01 Mar 2012
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Learning to Speak the Language of Business

Hiroshi Mikitani / Rakuten
by Roger Thompson

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You might call Hiroshi Mikitani (MBA 1993) the Jeff Bezos of Japan. Both lead hugely successful Internet commerce companies with a commanding presence in their home markets. But to call Mikitani’s company, Rakuten, the Amazon.com of Japan would overlook fundamental differences for customers and merchants alike.

“We created a real online marketplace where customers can interact with shop owners, and we empower our merchants to build relationships with their customers,” says Mikitani, Rakuten’s founder, chairman, and CEO. Amazon offers neither experience, he adds.

Launched in 1997, Rakuten’s online shopping mall now hosts more than 37,000 merchants, and the company has expanded into other e-commerce businesses, including travel, banking, telecommunications, and credit card services.

Not satisfied with dominating Japan’s e-commerce landscape, Mikitani believes the company’s future lies in taking its online expertise global. Since 2008, Rakuten has acquired or partnered with e-commerce firms in 10 countries—including Brazil, China, and the United States—and plans to add seven more this year.

Success as a global player takes more than an aggressive acquisitions plan, says Mikitani. It requires that all 7,100 of the firm’s Japanese employees communicate in English, the global language of business. Mikitani announced the changeover, in English, in March 2010 and set a two-year deadline for everyone to demonstrate English proficiency or sacrifice chances for advancement. He dubbed the project “Englishnization,” which has attracted international media attention.

The Japanese language, Mikitani reasons, poses a barrier to the firm’s global ambitions. “There was a huge language barrier between the Tokyo office and our subsidiaries outside Japan,” he observes in a 2011 HBS case study on Rakuten. “One day the idea just struck me: ‘Why don’t we try communicating just in English?’ It’s an entrepreneurial kind of thing: you come up with an idea one day, and suddenly you jump off the cliff with it.”

As the proficiency deadline approaches in July, Mikitani says employees “are progressing better than expected.” He credits HBS assistant professor Tsedal Neeley, who wrote the Rakuten case study, with providing advice for communicating more clearly why English proficiency is important for Rakuten’s future.

“This is not just a Japanese company issue,” Mikitani points out. “Other companies doing global business also have been segregated by language. If we succeed, we’ll be followed by others.”

—RT

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