Teal Organization:
Leadership as Coaching
for Autonomous Teams

How can compa­nies respond appro­pri­ate­ly to today’s dynam­ic changes in markets and technologies?

In response to this ques­tion, McKin­sey consul­tant and New Work thought leader Fédéric Laloux devel­oped a theo­ry of the evolu­tion of organ­i­sa­tion­al forms in 2014. It culmi­nates in what appears to be a radi­cal depar­ture from the hier­ar­chi­cal lead­er­ship pyra­mid – towards a large­ly self-manag­ing network of teams. With his model of a ‘Teal Organ­i­sa­tion’ (TO), we are contin­u­ing our series on uncon­ven­tion­al, inno­v­a­tive lead­er­ship concepts as part of the Valdivia Lead­er­ship Impulse.

Laloux’s colour theo­ry: the evolu­tion towards self-management

In his theo­ry², Laloux posits that human organ­i­sa­tion­al forms have evolved over time. He marks the main stages with colours. ‘Amber’, for exam­ple, char­ac­teris­es strict­ly rule-based organ­i­sa­tions, such as those typi­cal of 19th- and 20th-centu­ry indus­try. For many compa­nies in the construc­tion and prop­er­ty sectors, today’s organ­i­sa­tion­al form is like­ly to corre­spond most close­ly to the ‘Orange’ stage described by Laloux: organ­i­sa­tions are flex­i­ble, yet still hier­ar­chi­cal and strong­ly focused on effi­cien­cy and results.

Final­ly, at the ‘Green’ stage, corpo­rate culture, purpose and envi­ron­men­tal and social respon­si­bil­i­ty comple­ment the econom­ic objec­tive. Employ­ees expe­ri­ence a grad­ual empow­er­ment, whilst managers tran­si­tion from being doers to support­ers. We recent­ly present­ed a model of green organ­i­sa­tion with Invis­i­ble Lead­er­ship.

The ‘Turquoise’ stage: self-organ­ised agility

Today, Laloux sees anoth­er stage of devel­op­ment emerg­ing, the prin­ci­ples of which he believes are already being put into prac­tice in some organ­i­sa­tions: he views the teal organ­i­sa­tion as a living system that constant­ly adapts to chang­ing condi­tions and evolves with­out central control. Howev­er, he does not see this as a single blue­print with a ready-made organ­i­sa­tion­al chart, but rather as a toolk­it of ideas and imple­men­ta­tion tools.

At the heart of ‘Turquoise’ lies a high degree of self-organ­i­sa­tion. Deci­sion-making powers are dele­gat­ed to employ­ees, which is intend­ed to foster commit­ment, person­al respon­si­bil­i­ty and person­al devel­op­ment³:

• A key start­ing point is empow­er­ing employ­ees to devel­op an aware­ness of the signif­i­cance of their own role. Above all, they should recog­nise that they can active­ly influ­ence decisions.
• Mutu­al commit­ments amongst colleagues replace the rela­tion­ship with line managers. Trust forms the foun­da­tion of this collab­o­ra­tion. Laloux iden­ti­fies an impor­tant prereq­ui­site for this as the abil­i­ty to view one’s own ego objec­tive­ly and not to allow it to dictate one’s daily work.
• The work is carried out by decen­tralised, self-manag­ing teams or networks. The hier­ar­chi­cal struc­ture of respon­si­bil­i­ties and autho­ri­sa­tions gives way to fluid, natur­al rela­tion­ships, in which the indi­vid­u­als with the most exper­tise and the strongest inter­est take the lead in each situ­a­tion. Freed from the rigid­i­ty and iner­tia of typi­cal command-and-control struc­tures, turquoise organ­i­sa­tions, accord­ing to Laloux, gain in respon­sive­ness and motivation.
• An impor­tant element of the TO is a gener­al set of rules that helps teams stay on course, coor­di­nate their actions and resolve conflicts.

Situ­a­tion­al author­i­ty replaces tradi­tion­al leadership

Above all, the turquoise organ­i­sa­tion is free from hier­ar­chies deter­mined by the estab­lished power or posi­tion of indi­vid­u­als. Anyone who iden­ti­fies a prob­lem or an oppor­tu­ni­ty can initi­ate a deci­sion-making process, whilst also draw­ing on the organisation’s collec­tive intel­li­gence. Never­the­less, stable struc­tures may occa­sion­al­ly form with­in the TO based on expe­ri­ence, compe­tence and recog­ni­tion, and ‘supe­ri­ors’ are also assigned impor­tant tasks:

• Team lead­er­ship: flex­i­ble and situation-specific
• Depend­ing on the team and the task, those colleagues who bring greater exper­tise and passion to the table, and in whom the other team members place the neces­sary trust as deci­sion-makers, take the lead.
• Manage­ment: coach­ing and counselling
• A char­ac­ter­is­tic of the TO is the absence of a middle manage­ment layer. Instead, partic­u­lar­ly expe­ri­enced and qual­i­fied colleagues play an impor­tant role. They support the teams as need­ed, acting as coach­es to ensure the team func­tions effec­tive­ly, to coor­di­nate with other teams, or to contribute special­ist expertise.
• C‑Suite: Setting the frame­work, foster­ing culture
• For top manage­ment too, the TO repre­sents a signif­i­cant shift in role models⁴: the func­tions of hier­ar­chi­cal control and deci­sion-making are large­ly elim­i­nat­ed. Instead, their task becomes
• to safe­guard and promote the organisation’s purpose, culture and cohesion,
• to create the frame­work for self-organ­i­sa­tion and to dele­gate deci­sions to the teams,
• and to support gener­al devel­op­ment, learn­ing process­es and conflict resolution.

Team­work in the TO

In the TO, the indi­vid­ual teams work autonomous­ly in prin­ci­ple, much like a busi­ness unit, and carry out all project tasks entire­ly on their own. This instils a sense of self-effi­ca­cy in team members and is there­fore also a strong moti­va­tion­al factor. The method­olog­i­cal basis for their work consists of sets of rules, also known as mani­festos, which describe, for exam­ple, deci­sion-making process­es. These rules provide employ­ees with guid­ance and strength­en cohe­sion. They also serve to resolve conflicts; for this purpose, exter­nal facil­i­ta­tion is usual­ly provid­ed as well.

In addi­tion to special­ist and front-end teams, the TO also provides for teams with a pure­ly support­ive func­tion. Such teams may, for exam­ple, be respon­si­ble for HR or office manage­ment – tasks for which it would be uneco­nom­i­cal to assign them to each indi­vid­ual team.

Could your compa­ny become ‘Teal’?

The deci­sive factor in switch­ing to the Teal model should always be the ques­tion of whether a compa­ny and its tasks would actu­al­ly bene­fit from distrib­uted respon­si­bil­i­ty⁵:

• Strengths and advantages
• TO combines an inno­v­a­tive form of collab­o­ra­tion with the aim of achiev­ing measur­able improve­ments in busi­ness perfor­mance. Self-organ­ised teams help to reduce admin­is­tra­tive burden and staff turnover, whilst deci­sions are made clos­er to the customer and thus often more quick­ly. Further­more, TO fosters a culture in which conflicts become appar­ent at an early stage and can be resolved through defined processes.
• In the long term, the TO model has a posi­tive impact, as it more close­ly links econom­ic success, corpo­rate purpose and the inter­ests of stake­hold­ers. This makes compa­nies more agile, resilient and sustainable.
• Barri­ers and limitations
• Teal organ­i­sa­tions are not regard­ed as a univer­sal model for success. In prac­tice, attempts to imple­ment them often fail due to unclear respon­si­bil­i­ties or when hier­ar­chies are disman­tled with­out estab­lish­ing balanc­ing mech­a­nisms for coor­di­na­tion, priori­ti­sa­tion and conflict reso­lu­tion. Simi­lar­ly, the model requires employ­ees who can act inde­pen­dent­ly, cope with uncer­tain­ty and make decisions.
• Teal struc­tures also reach their limits where legal require­ments or safe­ty stan­dards demand clear­ly defined responsibilities.

To date, there have been very few stud­ies on the success and preva­lence of Teal organ­i­sa­tions. Howev­er, one frequent­ly cited study³ indi­cates that Teal prin­ci­ples are primar­i­ly applied on a selec­tive basis or in specif­ic areas where agili­ty, decen­tralised deci­sion-making and cultur­al change are already on the agenda.

Conclu­sion

The Teal Organ­i­sa­tion is a concept for compa­nies that wish to respond to rapid changes in their envi­ron­ment with swift adap­ta­tions based on a resilient struc­ture. The key feature of the TO is self-manag­ing teams of employ­ees who are aware of their roles and respon­si­bil­i­ties as co-deci­sion-makers with­in the organ­i­sa­tion, whilst more expe­ri­enced colleagues act not as line managers but as coach­es or coordinators.

Howev­er, the Teal organ­i­sa­tion should not be seen as an ideal model for every compa­ny and every sector. A nuanced assess­ment is partic­u­lar­ly recom­mend­ed for deci­sion-makers in the construc­tion and prop­er­ty sectors: in which areas can agili­ty and person­al respon­si­bil­i­ty effec­tive­ly enhance your company’s success, and where do clear lines of respon­si­bil­i­ty remain indis­pens­able? For exam­ple, project devel­op­ment, inno­va­tion or customer-facing areas such as services could bene­fit from greater decen­tral­i­sa­tion, whilst gover­nance, regu­la­tion and risk manage­ment contin­ue to require clear lines of responsibility.

Sources

1. The English colour term ‘teal’ (web colour code #008080) describes a dark turquoise with a green­ish tinge, which is occa­sion­al­ly also referred to as petrol.
2. Frédéric Laloux: ‘Rein­vent­ing Organ­i­sa­tions: A Guide to Creat­ing Organ­i­sa­tions Inspired by the Next Stage of Human Conscious­ness’, Febru­ary 2014 – in German: ‘Rein­vent­ing Organ­i­sa­tions: A Guide to Design­ing Mean­ing­ful Forms of Collab­o­ra­tion’ (avail­able online, includ­ing on Google Books)
3. Agniesz­ka Rzep­ka: “Teal Organ­i­sa­tions in Times of Indus­try 4.0”, Euro­pean Research Stud­ies Jour­nal, Volume XXIV, Special Issue 2, 2021
4. “Teal Organ­i­sa­tions as the New Work Ideal”, Haufe, August 2020
5. “Teal Organ­i­sa­tion”, Moon­camp Glos­sary (Moon­camp strat­e­gy plat­form), June 2026

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