This article is an excerpt from the Shortform book guide to "Reinventing Organizations" by Frédéric Laloux. Shortform has the world's best summaries and analyses of books you should be reading.
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Do organizations have callings just as individuals do? Does your company allow you to be yourself?
In Reinventing Organizations, Frédéric Laloux discusses three common elements of organizational culture within visionary companies: purpose, authenticity, and trust. Only this kind of organizational culture can foster the practices that set these exceptional companies apart from the rest.
Keep reading to learn about three elements of organizational culture that are present in visionary companies.
The Culture of Visionary Organizations
The practices that define visionary organizations—flexible roles, self-directed decision-making, a non-hierarchical sharing of power, and team-centered feedback and conflict resolution—can be maintained only within a certain kind of culture. Though cultures are unique to every organization, Laloux identifies many commonalities among the companies included in his research. These elements of organizational culture include placing a meaningful purpose at the core of the company’s mission, encouraging all employees to be their authentic selves at work, and building an air of transparency and trust that permeates the whole organization.
(Shortform note: Marcus Buckingham and Ashley Goodall offer a contrary view in Nine Lies About Work. They argue that overemphasizing a company’s culture can be harmful, especially if the culture only addresses surface-level issues and makes employees feel the need to conform. Instead, Buckingham and Goodall place more value on healthy, supportive teams.)
The strongest driver of the company’s culture is its overriding purpose in the world. As Laloux explains, this purpose is not dictated from on high but emerges organically from the work the company does and the values of its members. This purpose replaces profitability as the reason for the company’s existence while guiding how it interacts with competitors, clients, and the community at large. For example, a software company whose higher purpose is to raise computer literacy in impoverished areas might offer discounts to elementary schools and libraries, or partner with them to seek grants for funding.
Laloux asserts that, from a visionary perspective, organizations have a calling, just as people do. While an organization’s calling is initially determined by its founders, it can change. The needs of the world may align with the company’s values in surprising ways, pushing the organization in new directions.
The shift from “profit” to “purpose” as the prime motivator means that fear for survival is no longer an underlying factor. Laloux says that visionary organizations act from an attitude of abundance. When the mission is paramount, visionary companies will often aid their own competitors, if doing so helps them achieve their goals. To be sure, profits are necessary, but visionary organizations view them as a byproduct of fulfilling the company’s purpose.
The culture of visionary organizations goes beyond merely furthering the company’s mission. Laloux claims that these organizations put a priority on enabling their workers to grow into their own potential. Visionary companies are places where employees find a safe space to show up as themselves, be treated as adults, and flourish in an environment of healthy collaboration.
Laloux points out that companies with visionary cultures encourage people to be fully present, quirks and all. With no hierarchy, colleagues relate to each other as adults and are able to see each other as people, not merely cogs in a machine.
In order for people to bring their whole selves, the company must be a safe space to do so. Laloux shows that visionary companies accomplish this by training everyone in leadership skills such as listening, coaching, gratitude, and authenticity.
These companies’ high-minded ideals rely entirely on the trust between workers and the organization. Therefore, says Laloux, it’s imperative that organizations demonstrate their trust by allowing everyone to act responsibly without a system of controls, in particular doing away with the compartmentalization of information. Laloux argues that total transparency is essential in building trust between an organization and its members.
Transparency lets employees honestly evaluate their own teams and others while increasing their sense of ownership of the company’s successes and failures.
By distributing power, visionary companies make use of the whole organization’s intelligence while forcing tough decisions on individuals and teams who otherwise would have been told what to do.
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Here's what you'll find in our full Reinventing Organizations summary:
- The practices and values that are inherent in the next level of human organization
- A look at the paradigm shifts in organizational structure over the past 10,000 years
- How to implement visionary practices at your company