Market place 3.0, by Hiroshi Mikitani - review

A Japanese online pioneer forced staff to speak English. If only his other ideas were as original, says reviewer John McLaren.

by John McLaren
Last Updated: 15 Mar 2013

Hiroshi Mikitani is the founder and CEO of a large and successful Japanese internet mall you've (maybe) never heard of called Rakuten Ichiba.

You (almost) certainly will, though, have heard of some of his acquisitions, such as, Linkshare and Kobo, the e-reader device. It's all been a dizzying success so far, and Mikitani wants to share the secrets of that success with a wider audience.

The core distinguishing characteristics of Rakuten's malls are that the vendors are encouraged to have their own bespoke appearance, rather than having to fit into a template, and are allowed to have a direct dialogue with customers.

This 'empowers' the vendors, and we quickly find that this is Mikitani's favourite verb. Like it or not, everyone who works for him, does business with him, gets acquired by him, or buys from him is granted kryptonite levels of empowerment.

The author was a banker for a while and took an MBA at Harvard. I have no idea whether the banker years helped mould him, but Harvard may have played more of a part than he is willing to let on: many of the ideas he trots out as personal insights bear an uncanny resemblance to ones that appear regularly on business courses everywhere.

For example, as you go global, he asserts that it's smarter to create a 'federation', in which staff in any given overseas company have a degree of autonomy and have the chance of rising to the top, rather than an 'empire' in which the centre dominates and people are sent out from the hub to rule.

Now, this makes sense and it appears that Rakuten has executed its international development pretty cannily. But it is hardly ground-breaking.

In much the same way, he lets us know that the most important abbreviation within Rakuten is KPI and he helpfully informs his dear readers that this stands for 'key performance indicators'.

I genuinely cannot work out whether he knows that KPIs have been used by many corporations for a very long time, or whether he actually thinks he coined the phrase but none of his staff has had the nerve to tell him.

His most dramatic move was to announce one day to his staff in Japan that in future all communication within the company would be in English, a switch he terms 'Englishnization' (yuk).

Mikitani wisely consulted no one before dropping this bombshell and I would love to have been a fly on the wall beside the coffee machine 10 minutes after that announcement. Not only were all his staff required to write and speak only in English, and undergo regular testing on their progress, Mikitani declared that they would all have to study the language in their spare time and at their own expense.

He believed his employees would find this approach more motivating (and doubtless empowering), but I suspect they will have had their own adjectives for it.

Although Englishnization sounds like a combination of the brutal and the farcical (like many Japanese TV shows), it was probably a genuine masterstroke.

The collective inability of the Japanese to learn a useful level of English has been the country's greatest single barrier to success ever since the fulcrum of technology moved from factories that built things to ideas and software. In other words, they could create a Panasonic, a Hitachi or a Toyota, but not a Google, Facebook or Twitter.

On the subject of social media, Mikitani is convinced that it can play a large part in maximising customer satisfaction. He is a proud user of Twitter himself, employing it to post articles on economic news or comment on a great ramen restaurant, which he believes demonstrates that it is not just a 'platform for chitchat'.

We all have our pet hates and, boy, does this author have a biggie. It's Amazon, which he christens the 'Death Star'. After empowerment, Amazon-bashing is the most recurrent motif in the book. I was hoping for some sort of revelation on why Mikitani hates the company so enormously. Did Jeff Bezos once fail to return his call? Alas, we are not told.

If you want a readable account of how Rakuten has succeeded, Market Place 3.0 is the way to go. If you're looking for a 'how to' book, you'll find most of the lessons in other tomes.

Unless of course you're running a brickworks in Pontypridd and are secretly plotting a bout of Englishnization...

John McLaren is the chairman of the Barchester Group


Market Place 3.0: Rewriting the rules of borderless business
Hiroshi Mikitani
Palgrave Macmillan, £16.99

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