an important role here. Democratic leadership styles and employee development programs are implemented. |
| Teal organization | Company management is based on trust, employee autonomy, and flexible adaptation to changes. The goal of business is not only to make a profit but also to benefit society and follow its mission. |
Principles of teal organization management
Self-management
Wholeness
- admit a mistake or share doubts without fear of punishment;
- express emotions, propose ideas, and unleash their creativity, rather than hiding it behind the formal confines of their job title.
Evolutionary purpose
How the teal management model works
Teal organizations are distinguished by both their philosophy and values, as well as specific management practices.
Roles instead of positions
Roles can be swapped or combined depending on competencies, interests, and business objectives. Teams are formed dynamically: participants are recruited for a project or initiative, taking on the roles where they are most useful. A single person can hold multiple roles simultaneously (for example, an analyst, a mentor, and a project team member).
Consultation process
One of the most distinctive practices of teal companies. Any decision is made by the initiator, but before that, they must consult with:
- colleagues who will be directly affected by the decision;
- experts who possess relevant knowledge.
Although the advice is not binding, it should not be ignored: the initiator must consider the opinions before making a decision. This mechanism works faster than consensus, which requires general agreement, and is more flexible than an authoritarian model, where the sole leader makes the final decision.
Transparency of information
For teal organizations, openness is the norm. Access to key data is available to all employees, not just senior management. Company plans, financial indicators, project results, and performance metrics are open for everyone in the team. Employees can see the big picture and understand how their work impacts the outcome.
Leader as a helper
In the teal management model, the leader is not a boss in the traditional sense. Here, they act as a mentor and supporter, and their mission is to help the team move forward. Instead of controlling tasks, the leader removes obstacles and creates conditions for effective work.
Technological support
Modern teal organizations actively use digital tools that help ensure transparency, coordination, and self-management:
- internal databases are used for storing and sharing knowledge;
- kanban boards are used for task management;
- BI systems are used for analytics and performance evaluation.
Adaptability and responsibility
Teams can quickly adapt to new challenges, launch experiments, and test hypotheses. But for work to be truly effective, employees must be:
- highly motivated;
- willing to make independent decisions without external supervision;
- able to take responsibility and see initiatives through to results.
Pros and cons of teal organizations
| Strengths | Weaknesses |
|---|---|
| Engagement and motivation. The opinions of employees and management are equally important for decision-making. This can increase productivity and loyalty to the company. | Difficulty of implementation in large corporations. In organizations with deep hierarchies, transitioning to the teal management model can take years, and abandoning the traditional approach may result in conflicts. |
| Strong corporate culture. Openness and trust create an environment where ideas can be shared freely, initiatives expressed safely, and mistakes become the source for useful conclusions. | High requirements for employee maturity. Self-organization is impossible without internal motivation and personal responsibility. For employees accustomed to working under control and strict regulations, such freedom can become a source of stress. |
| Flexibility. When there is no rigid hierarchy and decisions are made locally, teams respond more quickly to market changes. New ideas can be implemented and tested without lengthy cycles of approval. | Risk of responsibility erosion. If mechanisms for assigning responsibilities are not implemented, there is a risk that unpopular or routine tasks will be left without a specialist assigned to them. |
| Resilience to internal crises. Structures are not dependent on a single decision-making center, which makes them more sustainable as standalone units. | Vulnerability to external factors. During periods of intense competition or economic instability, even teal organizations sometimes partially revert to centralized management. |
| Attractive employer brand. Appreciated by professionals who value not only salary but also self-fulfillment. | Slow coordination. In critical situations, the absence of rigid leadership can lead to protracted discussions and delays in work. |
Conclusion
Teal organizations represent a way to transcend the usual logic of business management and demonstrate that a company can rely not only on hierarchy and control but also on trust and responsibility. Implementing such a model requires time and a transformation of the management approach.
However, organizations are not obliged to follow this path entirely. Sometimes, adopting certain practices, such as information transparency or servant leadership, is enough to re-energize and motivate teams.
