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Organizational Development has evolved together with human society development. At least 5 main organizational systems have been recognized through anthropological research throughout human history.
This phenomenon has been explained in various ways by various specialists. In 2014, Frederic Laloux began examining developing firms that distinguished themselves from established organizations in their management style. Laloux analyzed a vast number of companies before focusing on 10. The selected companies were the most innovative in terms of developing business practices and structures.
He named the distinct stages of management evolution utilizing Ken Wilbur's method of using colors to describe the non-linear development of human civilizations.
The colors Red, Amber, Orange, Green, and Teal have been used to represent the 5 stages of organizational development that correspond to the growth of human civilization.
Let's go a bit more into some details of the 5 sorts of organizations.
Red
The 1st stage of organizational growth is defined by the leader's consistent use of authority to maintain harmony among the foot troops. The organization's emphasis is particularly reactive and quick. This form of management thrives in chaotic environments.
In this style of organization, the Division of Labor and Command Authority were significant developments.
Humans during this stage of development have a tendency to regard the world as a hostile environment where only the formidable or those they protect get their needs satisfied.
Amber
The 2nd stage of organizational growth is characterized by precise responsibilities inside a hierarchical pyramid. In such a systems, command and control flow from top to bottom. In this form of management, future events are a repeat of the past. Formal roles, i.e., stable and scalable hierarchies, and stable and reproducible procedures, are significant developments of this stage. Examples are that of institutions such as the Catholic Church and the Military.
Orange
At the 3rd stage of organizational development, the objective of management is to overcome competitors while achieving growth and profit. Management By Objectives (M.B.O.) characterizes the management style; what has to be done is controlled, but how it is to be completed is left up to the doer. Modern examples include global corporations and charter schools.
Green
At this stage, the focus is on culture and capability to improve employee motivation. Stakeholders replace shareholders as the primary operating motive. Postmodernism introduced the Green phase, which stresses cooperation over competitiveness and strives for Equality, Solidarity, and Tolerance.
Teal
In this phase in the development of management, self-management has replaced the hierarchical pyramid. Organizations are seen as living entities that strive to realize their full potential.
Interested in learning more about 5 Stages of Management Evolution, particularly about Teal Management? You can download an editable PowerPoint presentation on 5 Stages of Management Evolution here on the Flevy documents marketplace.
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Organizational Design (AKA Organizational Re-design) involves the creation of roles, processes, and structures to ensure that the organization's goals can be realized. Organizational Design span across various levels of the organization. It includes:
- The overall organizational "architecture" (e.g. decentralized vs. centralized model).
- The design of business areas and business units within a larger organization.
- The design of departments and other sub-units within a business unit.
- The design of individual roles.
In the current Digital Age, there is an accelerating pace of strategic change driven by the disruption of industries. As a result, to remain competitive, Organizational Design efforts are becoming more frequent and pervasive—with the majority of organizations having experienced redesign within the past 3 years. This has only been exacerbated by COVID-19.
Frustratingly, only less than a quarter of these Organizational Design efforts are successful. Most organizations lack the best practice know-how to guide them through these Transformations effectively.
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