Rakuten's CEO Made Staff Switch to English - Or Face Demotion

Key Concepts

• Englishnization: The strategic policy of adopting English as the official corporate language.
• Global Competitiveness: The necessity of operating in a borderless digital economy.
• Talent Acquisition: The shift toward a global recruitment pool to overcome domestic labor shortages.
• Corporate Cultural Transformation: The process of aligning internal communication standards to facilitate international collaboration.

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The Strategic Rationale for Englishnization

Hiroshi Mikitani, CEO of Rakuten, explains that the decision to mandate English as the company's official language was driven by the reality of the global internet economy. He argues that businesses today face inevitable international competition, both within Japan and abroad. To remain competitive, Rakuten needed to:

• Access Global Best Practices: By removing language barriers, the company could integrate knowledge and methodologies from around the world.
• Expand the Talent Pool: Relying solely on Japanese engineers was quantitatively insufficient. Currently, 70% of Rakuten’s new engineering hires in Japan are non-Japanese, most of whom do not speak Japanese. English serves as the necessary "lingua franca" to ensure seamless communication across a diverse workforce.

Implementation and Challenges

Mikitani acknowledges that the initial two-year timeline for the transition was "very aggressive" and ultimately proved unrealistic.

• Timeline Adjustments: The company had to adjust the deadline multiple times to accommodate the learning curve of the existing workforce.
• Support Framework: To assist employees struggling with the transition, Rakuten implemented a structured support system:
  • Flexible Scheduling: Employees were permitted to study English in the morning and begin their core work duties after lunch.
  • External Training: The company facilitated access to professional English language schools.
• Outcome: Through these supportive measures, almost every employee successfully met the company’s target goals on standardized English proficiency tests.

Key Arguments and Perspectives

Mikitani emphasizes that the move was not merely about language, but about survival and growth in a connected world. He rejects the idea that Japanese or Chinese could serve as the primary language for a global company, asserting that English is the only viable option for international business.

• Notable Quote: When asked if people thought he was crazy, Mikitani admitted, "It took much longer than 2 years, to be very honest."
• Evidence of Success: Mikitani reports that the company is now seeing a significant "payback" on this investment, suggesting that the long-term benefits of a unified, English-speaking workforce have outweighed the initial friction and implementation costs.

Synthesis and Conclusion

The transition to English at Rakuten serves as a case study in corporate transformation. By recognizing that domestic talent pools were insufficient and that global competition was inevitable, leadership forced a cultural shift that prioritized international integration. While the implementation was more difficult and time-consuming than originally anticipated, the use of structured support systems allowed the company to successfully upskill its workforce, ultimately enabling Rakuten to operate effectively as a global entity with a diverse, international team.