At the Foreign Correspondents Club of Japan, Rakuten (JSD:4755) CEO Hiroshi Mikitani gave a talk on the progress of his company’s ‘Englishnization’ program. Below are his comments, recorded as accurately as possible, but not quite verbatim.
#12:39: Usually I talk about the internet, but today I’d like to talk about our ‘englishnization’ program.
#12:44: From day our our vision was to become a number one global internet company. But as we moved on I felt we were missing something. We had to use translators to talk to employees for our foreign subsidiaries. And then I had an ah-ha moment that we everyone could speak English. But some thought it was too difficult, to hard to enforce. But one thing that pushed me to move forward, was our experience with our foeign employees in Japan. We hired foreign, Chinese or Indian employees, and they learned Japanese in three to six months sometimes, becoming very fluent. I thought, why can’t Japanese people do this. And I thought if we could communicate in English for a substantial amount of time then we could do it.
#12:48: The objective of the program is how to ensure our best practices can go worldwide, and how to bring our benchmarks world wide. [...] Would would also like to hire global talents. 30 percent of our fresh graduate hires are foreign employees. Some from Japanese universities, some from overseas universities. [...]
#12:53: Up until the middle of last year, we were pretty confident about this. Harvard Business School ran a case study about this, and the discussion was very hot — some students got emotional about it. So many employees are struggling, and are stresses. So felt we needed to help them. We provided classes, part of their official assignment — not for after work.
#12:54: In my ‘Englishnization’ book I wrote about the challenges we faced. It was not easy for me, not easy for my employees. They have worked very hard and overcome many challenges. I’m hoping this is the beginning of a trend. I’m going to donate the income of my book to Tohoku people, and I hope this book will be of some help to open up the eyes of Japanese business community and Japanese society.
#13:00: I’m surprised that many Japanese bureacrats are reluctant to speak English. [...] I would encourage people to not be afraid to speak in front of others regardless of their English level.
#13:04: (On Chinese language) I’m learning Chinese, I’m struggling the tones are difficult. I think Chinese and English are fundamentally different. Chinese people are learning English too, their level is much higher than the [average] Japanese people. If Chinese later becomes the standard for English, then of course, we will need to switch.
#13:06: Before this project we had to select employees who could travel overseas. But we don’t need to do that anymore.
#13:07: Of course there are lots of problems (for Japan) but English is a critical problem. Some say we are the only competitor to Amazon [...] but without English, it’s very difficult to compete on a global level.
#13:09: Lack of English communication skills really prevented us [Japan] from being a global leader, so we really need to wake up and open up our eyes.
#13:10: I would like to help Japanese schools and society, educate in English in a more useful way. If you calculate how many hours Japanese people spend currently [inaudable] it’s a huge issue, and its a big waste of time. I’d like to change the English education program to a more useful one.
#13:13: Regarding Pinterest, I just visited their office and sat with Ben Silverman and talked about my business. And they sort of share our vision for the internet. THey visited our office and met our staff. They got the impression that we are different, and that helped to get us aligned.
#13:14: (on Kobo and Rakuten getting into hardware) We are not focusing on selling hardware but rather selling content. What is important is how to create an ecosystem and combine harware and software, content and maybe financial services.
#13:15: (Are you admired by Japanese companies, or seen as a maverick) It’s a difficult question. I hope so, but maybe not. When I was working for the Industrial Bank, nobody left to start up a company. The reason I did it was I felt we needed entrepreneurship here. The more I succeeded, the CEO noted that ‘the more you succeed the more people will leave’. So I think I contributed. [...] It depends on how we succeed, I think we have already changed the attitudes of university students. [...] The younger generation now understands that they have to study English.
#13:20: Two years ago e-commerce was taking off in Europe, especially in the UK. But our concept of small shops was very unique. And we tried to apply that model to Price Minister. We sent many junior people to France and they came to us. Now they use the B2B2C model. Another good [benefit of Englishnization] is that if our foreign staff come to visit, they can come and sit in our working hall. Before we had to segregate them and get translators. But now they can just com.
#13:24: (When asked about merchants who don’t speak English) There’s an English site on Rakuten, and I would recommend you to buy over there. Eventually we would like to do so, but we are a marketplace, and we cannot force our shops to learn English. But gradually we could introduce cloud base translation, but we have to justify the cost — sometimes the cost could be more than the product itself.
#13:26: Our intention is to export Japanese working culture to other countries. I don’t think language has anything to do with with working culture. Many people say that if we speak English we will lose some culture. But I think English will help us show our strengths globally, show our assets all over the world.
#13:28: I don’t have exact numbers, but more than 50 percent of our staff are female. For management I think we’re father ahead than Japanese counterparts. For top level executives we are still having a challenge, I don’t have exact numbers, but I think maybe 30 percent. But we are definitely trying to diversity our executives.
#13:30: (On how much time employees spend studying) It depends on each individual, but if we use English while working and they are exposed to English for 8 hours — 100 days, 800 hours — but the reason I can speak better than I used to is because I speak English in our company as well.
#13:32: (On expanding to China) Unfortunately we have already withdrawn but it doesn’t mean we have given up. We’re going to go there in the future. The biggest problem in China is a structural issue, all these western and Chinese VCs have invested lots of cash into growth and they keep discounting and are selling below their acquisition price. The reason why its so competitive is because VCs have invested so much there.
#13:34: When you think about how much vocabulary you need for work, it’s not very much as most of the business is very routine. They struggle initially, but I have seen drastic improvement over the past few years. It’s a matter of short term cost versus long term impact.
#13:36: I don’t think we have anyone who disgrees with the intention of our project anymore. Because we have seen the huge benefits of the project and they can feel that it’s beneficial for their work. This has become a sort of given. But there was [some resistance] before. So we had to try to convince and encourage, and we had some internal marketing campaigns for that.