Japan’s leading entrepreneurial companies, Rakuten and Uniqlo, are taking a no-nonsense approach toward going global by adopting English as the official workplace language.

Speaking the Global Language of Business

Drastic times call for drastic measures

Two of Japan’s top entrepreneurial companies have adopted English as the official language of their workplace. This is in a country with companies known for avoiding risk whenever possible. So why would Rakuten and Uniqlo take such atypical measures at a time when English-language proficiency is low in the country? TOEFL (Test Of English as a Foreign Language) score data from 2004 to 2005 placed Japan second to last in Asia in terms of English language skills with 191 points, only one point higher than North Korea. Not helping, the collapse of two of Japan’s largest English language school chains, Nova and GEOS, over the past six years has reduced the number of opportunities for adults to study English at private language schools. So this ‘sink or swim’ approach by Rakuten and Uniqlo to speak English in the workplace is a bold but strategic maneuver at a time when they are expanding to compete in the global marketplace where the official language of business is English.

ENGLISHNIZATION

Rakuten, a leading online shopping mall in Japan, coined the term “Englishnization” for its strategy to implement English as the official language at work. Through its global acquisitions, Rakuten has become one of the top 10 Internet companies in the world, joining the ranks of Google, Yahoo!, Amazon and eBay. According to Rakuten public relations representative Naoki Mizushima, there are several reasons for Englishnization:

To share information among employees globally:

Rakuten wants to implement best practices for sharing information between departments, not just from the top down but also laterally among co-workers. As Rakuten is expanding in Japan and globally, it was decided that English is the most effective tool for communication to implement this strategy.

To gain the latest information quickly:

As a technology company, Rakuten needs to keep on top of the latest information on technology, which is typically written in English. Japan has long had a translation culture, leaving Japanese engineers waiting for book translations to be released. That can often take over a year. Thus, Rakuten encourages its engineers to look for solutions themselves in English, giving the company a competitive edge over its Japanese competitors.

To increase the ratio of employees from outside Japan:

Foreign employees of Japanese companies often feel isolated and not part of the group when the official workplace language is Japanese. By globalizing its headquarters, Rakuten wanted to instill a feeling of unity among all employees. From a hiring point of view, Rakuten feels they can now recruit talented people from all over the world. Prospective employees don’t need to worry about a Japanese language barrier.

Would you drive without a license?

Uniqlo, Japan’s leading clothing retail chain in terms of sales and profits, now operates in the United States, the United Kingdom, France, Russia, China, Hong Kong, Malaysia, the Philippines, Singapore, South Korea, Taiwan and Thailand. In a November 2011 interview with the Asahi Newspaper, Uniqlo’s CEO Tadashi Yanai said, “If people cannot speak English in business in the future, it will be tantamount to not having a driver’s license even though they have to drive. English is the language for business not only in the United States and Europe but also in Asia. I think (English is indispensable in business) even though I am running a company in the retail sector, which is most focused on the domestic market. That thinking must be taken for granted in the manufacturing sector, and also applies to the service sectors other than retailing.”

How was the implementation process?

In Spring 2010, Rakuten made the official announcement that July 1, 2012 would become the official Englishnization changeover day, providing time to implement the process gradually. In the beginning, the management learned through questionnaires that some employees were struggling and becoming stressed out, so more English language learning programs were offered to help. Rakuten reports that employees are very positive about the changeover, as improving their English means they are acquiring a life skill. Some employees are reported to still have difficulty in communicating during meetings, although it has improved greatly since the changeover began.

Isn’t it inefficient to have Japanese workers speaking English to each other?

Although a degree of inefficiency in the short term has resulted in lower productivity, Rakuten believes that Englishnization will be beneficial for improving the strength of the group in the long term. After first making the announcement in 2010, Rakuten reports that the global M&A process became smoother as guests from abroad visiting Rakuten’s HQ were able to see the staff speaking English, making them feel that Rakuten was making a sincere effort to become a global player.

Yanai said, “Without officialdom, employees will not work hard. We can talk in Japanese if we have only Japanese employees. But we will employ non-Japanese people in half of the positions in the head office within three to five years. Without English, we will not be able to even hold meetings. But I want to emphasize that English is merely a tool for business. Japanese will remain the standard language for our thinking and culture. We have no intention of assimilating our thinking to those of overseas enterprises.”

A global trend to follow

In 2010, Rakuten CEO Hiroshi Mikitani told CNN, ”English is the only global language.We’re doing a global business. I think this is the only way a Japanese service organization can become a global organization.” This situation is not unique to Japan. According to Harvard Business School Professor Tsedal Neeley, companies that don’t adopt English as a standard for their entire organization will “experience some form of bottleneck” at some point. Neely wrote in the May 2012 edition of Harvard Business Review that Daimler- Chrysler, Samsung, Airbus, Nokia, Renault, Microsoft Beijing and more than 70 Danish companies have all mandated English as their corporate language.

SURVIVAL OF THE ENGLISH-FITTEST

Changing the workplace language from Japanese to English may not be for every company, but for those wanting to compete in the global marketplace, enduring short-term inefficiencies in order to achieve long-term sustainability can provide a competitive edge. Over the past decade Japan has struggled to compete against inexpensive manufacturing in China and technological advances in South Korea. But if more Japanese companies follow the lead of Rakuten, Uniqlo and others that are going “English Only,” then Japan can retake the lead in Asia. “Just think about Japan in 10 years time,” said Yanai. “People who can do their jobs only in Japan will not be able to survive.” tj

This story appeared in Issue 270 of the Tokyo Journal.

To order Issue 270, click here.