CEOs learning ‘globish’ to expand overseas

by Naoko Fujimura and Shunichi Ozasa

Bloomberg

Oki Matsumoto, chief executive officer of online trader Monex Group Inc. and a former Goldman Sachs Group Inc. partner, has a solution to the stagnant economy: Learn “globish.”

Matsumoto holds regular parties at the Tokyo-based company where employees must speak globish, or global English, a language for nonnative speakers using basic grammar and a vocabulary of 1,500 words.

Fast Retailing Co. and Rakuten Inc. are also promoting English to help employees communicate with international partners and expand overseas.

“My English is totally globish,” Matsumoto wrote on his blog July 1. “I don’t feel any inconvenience in speaking with various people from around the world, even if my pronunciation has a Japanese accent.”

As the population shrinks and a stronger yen swells companies’ buying power for overseas acquisitions, the need for better international communication is growing in Japan. The economy slowed to an annualized 0.4 percent in the second quarter, from 4.4 percent in the previous three months, allowing it to be overtaken by China as the world’s second biggest.

“Emphasizing English is definitely the right direction to go, as the domestic economy has peaked,” said Toshihiro Nagahama, chief economist at Dai-ichi Life Research Institute. “Companies need more sophisticated English speakers for their globalization, which is crucial to spur profits.”

Asahi Breweries Ltd., Japan’s second-largest beer maker, is sending 10 employees to overseas subsidiaries for a year to learn local languages, culture and business rules, President Naoki Izumiya said Aug. 26. He forced all executives to take the Test of English for International Communication, or TOEIC, a standardized business English test, in April.

“I want the company to be internationalized because we can’t remain ‘Tokyo’s Asahi’ forever,” Izumiya said.

Globish was started in 1995 by French native Jean-Paul Nerriere, a retired marketing executive at IBM Corp., according to its website. The first book on the language was published in 2004.

Shinichiro Yamada, a salesman at Monex Group, is one of those learning globish, even though he only deals with Japanese clients.

“I’m poor in English, but I can speak,” Yamada, 28, said in English at one of Monex’s parties last month. “My English skill is rising.”

Yamada said he needs English to get market information and understand products from the U.S. and the U.K.

At Rakuten, Chief Executive Officer Hiroshi Mikitani, a Harvard Business School graduate, is pushing for the use of English in internal documents and meetings. He spoke English at a news conference for mostly Japanese reporters Aug. 5 when the company announced its first-quarter earnings. The rush into English has raised concerns with some executives in Japan.

At Honda Motor Co., which sold 82 percent of its vehicles in overseas markets in 2009, Chief Executive Takanobu Ito said the enforced use of English is “ridiculous.” He said companies should use English only when appropriate, not in meetings attended only by Japanese people.

Nidec Corp., the world’s biggest maker of disk-drive motors, is being more ambitious. Managers will need one foreign language from 2015 and department heads will need two from 2020, according to the company.

“Chinese will be important,” spokesman Norio Tamura said. “We plan to increase the number of production sites there fivefold.”

Fast Retailing, operator of the Uniqlo clothing chain, plans to spend as much as ¥400 billion on overseas expansion, according to Chief Executive Tadashi Yanai. Yanai has told his employees to study English for two hours every day for a year and offers a program to acquire English skills. Fast Retailing is also working on a global system to produce 1,000 internationally competent managers every year.

English conversation schools in Japan are recording spikes in enrollment. The number of new corporate clients jumped 50 percent in the three months through June 30 from a year earlier, said Jun Nakagawa, a spokesman at Berlitz Japan Inc. Interest in Chinese has also increased, overtaking French in terms of numbers of students to second place, he said.

Employees who are fluent in English will be essential for overseas expansion plans, said Naomi Fink, a strategist at Bank of Tokyo-Mitsubishi UFJ Ltd.

“There’s more emphasis put on English and English as a communication language for business in Asia as a whole,” Fink said. It’s needed “to communicate with the maximum amount of potential clients or potential business partners.”