Originated from Frederic Laloux’s famous book “Reinventing Organizations,” Laloux Culture Model has been widely used as a guiding tool in agile transformation and as an influential reference in agile related discussions. As its name implies, this model not only distinguishes different management philosophies in various businesses, but also sheds light on the aspect of culture change that goes side by side with organizational evolution.
In agile context, Laloux Culture Model reveals five levels of maturity in terms of organizational agility in correspondence to agile culture development:
Level 1: Red Organizations
Red organizations are analogized to a wolf pack. Power is highly concentrated in one or a few persons — the chieftain(s), and exerted through generating fear. They’re highly short-term focused and very effective in chaotic environments. Typical examples are mafia, street gangs, and tribal militias.
Level 2: Amber Organizations
Amber organizations are similar to armies. They are featured by a strict hierarchy with highly formal roles and straight reporting lines. This type of organization thrives in stable and predictable environments. Good examples include public schools, traditional churches, and government agencies.
Level 3: Orange Organizations
Orange organizations are metaphorized to machines. They aim at beating competition and achieving profit and growth through innovation. They are result-oriented; accountability and meritocracy based on delivered results are reflected in their management processes and reward systems. Representative examples are large corporations and public universities.
Level 4: Green Organizations
Green organizations resemble families. Although still operating in a hierarchy, they focus on empowerment and motivate people by a shared purpose and value-driven culture that are beyond profit — creating value for all stakeholders in a balanced way. This type of organization applies participative, servant leadership that encourages consensus decision making and employee engagement. Good examples include Ben&Jerry’s, Southwest Airlines, etc.
Level 5: Teal Organizations