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Can Holacracy Work in Asia?

Published 26 April 2018

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Think of certain cultural tendencies entrenched in Asia. Will these hinder the effectiveness of holacracy in the region?

Last week’s article shared what holacracy is and how it is a fundamental mental shift in organisational mindset. The article shared two companies headquarted out of the United States that implemented holacracy. But can it work in Asia? Can we make calculated guesses as to which countries are more culturally aligned with holacracy?

Hofstede’s Cultural Dimensions is a study on how culture affects values in the workplace. The culmination of the research is six cultural dimensions: power distance index (PDI); individualism versus collectivism (IDV); masculinity versus femininity (MAS); uncertainty avoidance index (UAI); long-term versus short-term orientation (LTO), were compared for the following six Asian markets (mainland China, India, Japan, South Korea, Indonesia, and Singapore) versus three Western countries (the US, UK, and Germany). These three markers PDI, IDV, and LTO were chosen because holacracy thrives best where there is low power distance, shared ownership of purpose and vision, and appreciation of the long-term benefits of holacracy even if it requires intensive record-keeping and codification in the present.

A recap of definitions

According to Hofstede’s research:

1. Power Distance Index (PDI) measures how easily people accept inequalities within the society or workplace. Countries with a high PDI accept hierarchy and do not readily question where people are placed within the hierarchy. Countries with a low PDI are where people want to understand why there are inequalities of power, and they challenge hierarchy.
2. Individualism versus Collectivism (IDV) looks at how loosely or tightly the social framework within a culture is knit. A loosely-knit one where individuals look after themselves is defined as ‘individualist’ whereas a tightly-knit network where individuals are expected to look after one another is ‘collectivist’.
3. Long-Term Orientation (LTO) measures how a society maintains links to the past while dealing with the present and preparing for the future. A society with a low LTO sticks to traditions and norms. A culture with a high LTO favours preparing for the future and pragmatism.

Is holacracy likely to work in Asia?

Societies with cultures that have lower power distance, lower individualism, and higher long-term orientation would fare best in adopting holacracy. The table below shows the scores of a sampling of key Asian markets against the relevant dimensions:

As seen, Asia, relative to the West, has higher power distance, lower individualism, and higher long-term orientation. The last two traits are helpful to successfully adopting holacracy.

However, Asia’s hierarchical tendencies will be the main stumbling block in this endeavor. Indeed, as HCLI’s research suggested, one inevitably runs into discourse on legitimate power in Asia where a person in a higher position has control over people in a lower position in an organisation. Legitimate power may be framed differently in different Asian countries. In China, interviewees talked about “respecting the order”. In India, a hierarchy-conscious society where older employees in particular, will address the person before the issue, and not the issue irrespective of the person, was emphasised. Across Southeast Asia, words such as “paternalistic”, “hierarchical”, “autocratic”, “feudalistic” and “authoritative” resounded when leaders, both native and foreign, were asked to describe the ways of leadership in Indonesia, Malaysia, the Philippines, Thailand and Vietnam. And in Japan, interviewees shared that “alcohol is the great social lubricant” that will break down hierarchical barriers more quickly!

The shadow of legitimate power on Asia’s business sector arises from political history. Think of emperors, kings and sultans whose word used to be law. As an executive said, “If you look at Asian history, you say the wrong things and you get beheaded by the king! So I guess the values – residues of it – are still felt today”. Furthermore, particularly in developing Asia where the government may not step in with social security, employers are the security net for low-income employees. These employees obey in debt of gratitude – they perceive that their livelihood hinges on it.

Given such a cultural context, advocates of holacracy in Asia will have to proceed with caution.

Leadership matters

It is essential to note that regardless of cultural tendencies, what matters most in adopting holacracy is leadership. In Beyond the Holacracy Hype, the authors explain the importance of leadership. They write, “You might assume that the three goals of self-management structures–designing roles that match individual capabilities with organisational goals, making decisions closer to the work, and responding to emerging market needs–would make leaders less relevant. Yet one of the greatest challenges of implementing the goals at scale is insufficient leadership. When leadership is a shared responsibility, everyone must understand and practice it.”

Should Asia’s business leaders wish to implement holacracy, they need to distribute their power to others. They should then harness Asia’s inherent tendencies towards collectivism to drive through the initiative. The question is, are they willing to hand over and entrust?