A Common Language
Rakuten has some radical ideas that allow it to attract and employ the best workers from all over the world.
Go Global or Go Home
Rakuten–dubbed the Amazon.com of Japan–had a problem.
Rakuten’s footprint was limited given Japan’s declining population and lackluster economy.
Faced with limited growth prospects at home in Japan’s shrinking market, the company’s challenge was to translate Rakuten’s domestic success into overseas sales. His goal was to make Rakuten a top internet global services company. And that meant that expansion had to come from outside Japan.
Mikitani didn’t want just a successful Japanese firm. He wanted a globally recognized company.
A Successful, but Local Start
Rakuten was created by Hiroshi Mikitani in 1997 as a small online marketplace featuring 13 shops and run by six employees.
Since then, it has grown into an e-commerce giant with over 12,000 employees and sales of US$5 billion. Its domestic market share for e-commerce is more than 26%, ahead of Amazon in Japan.
A Global Language Strategy
To recruit globally and to sell worldwide, Miktani decided Rakutun needed a global language policy.
In 2010, he mandated that English would be the company’s official language – a change that affected all his Japanese employees. Overnight, the Japanese language cafeteria menus were replaced, as were elevator directories and all other “official” company communications.
He stated the employees would have to demonstrate competence in an English scoring system within two years – or risk demotion or even dismissal.
Here’s one example of how the local Japanese media covered Rakuten’s “Learn English or Retire” announcement back then.
The English Mandate’s Results
Today the “English mandate” has allowed Rakuten to create a powerful organization.
Three out of the six senior executives in the engineering organization aren’t Japanese as the company aggressively seeks the best talent from around the world.
Half of Rakuten’s Japanese employees can now adequately engage in English communications and 25% of them communicate in English to foreign partners and subsidiaries on a regular basis.
Importantly, they’re no longer shy to use English. The company isn’t just using English in official meeting with its global partners and suppliers, but they’re also using it as they everyday working language.
The video below is Rakuten's movie on their "Englishnization" project.
Planet Earth’s Best Talent
When he started Englishnizaton Mikitani noted, “I believe Singapore is so successful because English is one of its official languages. It is a strategy that allows it to attract and employ the best workers from all over the world.”
As of April 2015, the average employee score on the TOEIC, reached 802 out of a possible 990 points. (A score above 800 indicates advanced proficiency.)
This is helpful because today, more than 10% of employees in our Tokyo offices are foreign nationals. Back in 2010, that number was only about 2%.
Within engineering, the numbers are even more dramatic; about 70% of our new hires come from outside Japan.
And we are attracting graduates of the best foreign universities such as Harvard, Yale, Stanford, Cambridge, Peking University and the Indian Institute of Technology.
Englishnization isn’t Easy
In just a few years, Rakuten is seeing a positive and successful impact – its ability to recruit and retain talent from around the world. This is a process any company – or country—can copy for global business success.
More recently, the company has made some key international acquisitions. It feels it can now incorporate them easier given its common communications platform.
Whether Rakuten will continue to expand successfully worldwide will depend on many factors – not just its common language strategy.
Having said that, with its all-English policy, t the company has laid the groundwork for a truly global mindset and a strong global future.