Spiral Dynamics

Spiral Dynamics is a method of classifying people, organisations, and even societies, which has grown in popularity in recent years in the US. Although relatively unheard of in Europe, the technique has started to enter the mainstream in the US. The “early adopters” have taken the technique to their hearts, and it is a matter of time before this system of analysis reaches over the Atlantic into Europe. It was our intention to develop the technique as a means of analysing service demand against service offerings between an organisation and it’s constituency, and to show how it might be of use in classifying customer relationships.

The main thesis of Spiral Dynamics is that, in our dealings with others, we merely reflect the life conditions that we are currently experiencing. These life conditions are bundled into memes – an aggregation of cultural influences, attitudes, and ways of doing things, and so on. Memes are to memetics what genes are to genetics. Whereas genetics allows us look at two very different faces, but see a number of ethnic and familial similarities; memetics allows us to look at two very different organisations and see the shared life conditions facing those organisations.

The memes are analysed in terms of eight stages of development that have been referenced by the use of colours for convenience. For example, the most basic stage is Beige – the level of survival. In the Beige set of life conditions, the focus is on survival. A Beige organisation exists by hand to mouth, in a very short time frame. The eight stages of development, and their key characteristics, are:

1. Beige – a basic level of existence, where survival of the individual is very dominant. There can be no consideration other than for the immediate survival of the individual. In the context of small business, we are unlikely to encounter too many Beige small businesses, as their strategic vulnerability means that they are constantly on the verge of going out of business.

2. Purple – still a basic level of existence, but no longer solitary. The clan, the tribe, and the extended family dominate this level. In the context of small business, the Purple Business would be one that has reached critical mass in commercial terms - it is a viable business - but it is one that is still vulnerable to the whims of others (e.g. an over-dominant customer).

3. Red – this might represent a number of purple groups joined together in a simple power empire. This is the level of kings (the “Big Bosses”) and robber barons (the “Working Bosses”) who direct the peasants (the “Working Masses”). In the context of the small business, this would represent the SME that has achieved stability in their existence. The owners would be able to exert a greater degree of control over their lifestyles, as they are far less vulnerable to the whims of dominant customers, the loss of key workers, and so on.

4. Blue – the power empire has given way to the rule of law and behind the law lays an outline of ideology. This is a small authority structure with rigid rules for structure and rank. Tradition is important to the organisation and there is little cross movement within the organisational structure. In the context of the small business, the owner is likely to have become less pragmatic in the conduct of business, and more prescriptive in the way in which the business is run (e.g. “This is how we do things here!”).

5. Orange – at the heart of the Orange level is the success driven strategic enterprise. It is a bureaucratic and status orientated authority structure in which the individual can operate almost unchecked – the home of the Yuppie. Success is often a key driver, and is measured in materialistic and status terms. In the context of small business, this is the home of the success driven business owner who is on a mission to fulfil their personal goals.

6. Green – beyond the pursuit of self lays the social network that operates on a co-operative basis. It is organised by project rather than by process. Green organisations are the natural home of the networkers as there is an emphasis on consensus and sensitivity to the feelings and needs of others. At this stage of development, the small business owner is starting to become more concerned with personal fulfilment than material accumulation.

7. Yellow – growing out of projects and networks are business systems. The Yellow business is arranged on a systemic basis, where systems and processes deliver customer value. The business is project centred, with changing functional leadership. This is the natural home for the “Knowledge Worker”. In the context of the small business, we would expect to find in this category those SMEs whose owners have a focus on personal achievement by connecting with other high achievers.

8. Turquoise – the organisation now adopts a holistic approach to delivering customer value. The future is regarded as a matter of concern in business decisions, as are social costs instead of economic costs. There is an emphasis on collective individualism as an approach to solving problems. In the context of the small business, the Turquoise SME is one in which the owner sees themselves as part of a connected world, and who wants to achieve results in an integrated way.

There is said to be a ninth level – that of Coral – but we don’t really know too much about that at the moment.

This analysis can produce some interesting results when we apply it to the business context. The theory is all about relationships, which is, effectively, what business is about. Every business has three key relationships to concern itself with. It has a relationship with its customers, its suppliers, and the public authorities who provide a “licence to practice” (the regulatory and fiscal framework in which the business operates).

For example, knowing where your customer lies in relation to these eight levels can be quite important in building up a rapport with them. If your customer is from a very Beige business, you can usually expect them to be very price sensitive (if they buy from you at all – they may prefer to self-supply or just do without), very demanding in terms of follow up, and seek to squeeze the last drop of value from the exchange. Whether or not this is good business depends upon your product offering. If you provide goods and services at the commodity end of the market spectrum, then Beige, Purple, and Red customers are your key market segment. It is likely that you will have a product offering that would satisfy the Beige customer.

Alternatively, if your customer is from a very Green organisation, then, although price may be a factor, it is likely that you would want to highlight the features and benefits of the product rather than the price. You would seek to compete on quality, reliability; the extent to which the product could be used at all levels within the organisation, and so on. If you are at the niche end of the market, then Green, Yellow, and Turquoise customers are your key market segment. You will be able to wow the Yellow, but the Beige wouldn’t think much of you – you will be far too expensive.

If this is so, then how can we recognise the life conditions of our customers? It is believed that we reflect to others our own life conditions. For example, in a growing number of organisations there is a policy of continually reviewing client relationships. If the relationships are not working, then they are simply terminated. This is very Green/ Yellow – relationships are central, they need to be fully functioning, clients are part of our team as much as we are part of theirs, we need to share processes co-operatively, and so on. Beige/ Purple people cannot believe that these organisations are happy to turn business away. And that it is seen it as good practice as well!

The Green/ Yellow organisations are reflecting their life conditions (work has to be fulfilling and we have to derive satisfaction from it), and their Beige/ Purple colleagues are reflecting their own life conditions (they are saying that they wouldn’t turn business away). Neither side is right and neither side is wrong. All that is being said is that there are different views of the world, and that things are done differently because of it. This is why this is an important technique, and why we ought to be aware of it.

The reflection of our own life conditions is an important key to understanding where Suffolk is on the spiral. When you ask small business owners why they are in business, the answer that you are given reflects where they might be on the Spiral. For example, if we are told that the business owner operates in order to earn a living and that the living is hard earned, then we have a clue that the business may be operating in the Beige/ Purple part of the Spiral. Alternatively, if we are told that the business owner operates in order to fulfil their own lifestyle ambitions, then we have a clue that the business may be operating in the Green area of the Spiral. One of the more interesting aspects of this analysis is that we can examine the shared memes of a number of very different organisations.

This being the case, we decided to examine where the Suffolk small business community is on the Spiral. For us, this would be an interesting experiment in producing quantitative analysis from a reasonably esoteric theory. If the analysis did provide a set of interesting results, then we would be able to widen the application of the technique to other organisations in different contexts.

The Greenways Partnership

“Success is a journey, not a destination.”

Small Business Survey 2004

A short introduction to Spiral Dynamics

For all enquiries, please contact us by E-mail at enquiries@greenways-partnership.com.

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