Mickey Mikitani, Chairman and CEO, Rakuten Group
The world is full of great ideas. But which ones will come to fruition?
“Deciding which projects get our time and attention are critical choices that shape our future.”MICKEY MIKITANI, CHAIRMAN AND CEO, RAKUTEN GROUP
As a leader, it’s important not to leave that decision to chance. Deciding which projects get our time and attention are critical choices that shape our future. As such, I have developed a system to help me understand which projects should get my time. When an idea emerges, I consider the following criteria, then act.
Profit — A long-term perspective
Perhaps it goes without saying, but considering the profitability of a business project is a crucial place to start. Is the project before me one in which we can pursue a high rate of return in the long run? Of course, there are no guarantees in life, but it’s reasonable to assess the potential size and scope of any new idea. Sometimes, an opportunity may emerge that is creative and exciting — but the potential market for the idea is intrinsically small. In that case, it’s not an idea I’ll pursue.
Key in my profit analysis is the idea of the “long run.” While I want to be in businesses that will be big and profitable, I understand those may be long-term goals. When I put my support behind a project, I know it may need time to achieve its ultimate financial goals. This is not always an easy concept to explain to the investment community. But it is a truth on which I have built my business.
“Key in my profit analysis is the idea of the “long run.” While I want to be in businesses that will be big and profitable, I understand those may be long-term goals.”
Passion — Is there an evangelist in the house?
Does the project have an in-house evangelist? Is there a Rakuten leader who feels passionately about this? This is another key factor in my decision-making. I want to know that the project we undertake will be shepherded by a leader who has a passion for it, as I know this will be a decisive factor for success.
This is one of the reasons Rakuten’s organic farming platform got off the ground. Rakuten Farm connects farmers and consumers throughout Japan online. While the business is still in its early stages of growth, there are evangelists in the company who are very passionate about partnering with local farmers to bring real change to Japan’s organic food industry. Without their dedication to changing the industry, it would be very difficult to take on such a big challenge.
“Does the project have an in-house evangelist? Is there a Rakuten leader who feels passionately about this? This is another key factor in my decision-making.”
Our golf business, Rakuten GORA, is another example. I’ll confess that I wasn’t sure how big the business would be at first. But thanks to passionate leadership from Kaz Takeda and Kiichi Sorimachi, GORA is now one of the largest golf online reservation services in Japan and it’s getting bigger and bigger. Last spring GORA launched the Rakuten Golf Score Management App, and continues to innovate in the space.
I am excited about businesses like these: businesses that have passionate leadership championing the achievement of their goals.
Public good — will this make the world a better place?
When I evaluate a new project, I ask myself: Will this make the world a better place? That is a high bar for many business projects to clear, but it is one that I consider critical.
This is not just for my own sense of purpose. From the start, I wanted my company to create things that would leave the world a better place. But this is also important for recruiting and retention. In the talent wars we find ourselves in today, an employer must be able to share a sense of purpose and mission with potential employees. In order to retain our top performers, we must also be sure they feel a strong sense of commitment and purpose in their work.
“When I evaluate a new project, I ask myself: Will this make the world a better place? That is a high bar for many business projects to clear, but it is one that I consider critical.”
Serving this need means that I pick projects by looking at the larger public goal. Does the idea have a benefit to society? Will it make the world a better place? I consider this metric all the time.
When I first started Rakuten Ichiba and looked at the marketplace as a system to allow small and mid-sized merchants to participate in e-commerce, I made this choice. I did it again more recently, when I considered our decision to become Japan’s fourth major mobile network. Rakuten Mobile is more than just a new service. It’s a way for Rakuten to help democratize the mobile industry and make it more accessible and affordable for all.
How to decide to decline or exit an existing business
This system also helps me decide when to decline or exit an existing business. One example is an opportunity we had some time ago to move Rakuten into the video game business. The market for video games was thriving and expanding at the time. There was a clear road to profit. But the other two criteria gave me pause.
Personally, I was not passionate about video games. And I had concerns about whether the games we were considering would be a positive force in the world. With those two points in question, my answer to the video game opportunity was no. It was not a business in which I felt we could be successful at that time, and thus, my time and resources were better spent elsewhere.
Leaders are faced with countless decisions every day. Experience allows us to build systems that help us innovate and create. We must apply systems to our thinking process as well. It’s a way we can be sure we’re making the best possible decisions.