Case of Rakuten: When a Japanese company started learning English in order to become global…

Fascinating to read this interview of Prof Tesdal Neeley. She has written a book: The Language of Global Success. It talks about how Rakuten which was a Japanese company gradually moved to English in order to become a global company.

This is how Rakuten moved to English:

Imagine reporting to work next Monday and being told to attend an all-staff meeting in the cafeteria for an address by the CEO. Once the meeting begins, the news is disturbing, at best. “Beginning almost immediately,” the chief executive says, “we will no longer conduct business in English, but rather in Japanese. By the end of the month, I personally will be talking almost exclusively in the new language. We will train you, but if you aren’t proficient in two years, you will likely be out of a job. Welcome to our transition to a global company!”

This actually happened, but it was a Japanese company where employees were told they would be learning English. Increasingly, multinationals are adopting a lingua franca in which to conduct their business, the better to globalize operations, be better understood by their customers, and to better communicate with colleagues spread around the globe.

But, as Harvard Business School Associate Professor Tsedal Neeley has documented over the years, learning a new language is just the start of challenges that can confront workers in this situation. For example, they must also come to terms with cultural changes, and must learn how to prove themselves all over again in their new language. They become “expats” even while living and working in their own country.

In her new book The Language of Global Business, Neeley follows the five-year effort of Japanese high-tech giant Rakuten to make the transition to English. In the end, the companywide initiative proves very good for business, but its achievements and stumbles both offer guidance to companies attempting the same goal.


The author’s interview:

Sean Silverthorne: Who will benefit most by reading The Language of Global Success?

Tsedal Neeley: The Language of Global Success covers the entire spectrum of a global organization’s transition from a mostly domestic company to a truly integrated global company. When I wrote this book, I had top leaders, managers, and employees of global organizations in mind. Leaders have to devise their globalization strategy and make a decision about how their cross-borders employees, suppliers, and partners will communicate. Managers, for their part, need to understand the hurdles employees will face in the globalization process, from learning a new culture to learning a new language and operating through a common corporate culture effectively. Those employees need to understand the trajectory of the development that they need to go through, and will gain clear insights on what that adaptation process is like through reading this book.

Silverthorne: Why was Rakuten such an ideal company to be the subject of the book?

Neeley: I started to study the Rakuten organization early in its language and globalization journey. This is a true privilege and rare opportunity to capture, in detail, five years of the company’s aggressive global expansion, using a language strategy as a vehicle to standardize and integrate the firm. For that reason, Rakuten was an ideal and unique opportunity to study what it takes to transform a global force. This was possible because CEO Hiroshi Mikitani, a celebrity figure, a maverick of culture change, and truly a global leader, gave me unprecedented access to the company throughout this transformation process. The book covers the nitty gritty, uncensored joys and struggles of employees and global expansion performance of the firm over time.

Silverthorne: Can you explain what the “expat perspective” is, and why it’s important toward understanding what employees face in learning a new lingua franca for business?

Neeley: The expat perspective that I advance in this book is the idea that globalization renders global employees into expats while living and working in their own country. This is an important point because when you’re dealing with globalization, people have to detach from their native languages and cultures in order to move into this third space, so to speak. The expat perspective is the experience that says, “You cannot hold on to your identity. You need to migrate to a global identity, whether you’re an expat in your own country linguistically, culturally, or both.” Detachment and adaptation is why the expat perspective is crucial for global organizations. In a sense, what this book shows us is that for a company to be truly global, it has to become an expat corporation with employees who are able to walk into their native country sites and operate as if they’re expats in their own country.

Hmm… Never thought about it from this angle..


Silverthorne: Did adopting English as its business language help Rakuten in the end? What were their wins and losses?

Neeley: I have personally witnessed the change in the make-up of Rakuten’s human capital over the last five years. I walked through the department workspaces and the cafeteria pre and post this language strategy and the contrast was visually striking. A very diverse workforce today has replaced a largely homogenous one. Everyone is speaking English to one another. For example, 80 percent of new engineers to be hired into their Japanese offices last year were non-Japanese engineers. That’s a significant change.

Their global investments and acquisitions have been significant. For example, Rakuten is the largest shareholder of Lyft and has invested significantly in Pinterest. They have acquired Ebates, Viber, and many more companies. As of this year, they are the primary sponsor of [soccer team] FC Barcelona. Instead of seeing Qatar Air on the jerseys of Messi and other soccer superstars, we now see Rakuten. You go to any airport in the world, millions of people now see Rakuten. I am firmly convinced that their global activities and move to become a global innovation company would not have been possible without this full-on, full-in language change and cultural change approach that they launched in 2010. I have absolutely no doubt about that. Those are a lot of their wins. In fact, I devote an entire chapter on the wins.

As far as their losses, they had to overcome a sustained period of being an anxious organization with the threat of losing excellent engineers. Growing pains were real. Employees had to stretch daily. But, as I mentioned earlier, their current evolution on the global stage is formidable, and I think their globalization story will continue to evolve.

We hardly look at this language aspect of globalisation in companies…

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