Turquoise Companies: 5 Reasons to Work for Them

Contents:

• Turquoise Company: A New Organization Model
• Turquoise Management Style in Russia: Who's at the Forefront?
• Motivation: A Driving Force or a Slowdown for Turquoise Companies?
• Advantages of Turquoise Companies: Why Choose This Approach?
• Turquoise Companies: A Unique Approach for 2% of Employees
• What Difficulties Arise in Implementing Turquoise Practices?
• Reasons for the Low Popularity of Turquoise Companies in Russia
• Problems with Applying Turquoise Models in Russia
• Turquoise Companies: Are Success and Profitability Possible?
• Should an Employee Strive to Work for a Turquoise Company?
• How to Implement the Turquoise Approach in a Company?

Turquoise Company: A New Organization Model

Turquoise companies are a modern approach to business organization, in which traditional hierarchy gives way to horizontal structures. In such organizations, teams and departments operate autonomously, collaborating on shared values ​​and goals rather than strict KPIs and predetermined plans. This fosters highly engaged employees, who take personal responsibility for their work. As a result, Teal companies can more effectively adapt to market changes, improving overall productivity and employee satisfaction. An evolutionary purpose is the foundation of every Teal organization. It represents a meaningful mission that all employees strive to achieve. This fosters unity and fosters team cohesion, as employees who don't share these values ​​are discouraged. This approach not only increases employee engagement but also improves the overall company atmosphere, which in turn positively impacts its development and the achievement of its goals. Integrity is a key aspect of Teal companies. In such organizations, every employee is perceived as a complete individual. It is important to consider not only professional skills but also the personal aspirations, emotions, and desires of employees. This approach fosters a positive work environment where everyone feels valued and heard. This focus on individuality fosters motivation and engagement, which in turn positively impacts productivity and the company's overall results. Self-management is an important aspect of corporate culture. Employees are empowered to make decisions independently, which fosters a sense of responsibility for their work. This approach not only increases motivation but also develops leadership skills and initiative among team members. As a result, the organization gets a more flexible and adaptive team, capable of effectively responding to changes and achieving its goals.

Teal Management Style in Russia: Who's Leading the Way?

In recent years, the Teal management approach, based on Western practices, has been actively implemented in Russia. Pioneers of this style include companies such as VkusVill and various EdTech startups. This approach, which emphasizes informality and flexibility, quickly gained popularity among startups, attracting the attention of job seekers seeking modern working conditions. Unlike Russia, Teal companies in the West actively embrace work-life balance trends, reflecting society's growing demand for a more humane and conscious approach to the work process. Examples of such companies include Google and Patagonia, which serve as benchmarks for many organizations seeking to create a comfortable and productive work environment.

Motivation: A Driving Force or a Brake for Teal Companies?

The concept of Teal organizations appears to be quite attractive from a theoretical perspective. It implies the creation of a team of professionals working independently and with a high level of engagement. However, in practice, certain difficulties arise. An example is VkusVill, which is considered one of the most successful Teal organizations. However, it faces problems with performance instability. This raises an important question about the real effectiveness of management models based on the principles of Teal organizations. It is important to understand that, despite ideal concepts, real work in such structures may require additional efforts to achieve stable results.

An analysis of VkusVill's financial statements indicates that revenue growth is a key factor in its success. However, labor productivity has raised concerns in recent years. From 2016 to 2018, labor productivity declined by more than 30%, and this trend continued, albeit at a lower rate, from 2019 to 2020. This decline in productivity is attributed to accelerated headcount growth, which significantly outpaces revenue growth. This poses the challenge for the company to optimize work processes and improve labor efficiency to ensure sustainable development.

Sergey Novosad, HR Director of Absolut Bank, attributes the low productivity of employees at teal companies to the fact that many of them attract people tired of traditional control. He emphasizes that such employees strive for freedom and creativity, but they often forget about achieving end results. This can negatively impact overall performance and the achievement of company goals. It's important to find a balance between freedom of action and the need to focus on results to ensure the successful functioning of the team and the company as a whole.

Despite successful examples, many Teal companies face performance challenges. Novosad emphasizes the importance of adhering to so-called "leadership maxims": building trust must be harmoniously combined with self-discipline. He emphasizes that in a successful company, these two aspects interact. However, many organizations confuse self-discipline with control, which can lead to management errors. It's important to recognize that effective management requires not only trust but also the ability of employees to make independent decisions, which in turn contributes to the company's overall productivity.

Grigory Pakhomov, a strategic development consultant, identifies laziness as the main enemy of Teal organizations. He cites research showing that employees are productive only 20-30% of the time. While traditional companies may employ administrative management methods, Teal organizations lack management, requiring every employee to be actively involved in the overall process. This emphasizes the importance of motivation and self-organization in today's work environment, where success depends on the initiative and responsibility of each team member.

Criticism of Teal management models emphasizes the importance of balancing freedom and responsibility in organizations. Models that fail to demonstrate high performance lose their appeal to employees. Therefore, it is necessary to develop effective strategies to increase employee motivation and engagement. This will not only maintain interest in such management models but also improve the company's overall performance.

The Benefits of Teal Companies: Why Choose This Approach?

Teal companies represent a modern approach to work organization based on reducing bureaucracy. This contributes to increased efficiency and flexibility of business processes, which is especially important in a dynamically changing market. In such organizations, an emphasis is placed on self-organization of teams and trust between employees, which allows for faster adaptation to changes and decision-making. As a result, teal companies are able to not only improve their productivity but also create a more comfortable working environment, which in turn contributes to increased employee satisfaction and reduced turnover.

Among the main advantages of such organizations, it is worth noting the high motivation of employees, their loyalty, and personal responsibility for the results of their work. Each employee is aware of their importance and strives for continuous professional development. This helps create a productive atmosphere in which the team works to achieve common goals.

The principle of non-hierarchy is a key aspect of Teal companies. In such organizations, no one has the right to make decisions regarding financial compensation or other significant issues without the consent of the entire team. This creates an atmosphere of trust and engagement, where every employee has an equal voice and can influence important decisions. This approach promotes increased motivation and responsibility, which, in turn, positively impacts the company's performance.

Clients benefit from partnering with Teal companies. Corporate transformation expert Dmitry Adushev notes that in such organizations, employees are empowered to make decisions. This allows them to promptly respond to customer requests, which in turn improves service levels and strengthens trust in the company. Teal companies strive to create an environment where every employee can actively participate, making customer interactions more efficient and productive.

At a mobile retail store operating under the Teal management model, employees are empowered to independently process returns of defective goods on-site. This significantly speeds up the resolution of customer issues and improves service levels. This approach fosters employee accountability and creates a more effective work environment. As a result, customers receive fast and high-quality solutions to their issues, which positively impacts the store's reputation and competitiveness.

Employees recognize their importance within the company and feel that their opinions are taken into account. It is important to note that the Teal management concept does not imply a lack of order and accountability. Effective management based on this model is based on respect for employee opinions and their involvement in processes, while maintaining a structured approach to decision-making. Teal Companies: A Unique Approach for 2% of Employees Teal organizations offer a unique environment for self-realization, where employees can develop their talents and find deep meaning in their work. These companies lack rigid job descriptions, allowing employees to pursue projects that truly interest them and make independent decisions. The core values ​​of such organizations are financial transparency and freedom of action. However, as Yuri Fedin, Managing Partner of Metacorp Holding, notes, this ideal model is suitable for only 2% of employees. This underscores the importance of understanding the individual needs of employees and aligning the corporate culture with their expectations. Teal organizations can be an effective tool for increasing motivation and engagement, but they're not for everyone. Many aspiring Teal companies face a number of challenges, despite the appeal of this approach. These organizations have a strict corporate culture where trust is central. As Fedin notes, in Teal companies, there's no such thing as "earning trust," only "losing trust." This means employees must trust each other from the start, which requires significant shifts in their thinking and approaches to interaction. For such companies to function effectively, it's important to create an atmosphere of mutual understanding and openness, which in turn fosters strong teams and increases overall productivity. One of the key characteristics is accepting responsibility for your decisions. Blaming circumstances or other colleagues is not an option. Openly expressing emotions and providing honest feedback often encounter resistance due to psychological barriers and the desire to please others. Discussing financial matters can be a shock to employees, as many are afraid of openly discussing money. Therefore, it is important to create an atmosphere of trust where employees can freely share their thoughts and experiences, which ultimately promotes more effective interactions and informed decision-making. Fedin emphasizes the paradox that freedom always comes with responsibility, yet many people find it difficult to accept this responsibility. Many prefer to have a boss who makes decisions and coordinates actions rather than act independently. This phenomenon highlights the difficulty of choosing between freedom and the need to follow directions, a pressing issue in modern society. Fedin argues that only 2% of employees are able to adapt to the culture of Teal companies, as it requires deep reflection, the ability to make independent decisions, and honest interactions with colleagues. He notes that after implementing these changes, many successful and promising professionals left the company because they could not accept this culture. This underscores the importance of alignment between employee values ​​and corporate culture for successful integration into such organizations.

What are the challenges of implementing Teal practices?

One of the key challenges for companies seeking to implement the Teal management model is finding and selecting qualified employees. Despite the attractiveness of the Teal organization concept, success directly depends on the people who will implement it. Finding candidates who share corporate values, are ready for self-control, and demonstrate responsibility can be difficult. Often, the process of finding such specialists takes a significant amount of time and resources. Companies must develop effective recruiting strategies to ensure that their team aligns with the principles of a Teal organization.

After hiring, it is important to take the time to adapt the new employee to the corporate culture. This includes familiarization with the company's values ​​and assessing their integration into the team. Successful onboarding is crucial before an employee can begin performing work tasks. This stage can extend the period from hiring to the point where the employee begins to contribute to the company. Effective onboarding contributes to increased productivity and reduced turnover, which ultimately positively impacts the business's financial performance. Adapting to a Teal environment can be challenging. Lolita Maximova, website administrator for the Teal company CCT, shares her experience of initially experiencing difficulties at work. In her previous jobs, Lolita didn't have to seek solutions independently. "In other companies, I was simply given tasks to complete," Lolita says. "Here, I realized that I need to show initiative."

Working in Teal organizations requires employees to be more responsible and independent. In such companies, initiative and decision-making are valued, which can be both a challenge and an opportunity for personal growth.

From my first days on the job, I began writing down all my tasks in a notebook so as not to miss anything. The transition from following established tasks to finding my own solutions was difficult, but over time, I came to appreciate all the benefits of the new role. One positive aspect was the lack of rudeness from colleagues.

Lolita emphasizes that she often encountered rudeness in other companies, whereas her current organization has an atmosphere of equality. Respectful communication within the team is a key aspect of successful collaboration and contributes to a healthy work environment. This approach allows employees to feel comfortable and confident, which, in turn, increases overall productivity and job satisfaction.

For top managers and business owners, the absence of strict control may be perceived as ideal. However, in practice, this management model does not always lead to the achievement of goals, which raises doubts about its effectiveness. It is important to consider that flexible management methods can help increase employee motivation and improve teamwork. However, to successfully implement this model, it is necessary to clearly define goals and expectations, as well as provide regular feedback. This will help create an environment in which employees will strive for results, even without strict control.

Reasons for the Low Popularity of Teal Companies in Russia

One of the main reasons why Teal companies have not become widespread in Russia is the lack of information about this organizational model. Many business owners are unfamiliar with the principles and benefits of Teal management. This leads to misunderstandings and bias towards the new paradigm, which can improve work efficiency and the atmosphere in teams. To successfully implement Teal practices, it is important to conduct educational events and share successful examples so that businessmen can see the real benefits of this management model.

Anastasia Uskova notes that many entrepreneurs do not have a clear understanding of the new management model, which hinders the implementation of effective practices in their businesses. This lack of knowledge about modern management approaches can negatively impact company development and competitiveness. It's important to recognize that implementing new management methods can optimize processes and improve overall business performance. Entrepreneurs should pay attention to current trends and strategies to successfully adapt to changing market conditions. Many businesspeople, even those familiar with the concept of Teal Organizations, have doubts. They fear that the lack of strict control and clear plans may hinder their ability to achieve new heights in business. It's important to understand that Teal Organizations are based on the principles of trust, self-management, and flexibility, which can lead to increased efficiency and innovation. However, successful implementation of this model requires certain conditions and a willingness to embrace change in corporate culture. The labor market is experiencing a shortage of companies with a strong HR brand. Only a few organizations can offer values ​​that will attract potential candidates. Employees must act not simply as performers but also as advocates for their brand, which necessitates the development of a unique corporate culture. This will not only attract talented professionals but also retain them, creating a loyal and productive work environment. Developing and maintaining a strong HR brand is becoming a key factor for successful business development in a competitive market.

The main problem is that more than half of the jobs in the country are occupied by line staff, while another 20% are public sector employees and civil servants. The question is how to implement the principles of the Teal Model in the work of such employees as supermarket cashiers or fast-food cooks. Is it possible to give them freedom to make decisions regarding customer interactions and cash register operations? It is necessary to consider how these principles can be adapted to increase the engagement and responsibility of employees in these positions, which, in turn, can lead to improved service quality and increased customer satisfaction.

The Teal Management Model has not yet become widespread in the Russian market. This is due both to insufficient awareness of its principles and ingrained stereotypes in approaches to work organization. Successful implementation of this model requires raising awareness among managers and employees, as well as overcoming traditional notions about hierarchies and management.

Challenges of Applying Teal Models in Russia

Recent studies show that 70% of organizations that implement modern management models face difficulties in their implementation. A striking example of this is the Neti company, which in 2017 decided to move to a horizontal management structure after the departure of one of its leaders. This case illustrates the difficulties that companies face in adapting to new management approaches, emphasizing the need for careful preparation and planning when transitioning to innovative management models.

The management of Neti, inspired by the successful practices of such organizations as Zappos and Askona, decided to eliminate the management hierarchy in order to improve work efficiency. However, after three years of implementing this strategy, it became clear that the expected results were not achieved, and the company began to experience financial difficulties. This experience highlights the importance of carefully analyzing management practices and their impact on business results.

The analysis showed that only 10-20% of the company's employees support the principles of Teal management. These mature, results-oriented professionals strive to optimize processes. However, their numbers are insufficient to create an effective team capable of achieving high results.

For a Teal company to operate effectively, it is critical that the majority of employees have the necessary skills and are prepared to work independently. However, Neti's experience has shown that building such a team is a real challenge.

The principles of Holacracy involve distributing authority among all employees, which reduces the importance of traditional leaders and team stars. Oleg Khalilov, co-founder of Neti, emphasizes that the absence of such inspiring examples and drive can lead to a decrease in employee motivation and interest in their work. It is important to remember that maintaining high productivity and employee engagement requires leadership models that stimulate initiative and creativity. Sharing responsibility must be combined with support and inspiration to create a positive atmosphere for work and growth.

Employees demonstrated initiative, but many were faced with tasks for which they lacked the necessary experience. This led to inefficient spending and increased employee dissatisfaction, which in turn contributed to employee turnover. A lack of skills creates problems not only for employees but also for the company as a whole, reducing productivity and increasing turnover. To avoid such situations, it is important to provide adequate training and support to employees, which will improve their competencies and job satisfaction.

The experiment at Neti had its positive aspects, including increased employee accountability. However, the lack of a clear hierarchy and the lack of experience on the team were the main factors that led to the experiment's termination. These challenges highlight the importance of having a structured organization and sufficient skills to successfully complete tasks.

The Neti situation highlights the importance of preliminary preparation and training of employees before implementing new management models. Successful changes depend not only on the desire but also on the team's readiness to embrace new challenges. Management must consider the specifics of their organization and actively develop a corporate culture conducive to the implementation of innovative solutions. Effective preparation and training of employees will help minimize resistance to change and increase the likelihood of successful implementation of new management approaches.

Turquoise Companies: Are Success and Profitability Possible?

The turquoise management model continues to generate debate, but many companies are successfully implementing this approach. A striking example is VkusVill, which in 2023 presented financial statements according to international standards (IFRS) for the first time before its IPO. This initiative emphasizes not only business transparency but also the company's desire to increase investor confidence. The use of the Turquoise management model fosters flexibility and innovation, which in turn allows companies to adapt to changing market conditions and compete effectively.

According to the report, in 2020, revenue at the VkusVilla chain of stores increased by 38.2%, reaching 114.3 billion rubles. At the same time, the company's net profit decreased by 65.2%, reaching 951.7 million rubles. The main reason for the profit decline was increased costs: commercial and administrative expenses increased by 43.9%, while other expenses increased by 17.1%. This situation highlights the importance of cost optimization to maintain business profitability in an increasingly competitive market.

Askona Trading House managed to improve its financial performance during the 2020 pandemic. However, according to available data, the company's expenses have increased significantly, which has had a negative impact on overall profit.

The financial stability of Tochka Bank demonstrates that the principles of the Teal management model can work effectively in the commercial sphere. This confirms the success of the application of innovative approaches in banking activities and their positive impact on financial results.

Should an employee strive to work in a Teal company?

If your work is related to creativity, a Teal environment can be the ideal place to realize your potential. It is important to keep in mind that working in this format requires a high level of self-organization and responsibility. If you are not ready to make independent decisions and do not attach the same importance to personal achievements as corporate ones, this approach may not be for you. A Teal organization assumes the active participation of each employee in the process, which can be both a challenge and an opportunity for growth.

Companies that are completely Teal are rare. Employers are increasingly integrating elements of the Teal model into traditional organizational structures. For example, remote work options can be combined with requirements for timely report submission. Such companies foster the development of both the business and employees, reducing the risk of burnout through a balanced approach. Implementing Teal principles helps create a more flexible and productive work environment where not only results but also employee well-being are valued.

Igor Drozhaev, a department head at TsKT in St. Petersburg, shares his experience. When he joined the company, he initially perceived it as a temporary position. However, the lack of pressure from management became a key factor for him. In 10 years of work, Igor has never experienced pressure in sales, allowing him to focus on the quality of his work. This approach not only promotes the professional development of employees but also improves the overall performance of the company.

I have complete freedom for self-realization within the company, which allows me to make changes to the product range. Support from colleagues and management plays a key role in creating a comfortable work environment. This promotes both personal and professional growth, which in turn has a positive impact on the overall development of the company.

How to implement the Teal approach in a company?

In Russia, some organizations are beginning to implement the principles of Teal management, applying them in individual departments. Alexander Vysotsky, founder of Visotsky Consulting, shares the experience of his company, where elements of the Teal model are successfully implemented in the technology department, consisting of 15 employees. This approach contributes to increased efficiency, improved team dynamics, and the creation of a more flexible organizational structure, which in turn leads to better results and employee satisfaction.

In our department, there is no rigid hierarchy, and we encourage informal communication between colleagues. However, according to Vysotsky, such an approach is inappropriate in the sales department, since strict discipline is required there. He emphasizes that a combination of different work styles can lead to high results if applied correctly depending on the specifics of the activity.