By Andrea Cardillo, Managing Partner TPCL Italy
One of the most important things a leader can understand is the culture of the organisation in which he or she works, and the wider systems, processes and structures that govern it and fundamentally direct its everyday operations.
If you were to ask any given leader in any given business today to describe their business culture they would likely give you a variety of different answers. But as you gathered more and more data, you’d see clear patterns emerging.
Experts in adult development have done just that over the years, studying not only today’s organisations but those of the past. Experts like social scientists Clare Graves and Don Beck, and philosopher Ken Wilber. And most recently, in his best-selling book Reinventing Organisations (2014), Belgian author Frederic Laloux.
Laloux’s summary of the evolution of organisational culture is a useful one to get to grips with. Because in order to improve the efficiency, effectiveness and overall success of any organisation, you first need to understand where it’s at right now. So let’s look at the five key organisational cultures that have developed over several thousand years.
The evolutionary stages of cultural development
THE WOLF PACK (Red, Impulsive)
Characterised by a single chief using force, domination, loyalty and fear to exert power, this kind of organisation can still be seen today in the likes of criminal gangs.
Though short-termist and not suitable for today’s relatively stable economic and social environments, this type of organisational culture is very effective in chaotic environments. It also demonstrates an evolution from a complete lack of management toward hierarchical authority and the division of labour.
THE ARMY (Amber, Conformist)
Although not reserved for the military, an army would be a good example of this ‘command and control’ style of culture and leadership. Based on ethics, predictability and the creation of stability through rigorous processes, it can equally be applied to many religious, governmental or educational organisations.
The advantage of this culture is that it is based on stable, reproducible processes that allow long term perspectives, making it scalable. That said, it is also rigid and can often struggle to adapt to changing environments.
THE MACHINE (Orange, Achievement-oriented)
Many of today’s multinational companies operate within this type of culture, which developed around the industrial revolution. ‘Predict and control’ are the watchwords here, with efficiency, profitability and a goal-oriented focus being priorities.
Key breakthroughs in this stage of evolution included innovation, meritocracy and accountability through management by objectives. These organisations are, as their core adjective suggests, successful. But they may be limited by their focus on material aspects over real needs and inequality.
THE FAMILY (Green, Pluralistic)
This is the category in which many NGOs, associations and social enterprises sit. Emerging around the 1960s, they hold values such as belonging, justice, cooperation, consensus and empowerment to be essential.
These organisations have harnessed the benefits of social responsibility, power-sharing, and a corporate culture built on common values. Their main challenge is the dissonance between values such as supporting equality, and reality, which might include the need for hierarchy.
LIVING ORGANISM (Teal, Evolutionary)
This is Laloux’s proposal for an emerging iteration of highly successful business models and organisational development practices, with only a few examples currently in existence. These organisations are characterised by trust, free information, continuous learning, the power of individual decision and responsibility towards the organisation.
Laloux describes the key breakthroughs of these cultures as self-management, wholeness and evolutionary purpose, writing that their limits are yet to be discovered.
So what does this mean for leaders?
The goal of understanding history has always been to avoid making the same mistakes again. Just as vertical leadership development is about integrating and transcending a series of increasingly advanced action logics link to blog 1 – overview, cultural development is about drawing on the strengths of each preceding culture while striving towards the best of the next evolutionary stage.
Again, as with leadership development, it’s important to remember that evolution is not necessarily advantageous in and of itself. There are organisations that can thrive at each stage. And it is not essential – nor indeed preferable – that all become a Teal living organisation.
However, it’s important to at least be aware of the fact that business cultures do evolve at a macro or societal level. It is particularly worth noting that the organisations that excel in the future are likely to be those that can be pioneers, thinking outside the box and developing strategic approaches that transform not just their cultures but their business models too.
The importance of being able to evolve
Every organisation needs to be able to respond to the demands on the environment in which they operate. 2020 highlighted this with flashing neon signage. The future has never been certain but the scale and scope of change we’re living through is, dare we say it, unprecedented.
If an organisation is currently unable to respond, it’s important for its senior leaders to be able to step back and look at the assumptions on which a current structure was based and ask whether they still hold. What action logics were the leaders of the past displaying in the choices they made, and what might be possible for the future?
For an organisation to go through a transformational change rather than an incremental one, the senior leadership team needs to be aligned and operating within those higher action logics. Because their thinking creates the structures that drive behaviours, which in turn create culture.
For the individual leader, this poses questions around whether they have the skills they need to lead their business into the future. Not just practical skills but cognitive ones – the action logics link to blog 1 that we gain in order to develop vertically by becoming more self-aware, more able to take the perspective of others, and more able to think strategically.
This is the third in a series of five articles on Vertical Leadership.
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