Reinventing Organizations: Creating a Color-Coded Model of Business Development


The book "Reinventing Organizations" helps business owners define business development in a holistic perspective along with a color-coded guide to better development.

Reinventing Organizations

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Businesses evolve all the time, or at least we think they do.

In the age of constant and rapid change, businesses are supposed to be agile and nimble players in the game. They are supposed to gather customer data, develop ever-improving strategies and innovate like crazy.

At least that’s how it’s supposed to go …

In most cases, businesses, big and small, are in a battle between stability and growth. Many business owners and managers have read a marketing book and dreamed of their business growing and adapting in a truly innovative way. Then, they put the book down and life goes back to usual.

How do truly innovative people use their desire to grow beyond the limited thinking of their existing organizations?

Color-Coded Guide to the Innovative Business

Frederic Laloux, author and business coach (@fred_laloux), would say that it’s not the person or even the business that is the obstacle to truly innovative growth. It’s the entire business environment.

In his book, “Reinventing Organizations: A Guide to Creating Organizations Inspired by the Next Stage of Human Consciousness,” he presents a new model for understanding the business environment as one of progression from one stage to another.

That progress, Laloux says, involves a whole mindset that businesses in the modern era have bought into. The goal in “Reinventing Organizations” is to help business leaders who truly want to innovate understand where they are and where they can go.

“Reinventing Organizations” offers a color-coded model of business development from the “red” organization all the way up to “teal,” the ultimate goal of a business that wants to innovate. In the first part of the book, Laloux provides the concepts that define a company’s development. The colors are:

  • Red
  • Amber
  • Orange — Most good organizations would fall into this category
  • Green
  • Teal

For example, a defining feature of the “red” organization is control. In these types of organizations, there is a strict hierarchy, strict rules, and even stricter processes to ensure compliance.

The second half of “Reinventing Organizations” delves into characteristics of “teal” organizations. These are the successful organizations of the future, in Laloux’s opinion, with a high degree of flexibility, open systems, and organizational level that leads to amazing growth.

Research Behind the Color-Coded Guide

Laloux says he developed this color-coded model for success after analyzing the success of over 100 companies in addition to insights from biology, history, and human psychology. The result was a business development model that is supposed to compare business in the past, present, and future. The model sees business development as both an individual and collective process. In other words, your business develops within its own environment and within its time period.

To give more context, think about a train company from the late 1800s compared to today. Although the objective of both companies is the same (earn profit while decreasing costs), the way that this objective is achieved is understandably different. In the 1800s, there was more emphasis on control and physical labor (with fewer competitors).

However, that same train company in the present day would find itself focusing on innovation and competition with all forms of transportation.

This isn’t to say that all organizations follow the same development through history or that organizations that have strict procedures are bad. Laloux wants readers to understand the bigger picture.

Instead of just focusing all your attention on the next competitor, Laloux invites readers to consider business self-reflection:

  • Are the assumptions about our business still valid?
  • Do we still need to have so many layers of management?
  • What’s hindering us from being more adaptable?
  • What is our organization learning?

Laloux envisions businesses that work as living creatures, as supposed to being rigid systems where people just go through the motions.

Can the Color-Coded Model Apply to Your Business?

If you are an open-minded business leader, “Reinventing Organizations” provides a strong catalyst and rationale for business innovation. That being said, readers may not be comfortable with some of the underlying concepts.

Specifically, “Reinventing Organizations” takes some of its rationale from New Age-type spirituality (with discussion about consciousness and transcendence, for example.) These themes aren’t typically found in books on organizational development.

Since the book deals with weightier issues of spirituality and the evolution of humanity, “Reinventing Organizations” may be the wrong choice for business leaders seeking quick fixes.

It delves deeply into abstract concepts that can’t be quickly implemented and may intimidate readers seeking simpler business solutions. “Reinventing Organizations” is about more than business development. It’s about re-developing the concept of “business as usual” altogether. This article is based on an electronic copy of the book provided for reviewing purposes.

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Charles Franklin Charles Franklin is a Book Reviewer for Small Business Trends. He has a background as a professional reviewer, and is also a content provider and customer relations professional.