Before diving in to the deep end, it’s good to explore how we got here. As Laloux explains in his world changing management book, there are five main organizational models the humankind has seen so far. To distinguish them from each other easily, they are color-coded: Red, Amber, Orange, Green and Teal. I figured it’s useful to go through these briefly in order to recognize the different dynamics and benefits of each of these models and to understand how they have evolved to their latest form. Remember, one model is not necessarily better than the other. It only means that it’s well adapted to certain contexts and can handle it despite certain complexities, compared to others.
Examples of the impulsive RED organizations include mafias and street gangs. Just like in wolfpacks, there is a strong ruler, an alpha leader, who constantly exercises power to keep their subordinates in line. Ruling by fear works as a glue to keep the organization running, but makes the environment highly volatile since the servants constantly fight each other to get ahead. Oddly enough, these groups thrive in chaotic environments since they are very much reactive to changing and uncertain conditions. The downside of the reactivity is that they end up focusing mainly in short term gains. The key breakthroughs of the RED model are the division of labor and the command authority.
Sound familiar? Gordon Ramsay yelling at chefs in TV-shows can give viewers a good laugh but it’s actually not far from the truth, it still happens in highly competitive kitchens. We have all heard from our chef or bartender friends, or witnessed it ourselves, how obnoxiously abusive the head chefs or restaurant managers can be. Accordingly, the division of tasks and obeying higher ranked chefs in a chaotic and impulsive kitchen can be highly efficient. In the short term it works – the food is served on time – but at what cost? Considering the long term costs of a RED kitchen – sleep deprivation, burnouts, drug abuse or even suicide – I can’t help thinking there must be other ways to achieve the same results, without the absurd abuse of your greatest assets – the people.
Examples of the conformist AMBER organizations include most government agencies, public school systems and the military. Moving from the wolfpacks to army type models is apparent in formal job titles and job descriptions within the hierarchy pyramid. The hierarchy relies on top down command and control mechanisms. In other words, the decisions are made at higher levels of the hierarchy while lower levels simply follow orders. Stability is the prime value which is monitored and disciplined through rigorous processes. In AMBER, forecasting and planning for the future is solely based on repeating the past. The key breakthroughs are, as mentioned before, the precise job roles which makes the organization stable and scalable, and the meticulous processes that enables laying down long term perspectives.
Many bars and restaurants operate in ways related to the AMBER model. The top down structure of having a general manager, a bar manager, shift managers, and everyone in between all the way “down” to barbacks, is accustomed. The different job roles, although sometimes overlapping, enables justifying wage gaps and to a degree, a pecking order. In a way, giving access to only some of the staff members to void an item from an open table or making staff ask for the manager to open the cash register just to break a note so that the guest can leave a tip, are signs of the AMBER influenced model.
Examples of the achiever ORANGE organizations include almost any modern day multinational company or private school. The pyramid from AMBER is still present, but the company is now seen as a machine where every component has it’s precise task and goal set for them. The targets are still given from above but there is some freedom on how to achieve them in order to beat the competition and to boost innovation. As a result, more departments (HR, PR, R&D) are created attempting to grease the wheels of communication between the units. While innovation, accountability and meritocracy (status based on merits) are key breakthroughs of the ORANGE model, it has lead to concentrating much of the power at headquarters – unfortunately far away from the ground level operations.
In the restaurant world, big chains and global brands are most commonly operating with an ORANGE view. During the hiring process you might not see any future coworkers or managers since you only have a chat with HR, instead of getting acquainted with the people you would work with. Menu changes and RnD is done somewhere layers above you and then dictated down to the ground floor. Moreover, every department and manager is focused only on reaching their own targets in order to stay relevant and to keep the budget that was assigned to them. While unity is beneficial for franchisees, the lack of personality or chance to feel empowered can be counterproductive.
Examples of the pluralistic GREEN organizations include culture driven organizations where the focus is more on the purpose rather than profits. As before, the pyramid structure and strong staff departments are still present, but there is an emphasis on empowering the front-line employees. This is sometimes referred to as the upside-down pyramid, where the CEO at the bottom is supporting the managers who support the front-line. On top of that, GREEN organizations focus on promoting a family-like work culture to achieve exceptional employee motivation. The empowerment is noticeable on how top and middle managers are sharing power and giving up some of their control. Overall, the decisions are consensus oriented and everyone’s opinion is taken into account.
The stakeholder concept is also endorsed in these companies. The concept emphasizes the interconnected relationships between a business and its customers, employees, suppliers, investors and communities, not just its shareholders. Danny Meyer, the owner of Eleven Madison Park, Gramercy Tavern, Shake Shack and other famous restaurants in New York City, writes about the importance of the comprehensive understanding of looking after all the stakeholders in his business and hospitality book – Setting the Table: The Transforming Power of Hospitality in Business, 2006. If you haven’t read it yet, get your hands on it. Get it from Amazon if need be, or I can lend it to you, we’ll figure it out.
To sum up, the key breakthroughs in GREEN organizations are the empowerment of the staff and the emphasis on value-driven culture together with the stakeholder model. In some cases, the highly democratic “everyone is equal” approach can, on the downside, result in long decision making processes when trying to find consensus between everyone. Pleasing everyone can also result in a watered down final decision.
Green values have been booming in many ways in the restaurant industry during the past 10 years. But I haven’t witnessed the GREEN organization model in full action in the venues I have worked so far. I believe the model has taken the sustainable, zero-waste and recycling movement form inside the bars rather than being the core ideology in the heart of their management practices. Even if “pay what you want” and “buy a coffee for a stranger” practices showcase the GREEN model being used in some food courts and restaurants nowadays, it’s more in the aspect of the business to consumer relation, rather than business to employee relation.
Examples of the evolutionary TEAL organizations include Patagonia (clothing company), FAVI (automotive industry) and Buurtzorg (healthcare organization). In these organizations, the hierarchical pyramid has been replaced with self-management practices. The company is seen as a living organism, with its own creative potential and evolutionary purpose. As mentioned in a previous post, TEAL companies leadership style enhances distributed authority, by recognizing the people to be ultimately good. Moreover, the assumption is that peoples primary motivator and driving force is their purpose. To sum up, TEAL organizations are recognized as complex adaptive systems built from decentralized self-managing teams together with naturally born networks and “hierarchies”.
The key breakthroughs of the TEAL model are self-management practices, wholeness at the work place and the emphasis on a person’s evolutionary purpose. When the traditional top down pyramid is taken out of the picture, the power flows to the people who have the most expertise, passion or interest in the matter in hand. To ensure the dynamic adjustment of “hierarchies” and that the power can work for the teams benefit, a range of specific practices are introduced to the setting. These practices are the ones I will be writing about in this blog, accompanied with examples from the restaurant industry.
Since TEAL is a pioneering organization model, there are not many examples from the restaurant industry so far. But that’s about to change -with your help.