When a Japanese Company Adopted English as a First Language

strategy+business, January 23, 2018

by Theodore Kinni

On March 1, 2010, Hiroshi Mikitani, the founder and CEO of Rakuten, a Japan-based e-retailer, announced that henceforth English would be the official language of the company’s 10,000 employees. Moreover, declared Mikitani, who often was billed as Japan’s Jeff Bezos, any employee who didn’t become fluent in English within two years would face demotion.

The initiative, dubbed “Englishnization” by Mikitani, shocked Rakuten’s 7,000 or so Japanese employees — 95 percent of whom did not speak their employer’s newly established lingua franca. It also made headlines around the world, and drew some domestic fire: “It’s stupid for a Japanese company to only use English in Japan when the workforce is mainly Japanese,” said Honda Motors CEO Takanobu Ito. (Five years later, Ito would be out and English would be in at Honda, too.)

Rakuten’s Englishnization didn’t shock Tsedal Neeley, author of The Language of Global Success: How a Common Tongue Transforms Multinational Organizations. “By mandating English,” writes the associate professor at Harvard Business School, “Rakuten was prepared to join the approximately 52 percent of multinational companies that had adopted a language different from that of their originating country in order to better meet global expansion and business needs.”

In The Language of Global Success, Neeley reports the results of her five-year longitudinal study of the initiative, which began a couple of months after Mikitani’s announcement. She also ticks off the reasons companies need a lingua franca. Communication and knowledge exchange top the list. Rakuten was operating in a fast-moving and highly competitive sector. And by 2010, the 13-year-old company was pursuing a strategy of global expansion. It was clear to Mikitani that the language barriers within Rakuten were bogging down everything — integration of acquisitions, management of business units in 27 countries, the minutiae of daily work. For instance, an email from an English-speaking employee in the U.S. to a Japanese colleague required translation, as did the reply and any additional messages — and the translations themselves often required interpretation. As you might guess, even simple exchanges could drag on for days. Read the rest here.