Using Language to Build a Global Company

New Book: In her new book The Language of Global Success, Tsedal Neeley describes Japanese tech giant Rakuten's five-year effort to adopt English as its lingua franca of business.
  • Author Interview

A Company's Five-Year Effort to Globalize

Interview by Sean Silverthorne

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.

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.

Silverthorne: For companies that decide to promote a one-language culture, what are some of the implementation challenges most overlooked?

Neeley: A language strategy is a full-in, full-on undertaking that should be regarded as a radical change. Overlooking the change management work that is required—like encouraging buy-in and sustaining employees’ belief in their capacity to acquire the new language, culture, or both—is crucial. Tactics that help people feel more confident and motivated include continual messaging, internal marketing, and branding the organization as global. Finally, this type of globalization work is a multi-year journey. But, I am convinced now more than ever that a one-language culture is not a nice-to-have feature of a global company, it is increasingly a must for some or all parts of globalizing firms.

Silverthorne: What’s your advice to employees who suddenly find themselves in a Rakuten-like situation?

Neeley: Developing language or cross-cultural fluency in the course of globalization is difficult. Employees have to climb steep learning curves. They will also be exposed to differences at work, an inevitable outgrowth that comes with globalization.

The most successful global employees in climbing the learning and culture curve exhibited what I call Global Work Orientation, which consists of five attitudes and behaviors:

  • Positive indifference is the ability to overlook cultural differences as being not especially important or worthy of attention, while remaining optimistic about the process of engaging the culture seen as foreign.
  • Seeking commonality between cultures enables employees to draw closer to a foreign culture and become receptive to its differences.
  • Identifying with the global organization’s values and goals, rather than those of a local office.
  • Initiating cross-border interactions as much as possible develops trust and shared vision among international coworkers. Interactions are also vital for sharing knowledge across sites.
  • Aspiring for a global career is also important, because people who envision a globally expansive professional advancement make decisions that reinforce their competencies.

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.

  • Book Excerpt

The Day a Japanese Company Learned English

from: The Language of Global Success
by Tsedal Neeley

On Monday, March 1, 2010, Hiroshi Mikitani stepped to the podium at the Tokyo headquarters of his company, Rakuten. At forty-four, Mikitani was the billionaire celebrity CEO of Japan’s largest online retailer and was renowned for making daring business decisions, made all the more controversial in Japan, where conformity and tra- dition are esteemed. Fourteen years earlier, he had left an enviable career at the Industrial Bank of Japan to launch Rakuten with a small founding team. By 2010, his company was a household name and Internet destination of choice for the majority of Japanese online shoppers. Mikitani was often dubbed the Bill Gates and Jeff Bezos of Japan for his prescience in seeing the changes technology would bring to commerce and for the acumen he had demonstrated in Ra- kuten’s meteoric rise.

Mikitani adjusted the microphone. These weekly companywide meetings, called Asakai, were attended by over seven thousand Japanese employees—crowded into an enormous auditorium, often weaving around the corner and into an overflow room—and by a loyal contingent of Rakuten’s three thousand overseas employees who watched via video. Most of the managers watching remotely understood little Japanese, but they liked watching their charismatic CEO in action. Later, they would receive translated summaries of his speech.

On this particular day, Mikitani had an announcement that departed from the usual format. He spoke from the podium in English. “For the first time in the entire history of Rakuten,” he said, “we held today’s executive meeting in English. Many executives struggled quite a bit, but we managed to get through the entire agenda.” As the audience strained to listen he announced that “our goal is to catch up with the global market. To step up to this challenge we must try to change our language gradually from Japanese to English. This is going to be a long-term effort for us. Starting this month, my own speech will simply be in English.” Mikitani went on to explain why he believed it was critical for Rakuten in particular and the country of Japan in general to acquire proficiency in English.

Language, he insisted, was the bottleneck that precluded the organization from leveraging valuable business knowledge that had accrued within the Japanese headquarters and existing subsidiaries. A common language was the only way to extend knowledge sharing across the organization’s existing global operations, as well as those that would be newly and rapidly established in order to efficiently achieve business results. He reminded his employees that Rakuten aspired to deploy operations in twenty-seven countries and raise the overseas portion of their revenue to 70 percent within ten years. An important market for the e-commerce global growth strategy was the U.S. market, in line with companies like Amazon and eBay, where English proficiency would clearly be necessary. The Tokyo office was then steadily hiring engineers from India and China who spoke English, but not Japanese. Mikitani said what was perhaps most difficult for his workforce to hear: he wanted to continue expanding his talent pool and sought to hire non-Japanese workers for the Tokyo office as well as elsewhere in the company.

Finally, there was the shrinking Japanese GDP. Mikitani told his audience: “By 2050, Japanese GDP as a portion of global GDP will shrink from 12 percent in 2006 to 3 percent.” Fast and direct communication—without the cumbersome time delays that trans- lation incurred—was the only way to integrate his business across multiple nations and insert his company effectively in non-Japanese markets. He reminded his workforce that “our goal is not becoming number one in Japan but becoming the number one Internet services company in the world. As we consider the future potential growth of the Japanese market and our company, global implementation is not a nice-to-have but a must-do.” And he promised that changing the language employees spoke would affect more than just communica- tion. It would revolutionize how Rakuten workers saw themselves and interacted with the rest of the world.

Mikitani saved the bombshell of his speech for last. By April 1, 2012, two years from the first all-English meeting, Rakuten employees would be required to score above 650 on the 990-point Test of English for International Communication (TOEIC) or face the consequences. If his audience did not understand the precise wording they would soon feel its impact. Mikitani promised: “We will demote people who really do not try hard. We will monitor their progress and their test scores, and I will get reports from all the managers about employee progress.” Soon after, he instructed division heads to provide monthly reports on the average TOEIC scores of their employees relative to the desired target.

By the next morning, Japanese language cafeteria menus were replaced with their English equivalents. English replaced Japanese floor directories in Rakuten elevators. Even the corporate executives were stunned. Mikitani had not consulted with them before announcing his decision because he had assumed they would resist the idea of a full-on English conversion. Instead, by announcing the mandate directly to the entire company, he made the policy immediate and irreversible. In Mikitani’s mind, the future of Rakuten and Japan depended on what he called “Englishnization” and was too crucial to postpone. He had invented the term to embody what he called an unprecedented, radical idea for a Japanese company. One of Rakuten’s most critical principles, “Speed!! Speed!! Speed!!” was in action. Englishnization had begun full force.

Excerpted from The Language of Global Success by Tsedal Neeley. Copyright © 2017 by Princeton University Press. Reprinted by permission of Princeton University Press. All rights reserved.

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