How Harvard Business School Prof. Tsedal Neeley charted the progress of ‘Englishnization’ at Rakuten

When Harvard Business School (HBS) professor Tsedal Neeley first met Mickey Mikitani in 2011, she didn’t know what to expect. Having spent many years studying globalization practices at multinational organizations, she knew that the Rakuten CEO’s radical decision to change his company’s corporate language from Japanese to English was the right move. She also knew it wouldn’t be easy.

Having recently made the surprise announcement to Rakuten’s primarily Japanese workforce that the company was changing its official internal language to English in order to better compete globally, Mikitani turned to his alma mater for help with the fledgling initiative. This decision led him to Professor Neeley.

Intrigued by Mikitani’s ambition and his radical start, she shared her insights to help make the transition a success. This was the beginning of a relationship at the center of one of Harvard Business School’s popular cases and the subject of Professor Neeley’s 2017 book, The Language of Global Success.

Reflecting on their first meeting, Professor Neeley shares, “I was struck by how clear he was about what Rakuten needed to do in order to compete in the next 10 years. I was struck by the clarity of it; that he could imagine and see around the corner and say, ‘This is so important. This is so big; that we need this global footprint in order to survive as a company.’”

The importance of cultivating “buy-in” for a radical departure from the norm

While Mikitani regularly credits Neeley for her analysis and insights on Englishnization, Neeley downplays it, saying “The work really came from Mickey and members of the organization.” Rather, Neeley suggests her role was more about reorienting the strategy to recognize the psychological experiences of employees and enable an effective transformation process.

Early on, Neeley highlighted the importance of achieving “buy-in” from employees, regarding it as crucial to the long term success of the Englishnization project. People needed to understand how Englishnization would be good for both them as individuals and the company as a whole. People also needed to understand that Englishnization was achievable.

While many organizations might have taken a sequential approach to rolling out change like Englishnization, Rakuten’s implementation was extreme. It was company-wide: all businesses, all markets and all employees. As Neeley points out, employees struggled to see the immediate relevance of Englishnization, particularly if their business units were primarily focused on serving the domestic market. But Neeley’s experience convinced her that this was the right approach.

“I knew from having deeply studied the global communication patterns across many multinational organizations that it was critical to make a decision about language for Rakuten. I knew it was the right thing, but what I didn’t understand was how it was playing out inside the company, particularly given the fact that the majority of the people who had to develop this new capability were living and working in Japan on a daily basis.”

“People would leave the house and go to work on a regular basis, and have to abandon their native languages and migrate to a completely new language that they may not use on a regular basis. I wanted to understand this experience: What was the reaction to the new rule and how could we optimally support this huge employee base? That was my question and that’s the thing frankly that kept me up at night, because it was thousands of people.”

Despite losing sleep over how Rakuten would implement its program and how its employees would respond, Neeley shared Mikitani’s conviction that the drastic shift to an English-first company was critical to the company’s future.

A company built for change; a stunning array of personal transformations

When a transformational initiative is launched, the outcome is never certain. One can predict how the cards might fall but often things don’t go quite as expected. It’s how leaders within an organization respond to the unexpected that separates great businesses from the average ones.

And for Neeley and Rakuten, there was no shortage of unexpected results.

Neeley hypothesized that young employees would likely do better at acquiring English than middle-aged employees. But, as the project progressed, the data told a different story. “I expected Millennials to completely outperform more middle-aged employees, but that wasn’t so,” Neeley comments. “People in their 40s performed much better, probably because they were much more motivated to learn the language in order to maintain their progress in the company… And potentially they had more resources to expend on their own in order to develop the skills.”

Neeley was also surprised by the extent to which the organizational culture was prepared for radical change. “Typically, it takes much longer for people to follow a radical change in a company. In Rakuten’s case, employees were much more prepared and inspired, which told me that this was an adaptive culture that was used to entrepreneurial activities in action, where people had the orientation to try whatever was new. In other words, the change muscle was well developed. That was a pleasant surprise. I think there would be much more resistance had this been a different company going through the exact same thing.”

A third surprise for Neeley was the personal transformations she saw among corporate leadership. “Meeting and talking to people who literally knew two words in English and within a year or year-and-a-half I could hold lengthy and organic conversations with them — that was stunning and inspiring.”

Finally, the speed of Rakuten’s global expansion following the shift to English was a major surprise for Neeley. “It was not long after Englishnization was put into place where you started seeing these aggressive and high profile global investments and acquisitions, and just overall expansion at Rakuten. Things actually followed very quickly after Englishnization was launched.”

The power of persistence (and having a CEO who leads by example)

As an outsider that was given unprecedented access to the company, Neeley had a unique perspective on what distinguished Rakuten in this initiative and how it was equipped to make such a massive cultural shift.

Neeley points to corporate messaging and leadership as key elements in stewarding the change. “Leaders typically don’t message as much or as long, which is a mistake in a radical change situation. What Rakuten has that other companies need to think about more is strong leadership, convicted leadership, consistent leadership — over the long term.”

“Another element was the extent to which Mickey himself role-modeled the behavior he wanted to see, meaning (that) after launching Englishnization, he stopped using Japanese in groups and even in one-on-one conversations. He would conduct actual performance reviews with his senior members of his team in English… Other companies may not have leaders who speak the language or are courageous enough to use it wholesale in order to model it.”

Beyond the relentless messaging and leadership, Neeley points to more formal factors that played a role in the program’s success as well, such as structural changes, hiring practices, and other ways the company reinforced the use of English in day-to-day work.

Finally, Neeley identifies long-term commitment as a critical element. “You have to stick to it and understand that this is a 10-year journey. You have to be persistent, and unless you’re persistent and relentless for that entire time, the cultural transformation is not going to happen. This company has been incredibly consistent.”

The cultural impact of Englishnization: Japan to the world

Embarking on a project with the potential to cause considerable internal disruption is bound to have an equally large impact across the entire company’s culture. But surprisingly, Neeley didn’t observe this movement because the lack of common language had inhibited the corporate culture to spread across foreign subsidiaries.

“When we talk about corporate culture what we really mean is values: What’s important to the company? Who are we? What are our norms, our attitudes and behaviors?” At Rakuten, the corporate culture started to spread globally only after Englishnization. She adds, “The culture, from my point of view, has not so much changed but has diffused across the organization. Following Englishnization, the unique culture — which I truly believe is a competitive advantage — of Rakuten was able to flow outside of Japan into subsidiaries and drive people’s behaviors in ways that had made Rakuten successful [in Japan].”

The HBS Case Study and the relevance of Englishnization to the digital future

Since Professor Neeley first published her case Language and Globalization: ‘Englishnization’ at Rakuten in 2011, it has gone on to not only become a popular case at Harvard Business School, but also at a growing number of the world’s top schools, including the top 10 business schools in the U.S. and over 145 universities around the world. 

Neeley, who is naturally thrilled to see her work influence discussions at business schools and organizations around the world, identified several reasons the case study has proliferated so far: “If you are a global company and want to become more global, you’re interested in the case. If you are a largely domestic company — meaning, your market share mostly comes from your domestic business — and you are trying to expand out of your domestic business, you’re going to be interested in Rakuten. If you’re dealing with communication challenges across your global company, you’re going to be interested in Rakuten. If you’re interested in change and change management — particularly transformational change — you’re interested in the Rakuten case.”

Beyond the dynamic value the case study can offer, Neeley also thinks it has resonated because of its relevance to the times. “In a period where we are seeing discontinuous change — probably the most change that we have seen since the Industrial Revolution, but even faster than that — in today’s digital environment, the case is becoming incredibly relevant.”

As one of the world’s top educational institutions, HBS is constantly evaluating and reinventing its curriculum to stay at the cutting edge. The Harvard Business Analytics Program, a new interdisciplinary program aimed at preparing executives in various aspects of digital work and transformation including coding, incorporates Neeley’s case study.

“Recently, I closed a program with the Rakuten case. It’s used as an example of the kind of transformation executives needed to enact in their own organizations using the framework that Rakuten used for Englishnization.”

Neeley observes that this surge in interest is only the tip of the iceberg and that demand for transformational insights will only increase.

As more and more companies look to the Englishnization case study for inspiration and insight, Rakuten’s leadership team has their eyes firmly set on the future. With big plans on the horizon, there is little time for back-patting or self-congratulations. The next radical change, the next global challenge, the next big barrier to break down all await.