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Language and Globalization: The Mandate to Speak English at Rakuten


Language and Globalization: The Mandate to Speak English at Rakuten

Japan’s largest online retailer, Rakuten, is rapidly expanding into global markets. In order to ensure the success of the organization, but also to break down linguistic and cultural boundaries in Japanese society, CEO Hiroshi Mikitani mandates English proficiency within two years for all employees. Professor Tsedal Neeley discusses the thinking behind Mikitani’s mandate and why there’s such a strong connection between language and globalization.

Brian Kenny: Fifty-nine miles southwest of Baghdad along the Euphrates River marks the spot of the ancient Mesopotamian city of Babylon. Thought to have been the largest city in the world in the 18th century, it was a center of commerce and culture. As the Bible tells it, the city was founded by Noah’s descendants who, in the years following the great flood, united as one community, even speaking the same language. Together they achieved great things and their ambition knew no bounds, so they decided to build a tower tall enough to reach the heavens as a self-tribute, but, no surprise, God had a different idea. With one mighty blow, he struck the tower down, scattered the Babylonians to the corners of the earth, and caused their tongues to speak different languages.

The lessons of the Bible notwithstanding, it’s intriguing to think about how different the world would be if we all spoke the same language. Today we’ll hear from Associate Professor Tsedal Neeley about her case study Language and Globalization: Englishnization at Rakuten. I’m your host, Brian Kenny, and you’re listening to Cold Call.

Professor Neeley teaches MBA students and executives at Harvard Business School. Her research focuses on the challenges that global collaborators face when attempting to coordinate work across national and linguistic boundaries. She’s also the author of a new book, The Language of Global Success: How a Common Tongue Transforms Multinational Organizations. That’s really at the heart of what we’re going to talk about today. Tsedal, thank you for joining me.

Tsedal Neeley: Thank you for having me.

Kenny: It’s great to have you back on the podcast. I want to get into both the ideas that are in the book as well as in the case since they overlap a lot, but I’ll ask you just to begin by doing what I always ask faculty to do, which is tell us who the protagonist is and what’s on their mind.

Neeley: Fabulous. The protagonist in this case is the CEO, celebrity CEO, Hiroshi Mikitani, of Japan’s largest online retailer. He mandates one single language for his entire organization in order to globalize rapidly, and then panics a bit. Did he do the right thing? He told them that they had two years to clear a language proficiency test or face demotion. Was that the right thing? Is he going to have to demote everyone? This was a huge, huge publicly visible strategy that he enacted. What does he do now?

Kenny: How did you learn about what he was up to?

Neeley: It’s interesting because my work, starting from my doctoral training at Stanford 15 years ago, was looking at language and globalization, so it wasn’t long before we found each other. Soon after he did this, he wanted to get a little bit of insight from me and I wanted a case study. It was a match made in heaven.

Kenny: Englishnization is hard to say. Is that a real word?


Neeley: That is a real word that he coined and has trademarked. In a sense, it’s a tough word. I hear that all the time, just like you experienced it, but the word in a sense shows that there’s a transition to English and how an organization can go through that transition. Ultimately, it’s a global strategy.

Kenny: One of the first things I thought of when I saw the case was, “Why English? Why not Chinese?” We keep hearing we should all learn to speak Chinese or we should all learn to speak Spanish, but why did he decide that English was the way to go?

Neeley: He decided that English was the way to go because he is in step with worldwide trends. English is the unequivocal business language of the world. In fact, approximately 60 percent of global companies have an official common language, which is English. This has been the case now for some 30-plus years. We’ve had many, many common languages, or as we say, lingua francas, in Latin, over the centuries, but English is the one today. It is the fastest spreading language in human history.

Kenny: I find that really surprising.

Neeley: You know, it’s surprising in a way, and if you think about it, not very surprising. You would think that the business languages of the world are dictated by population, size of populations, or where the emerging markets are, but the reality is the lingua francas of the world are designated based on the superpower status of the people that that language follows, the British, the Americans, for example, and the structure of the language itself.

Kenny: Having been in many countries around the world, I can almost always find somebody who speaks English. I can find somebody to help me out. I was struck in Japan [where this case is set], I had trouble finding anybody who spoke much English. How prevalent is English in Japan?

Neeley: Actually, your observation is spot on. Interestingly enough, when Mikitani mandates English for his entire organization, he’s also looking to push the boundaries, the national boundaries, of the Japanese society around English and globalization. Although English is part of the educational system, so each Japanese student is exposed to English when they’re quite young, they never use it, it’s not used in business, it’s not used in cross-border work, but that’s changing rapidly. He’s been one of the trailblazers in this change, so much so that Prime Minister [Shinzo] Abe has tapped him to help reform the English language education in Japan. They’ve been doing a lot there.

Kenny: Tell us a little bit about both Mikitani and Rakuten. What’s the business all about and what’s he like as a business leader?

Neeley: Rakuten, the company itself, is comparable to an Amazon, Ebay, Expedia, all of those put together. Rakuten has an ecosystem of all of these online businesses and services. People opt in to membership into Rakuten, so you become a Rakuten subscriber and you make all of your purchases through them. You can buy eggs, wine, plane tickets, and some online banking, all through this membership. They actually have close to 90 percent market dominance in Japan when it comes to online business.

In terms of Mikitani, he’s a fascinating leader. It’s been a privilege getting to know him. He is dubbed as the Bill Gates and Jeff Bezos of Japan for his prescience and understanding what technology can do for commerce. He is fearless in his decision making. Sometimes he would be the only person having a particular vision and pursuing it, his co-founders, his executive team, looking and turning the other way. He feels and has this gut instinct about the future. He’s extremely bright. The capacity to process a ton of information across many domains. He’s the son of a famous economist. Sometimes you can see him and hear him almost like a teacher/professor/leader when he’s thinking and talking. He’s very charismatic, too.

Kenny: He would have to be, I would think, to lead this kind of an enterprise. The ambition that he has for Rakuten is described in the case. He’s really all about globalization at this point.

Neeley: Yes. He really is. This is something that he’s talked about and thought about. I was able to trace it back to him in his thirties. He’s been thinking about it and talking about it for years and years and years and really went all out. This case is really about that.

Kenny: Yes. He may have 90 percent market share in Japan, but Japan’s a relatively small market compared to China and other places where they want to take this business. His employees are engaging daily both with clients and with partners who are around the globe. Can you talk a little bit about the landscape of Rakuten?

Neeley: Since this case has been written, they’ve expanded dramatically. They were in about six, seven countries when the case was written, and now they’re really covering the globe, partly through their acquisitions, their partnerships, their joint ventures. In fact, they today are the key sponsors for FC Barcelona soccer team, so … you’re going to see Rakuten with [Lionel] Messi, running around in the Rakuten jersey. They just inked the deal that was announced recently with the Golden State Warriors, our NBA championship team, where Rakuten is now etched on their jerseys. This is how global they’ve become.

Kenny: That might be a first, I think, for an American sports franchise to have an international brand on their jersey or represented, so that’s a huge deal.

Neeley: That’s exactly right. In fact, they were the ones that the Golden State Warriors selected precisely because of the fact that they’re a global company and a global brand. They opted away from other possible sponsors because they weren’t global enough. The NBA has this global vision, so now they’re seeking to partner with a global company like Rakuten in order to actualize that global vision. Rakuten couldn’t have done that five, six years ago.


Kenny: That’s an amazing co-branding play there … both the brands benefit from that. If I’m an employee of Rakuten, I might be based in the US. My English is good. I speak English. That’s not the case, obviously, for other employees. How was this English-only mandate introduced?

Neeley: What happened was on March 1, 2010, Hiroshi Mikitani stepped up on a podium and addressed 7,000 of his Japanese employees, with some 3,000 overseas employees listening in, and said, “From this day forward, we are going to migrate to the English language from Japanese.” Employees had two years to clear a language proficiency test or face demotion. There is no turning back. They needed to take up one of their key principles, speed, speed, speed. Englishnization started that very day.

The Japanese employees for a period of two years worked harder than they’d ever worked in their lives. They were filled with anxiety and they struggled, and struggled, and struggled, but that changed. Within two years, they were speaking with their counterparts in English around the world, they were spreading their Japanese corporate cultural practices easily, and English became the conduit by which they expressed and spread their corporate culture. They believe this is one of their competitive advantages.

The American employee was very excited in the beginning.Very excited. Within two years, the Americans suddenly experienced culture shock because the Japanese could now impose their corporate cultural practices rooted in their national identity on the Americans in new ways.

Kenny: It’s the “careful what you wish for” after-effect of this policy.

Neeley: Precisely.

Kenny: In the case, and also in the book, you describe the different profiles of people when this kind of mandate is issued. Can you describe that a little bit?

Neeley: First you have the Japanese employees who work and lived in Japan but yet had to take up a new language. I call them linguistic expats because they become expats while living in their own countries when it came to language use. The Americans I call the cultural expats based on what I just described, the fact that they would walk into their offices in New York and in California and be immersed in Japanese culture in new and unexpected ways.

There’s a third group. This group comes from places like France, Brazil, Germany and Taiwan. They’re neither Japanese nationals nor English native speakers. I honestly thought this would be the double jeopardy group when I first learned about this. It turns out once they climbed the steep English language and Japanese cultural curve, they adapted quickly. I call them the dual expats because they’re neither Japanese or English native speakers. They have proven to me to be the group that is the most adaptive and has been able to live out the decoupling of language and culture, and the mixing and matching of language and culture, in very productive ways.

Kenny: As a manager, if you’re advising a manager on what kind of employees to hire, that sounds like a pretty good criteria.

Neeley: It’s a fantastic group. That they’re able to detach from their language or their culture and able to operate like true expats in their own countries, that’s what I’ve been talking about since writing this book, this notion of how can we operate like expats in our own countries and have, what I call, global work orientation in order to better serve our organizations and our customers no matter where they live, no matter what they speak, no matter who they are.

Kenny: If we look at the profile of students who come to a place like Harvard Business School, many of them have been able to travel. They’ve been able to experience other cultures. They’ve become more comfortable in their shoes no matter where they are in the world. As other businesses are thinking about globalizing, does this indicate that there’s a model here that managers can think about following?

Neeley: I think there’s an absolute model that managers can follow. Part of it is, you don’t have to have been a dual expat in order to gain some of the insights that we saw through the Rakuten case. It’s the attitudes. It’s the behaviors. It’s the norms that they possess that we can package and teach others. That’s all actually outlined and highlighted in the book.

Kenny: You teach the case both in Executive Education programs and MBA courses. Do you get a different reaction from let’s say the more senior people who have been in their career for some time versus those just beginning their careers?


Neeley: It’s interesting because the MBAs really look at this case as employees, as the recipients of this language strategy and language mandate. What does it feel like? What could it be like? What does this mean for employees? Executives are blown away by this case because it shows them that you can be bold, that you can be radical, that you need to truly set some clear strategies in order to globalize your organization. This case ends up being a model for it because we’re able to actually show them a five-to-seven-year trajectory of the company, what’s happened, how they did this, how they changed, and it becomes a place where people learn. It’s interesting. Oftentimes, people are in awe of Hiroshi Mikitani as they learn about the case. He becomes an inspiration to many, many people.

Kenny: Yeah. He may have started a movement that has no end in sight.

Neeley: I think so. I think so.

Kenny: Tsedal, thank you so much for joining us today.

Neeley: It’s always such a pleasure, Brian. Thank you.

Kenny: You can find the case in the HBR case collection at HBR.org. I’m Brian Kenny and you’ve been listening to Cold Call, the official podcast of Harvard Business School.

source: Harvard University – Harvard Business School

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