The trends of Teal Organization in Japan

The Trend in Japan started in January 2018

The Japanese edition of Reinventing Organization was published in January 2018. Since then, Teal Organization has been a hot topic not only in the HR community, but in many of the business people.

The Japanese edition book has published more than 30,000 hard copies, kindle versions not included. This is quite a big number as a book of a business theme.

Compared to Holacracy, which the book written by Brian Robertson of HolacracyOne was published in 2016, Google Trend shows that Teal Organization has a spike right after the book was published, which is 5x bigger than Holacracy.
(Blue is Teal Organization, Red is Holacracy)

Practices in companies are starting to emerge

There are some unique practices in SMEs.

DIAMOND MEDIA, an IT start-up is one of the famous companies of teal, who has had their original way of managing the organization for more then 10 years; they elect the CEO annually, all members discuss their own compensation together, and so on.
They were introduced in the Japanese edition of Reinventing Organization, and they also have interviews in English.

OZvision, a company which appears in the original book, is also an IT-startup in Japan. They mentioned in a recent interview that they don’t have the systems that was introduced in the book any more, but they are still challenging to make the challenging culture in their organization.

Still, I have to say these are some of the very few actual practices in Japan. The majority of the companies, especially the large ones, are still managed in an Orange culture.

The report published by Deloitte shows that it is a global trend to think of the next type of organization, but in Japan, the most important issue seems to be diversity and inclusion.
However, the term “teal organization” has become so famous in Japan, including in large companies, and the trend seems to be accelerating.

Why is this trend happening?

From my personal point of view, it seems to have two reasons.

First, there seemed to be quite a strong frustration to the Orange type of management. Back in 1950s, companies in Japan used to have an original type of management, characterized by “Lifetime employment”, “Seniority-based salary”, and “Periodic hiring”. Details were introduced in “The Japanese Factory”, a book published by James G. Abegglen in 1958. This seems to be a Green type of management.

But from the 1990s, majority of the companies started to implement pay-for-performance systems, which meant a dynamic change from the traditional way of management. And unfortunately, it seems that this didn’t fit into Japanese companies very well.

Nowadays, many companies are still having the pay-for-performance systems, but struggling to find out better ways to balance both employee satisfaction and business results.
From the employees point of view, this has been causing a high level of frustration.

More over, Japan has already started to depopulate, which means the market size would be shrinking. This means that the orange type of motivation, getting higher results, won’t be a good way to accelerate the organization.

Secondly, Teal or Green type of organizations seems to be a better fit to the Japanese culture, compared to Orange.
Of course there are very many successful companies in Japan in the Orange style. Also, the start-up ecosystem in Japan has grown dramatically within these several years, and in the ecosystem companies are managed in a typical Orange style.

Still, the key concepts of Teal, especially Wholeness and Evolutionary Purpose seems to be a good fit to the Japanese culture. We could see many common points within Zen and Buddhism.

I am one of the hosts of a community for “JINEN Management”, which we named from a Buddhism word, since we wanted to deepen the Japanese style of teal. This community now has 500+ members, and more than 40–50 people come to the monthly meeting to join the dialogue.
We are planning to have dialogues based on the videos Frederic Laloux has uploaded at his new website, to seek for further insight how we could implement teal organizations in our culture.