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Leading the Change: Better Business
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Leading the Change: Better Business
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Leading the Change: Better Business
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Articles
30 May 2022

Leading the Change: Better Business

Pioneering organisations are using business as a force for good, by changing our economic system and addressing society’s most critical challenges.

Written by Dumbo Feather

This story originally ran in issue #69 of Dumbo Feather

Discussed in this Story

B Corp

The message behind the B Corp model is that instead of functioning merely as a profit-making machine, businesses can be a force for good and help solve some of our largest social and environmental issues (as opposed to creating them). 

B Lab is pursuing this vision in three main ways: 

• changing the behaviour of businesses

• shifting cultural expectations around the role of business in society

• structural change in the legal requirements that surround business 

Around the world, B Lab works to create reform in each of these areas by getting governments on board with this new way of thinking and behaving. 

Central to B Corps is the idea of stakeholder governance, which represents a departure from the traditional shareholder governance model (where businesses cater to the wants and needs of a select few) and towards a system where everyone with a stake in the business – including the staff, wider community and planet – is considered in business decisions and actions.

B Lab’s overall vision is an economy that creates benefit rather than extraction and exploitation. Within this economy, business practices must be sustainable – and not just in the eco-friendly sense, but in the sense that organisations have to be able to operate in this reformed way again and again and into the distant future. This kind of long-term, proactive approach also makes organisations especially resilient during crises.  

Reinventing Organizations 

Self-published in 2014, Frederic Laloux’s book, Reinventing Organizations, is a kind of treatise on the future of our most fundamental organisations (businesses, non-profits, schools and hospitals). It’s built on the premise that humanity has evolved through several phases of organisational structures and is now “at the dawn of a new paradigm” that will see the emergence of “teal” organisations. 

Laloux’s hypothesis is that most current organisations cultivate disengagement by having a top-down management approach that sees them become “playfields for unfulfilling pursuits of our egos, inhospitable to the deeper yearnings of our souls.” Instead of workers being incentivised by their bosses (a situation where, he posits, no one is truly happy), Laloux suggests we could be motivated by our peers and, in the process, become more engaged. 

The colour system 

To explain his theory of how different organisations function, Laloux has created a system where organisational structures are classified as red, amber, orange, green or teal. In a “red” organisation (such as street gangs) people take action because their leaders exert power and control, whereas “amber” organisations (such as churches) rely on very fixed hierarchical structures and formal roles. 

Most current organisations fit in the “orange” category, which is characterised by the valuing of ideas such as profit, productivity, success, efficiency and meritocracy. Laloux points out that these organisations have helped build prosperity, extend humanity’s life expectancy and led to important breakthroughs – but also exploited Earth’s precious resources.  

“Green” organisations are founded on ideas such as co-operation, equality, tolerance, solidarity and culture over strategy. They are values-driven outfits that serve stakeholders rather than shareholders, and many non-profits fit into this category. Laloux writes that these organisations often involve teamwork and collaboration, but only because management has chosen to delegate some of its power to those occupying a position lower down in the hierarchy. 

“Teal” organisations take things a little further by removing bosses altogether. They still have leaders, but power and decision-making are largely decentralised. Staff members are accountable to their peers as opposed to their bosses and are mobilised by the desire to show up for their team. According to Laloux, this leads to greater engagement and a large pool of collective intelligence. 

The key features of a teal organisation are:

• wholeness (bringing one’s whole self to work – which might even involve bringing children or pets into the office) 

self-management (a high level of personal autonomy, where peer relationships take precedence and power does not rest with a select few) 

• evolutionary purpose (prioritising what the world needs). 

Laloux writes that there are only two things necessary for a teal organisation to develop: the leadership must have a worldview consistent with the teal paradigm, and the owners of the organisation must also share this view. Examples of teal organisations include Patagonia, Sounds True and Buurtzorg. 

Buurtzorg 

Dutch nursing care provider Buurtzorg (“neighbourhood care” in Dutch) is identified by Laloux as a teal organisation because of the way in which it has revolutionised the care industry in the Netherlands. For a period from the 1990s, nursing care fell into the hands of big (orange) businesses, who installed new processes such as time standards that urged nurses to maximise efficiency by rushing their visits. Buurtzorg created a management system where a 9,000-strong nursing workforce is able to operate in local communities with a high degree of agency and autonomy (rather than having to meet KPIs or constantly answer to those at the top). In doing so, Buurtzorg restored a localised, decentralised approach to care. Nurses are now able to spend adequate time tending to and connecting with elderly and unwell patients in their local communities, and patients can build rapport and become familiar with their local nurse. The model has been economically successful too: these patients have a high rate of self-sufficiency, meaning fewer nurses are needed, hospital admissions have reduced by a third and Buurtzorg patients generally have shorter hospital stays. 

This story originally ran in issue #69 of Dumbo Feather

This story originally ran in issue #69 of Dumbo Feather

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