Global Business Speaks English

English is now the global language in business. In an effort to improve communication and performance across business ventures and functions, multinational corporations are increasingly mandating English as their common corporate language - Airbus, Daimler-Chrysler Fast Retailing and Nokia.

A common language is not only a good idea, but it is a necessity for all companies, whether they are American or French. Imagine a group meeting of salespeople at a Paris company headquarters. You wouldn't care if all the salespeople could speak English. Imagine that the same group calls a Paris-based company to sell their services. The potential customer might not be aware that they would be hiring employees from other parts of France. This happened in one company that I was a part of. Two French companies sat together in Paris. Employees couldn't reach each other to close a deal. It was a shocking wake up call. The company adopted soon an English corporate language strategy.

Hiroshi Mikitani, the CEO at Rakuten, Japan's largest online marketplace, was concerned about similar issues. He decided in March 2010 to make English the company's official business language. Mikitani believed that the new policy, which would affect approximately 7,100 Japanese workers, was crucial to the company's goal of becoming the top internet service provider in the world. This is especially important considering that expansion plans are concentrated outside Japan. Mikitani felt responsible for helping to expand the worldview of his conservative island country.

Global Business Speaks English

The multibillion dollar company, which was a cross between Amazon.com.com. And eBay, was on a growth frenzy: It acquired PriceMinister.com France, Buy.com.com and FreeCause.com in USA, Play.com UK, Tradoria Germany, Kobo eBooks Canada, and formed joint ventures and partnerships with major companies in China. Mikitani was very serious about the language changes and announced the plans to employees not only in Japanese, but also in English. Overnight, the Japanese language cafeteria meals were replaced by English-language menus. Elevator directories also were replaced. He also stated that employees would need to be proficient in the international English scoring system within two year or they could face dismissal.

The story was immediately picked up by media outlets, and corporate Japan responded with both fascination and contempt. Takanobu Ito, Honda's CEO, stated that it was stupid for Japanese companies to only use English in Japan, even though the workforce is predominantly Japanese. However, Mikitani believed it was the right choice, and the policy has been a success. Mikitani was able to create an impressively diverse and powerful organization thanks to the English mandate. Three of the six senior engineers in Mikitani's engineering organization aren’t Japanese. In fact, they don’t even know Japanese. The company continues its aggressive pursuit of the best talent from all over the globe. Rakuten's Japanese employees can communicate in English now that half of them are fluent.

Also read:

It is difficult to adopt a global language policy. Companies will often make mistakes along the journey. It's quite radical and is likely to face resistance from employees. Some may feel at an advantage if their English isn’t as good as other people's. This can lead to poor team dynamics and performance. National pride can also be a problem. However, to thrive and survive in a global economic environment, companies need to overcome language barriers. English will almost always remain the common ground, at most for now.

English is the most widely spoken language in history. It's used by 1.75 billion people in the world, that's about one in four people. There are nearly 385 million native English speakers in countries such as the U.S.A and Australia, approximately a billion fluent speakers from formerly colonized countries like India and Nigeria, as well as millions of people who have learned it as a secondary language around the globe. It's used online by approximately 565 million people.

Mikitani calls "Englishnization" a significant benefit. However, few companies have successfully implemented an English-language policy. Based on my work with companies over the past decade, I have developed a framework that can be used to help companies succeed in their language efforts. While there's much to be learned, there are success stories. Adopters will reap the benefits.

Why English only?

It is clear that multilingualism without restrictions can lead to inefficiency and hinder key interactions. English is now the official language of business regardless of where the company is located. It's easier to coordinate tasks and work closely with customers and partners across the globe.

There are three primary reasons English is being adopted as the corporate standard.

Competitor pressure.

To be able buy or sell, it is important to be able speak with diverse customers, suppliers, as well as other business partners. If they are lucky, they will speak your language. But you cannot count on that. Companies that fail to develop a language strategy for their markets are effectively limiting their growth potential to those markets. This puts them at an advantage over companies that adopt English-only policies.

Globalization of tasks & resources

Language differences can create a bottleneck - a Tower of Babel, as they are known - when geographically dispersed workers have to work together in order to reach corporate goals. An employee from Belgium may require input from an enterprise in Beirut, Mexico, or both. Without common ground communication will suffer. Employees will benefit from better language comprehension, which gives them more information that is useful for making informed decisions. Nestle, the Swiss food giant, experienced significant efficiency gains in hiring and purchasing due to its adoption of English as a company norm.

M&A integration across national boundaries.

Negotiations about a merger or acquisition can be complicated enough if everyone speaks the same languages. Even in simple e mail exchanges, subtleties can easily be lost when people don't speak the exact same language. Cross-cultural integration is notoriously difficult. Aventis was the fifth largest pharmaceutical company in the world, and the merger of France's Rhone Poulenc and Germany's Hoechst was completed in 1998. Aventis was also the fifth largest global pharmaceutical company. Aventis's English language operation over French and German was done to avoid any misunderstandings. There is also the possibility of branding. Merloni was an unknown mid-size Italian appliance maker in the 1990s. It adopted English to improve its international image. Merloni also acquired British and Russian businesses.

English is the fastest-spreading language of human history. It's spoken at a usable level by approximately 1.75 billion people around the world, that's roughly one in four.

How to make English-Language Policy Work

It is possible for one-language policies to have negative effects on efficiency. Rakuten's research, as well as a study I did with Pamela Hinds and Catherine Cramton from George Mason University in a company I will call GlobalTech and a FrenchCo study, reveal the potential costs of global English-language rules. Although proper rollout can mitigate the risks, there are still risks. However, even well-thought out plans can be hampered by pitfalls. These are some of the most frequent.

Change comes as a shock.

It is impossible to avoid the psychological impact on employees when the proposed change becomes a reality, no matter how much you prepare and warn. Marie (all names in this article are hidden except for Mikitani or Ito) was delighted to hear about FrenchCo’s English-only policy. After communicating in English for some time with non-French colleagues, she saw the new policy as a sign that the company was growing internationally. This was until she attended a meeting that is normally held in French. "I did not realize that the first meeting in English would be the one after the rule was issued. Marie admits it was shocking. Marie recalls that she was full of energy and enthusiasm when she entered the meeting until she noticed the translator headsets.

She said, "They're humiliating." "I felt more like an outsider at my company than a participant."

Will Mandarin Be Next?

An English-only policy is not the best idea considering the Chinese economy's size and growth. Is it possible that Mandarin could replace English as the global business language? It's possible, though unlikely. There are two main reasons.

First, English is a vastly superior nation. China will not be able to replicate Britain's colonial past. Since the 16th century, many parts of the globe have been using English since the British Empire. American and British charities have continued to spread English long before corporations adopted it.

Second, Mandarin is difficult to learn in large parts of the globe. It is much easier to pick up "broken English", than "broken Mandarin". Mandarin (or any language spoken in large numbers) is a distinct advantage. Mandarin isn't an option for a one language policy at the moment.

It is difficult to get compliance.

GlobalTech had to deal with a different problem because of an English mandate. GlobalTech was headquartered in Germany but had numerous subsidiaries all over the globe. Hans, a customer service representative, was called by his boss in a panic when the software glitch caused a multimillion-dollar financial service operation to stop. GlobalTech and the customer were in serious trouble. Hans quickly called GlobalTech's technical department in India. The team was unable, however, to resolve the problem. All communications regarding the problem were in German despite an English-only policy two years prior that required all internal communications (meetings and e-mails as well as documents and phone calls) to be in English. While Hans waited to have documents translated, the crisis continued. Two years later, the adoption process was still dragging.

Self-confidence erodes.

It can be difficult for non-native speakers to communicate in English and feel diminished by the company, regardless of how fluent they are. FrenchCo employee says, "The hardest thing is to have the humility to acknowledge that one’s value as a native English speaker overshadows one’s real value." "The company didn't ask us to learn foreign languages or give us the opportunity to," he says. "It is hard to accept the disqualification." Employees with one-language policies are often concerned that only those who have strong English skills will be considered for the top jobs, regardless of their content expertise.

My colleagues and I interviewed 164 GlobalTech employees two years after GlobalTech implemented its English-only policy. We found that nearly 70% of the employees still had frustrations with it. FrenchCo had 56% and 42% medium-fluency English speakers, respectively. They also reported concerns about job prospects due to their low English proficiency. This is common when companies announce new policies and offer language classes, rather than implementing the change in a systematic manner. It is important to note that employees tend to underestimate their own abilities and underestimate the difficulties of fluency development. (See the sidebar "Gauging fluency.")

Fluency Assessment

Progressing from beginner level to advanced--which greatly improves an employee's ability to communicate--involves mastering around 3,500 words. It's much simpler than adding 10,000 words to make the transition from advanced to native speaker. However, the payoff is lower.

The lack of job security is alarming.

While fluency is achievable for most people, the truth is that employees' job requirements can change quickly when they adopt an English-only policy. It can be hard to swallow, especially for high performers. Mikitani of Rakuten was blunt with his employees. He made it clear that he would demote those who couldn't improve their English proficiency.

Employees resist.

It is common for non-native speakers of English to choose their own language over English. This is because it is easier and faster to hold meetings in their mother tongue. Others might take more drastic measures to avoid using English, such holding meetings at inappropriate times. An example is when employees from Asia schedule a meeting in the middle of the evening in England. Non-native speakers can shift their anxiety to native speakers and lose power.

FrenchCo employees reported that they quit contributing to common discourse because they were concerned that their language skills would be criticized and could have negative career consequences. According to a FrenchCo HR manager, "They are afraid of making mistakes" and "so they will not speak at all."

Documents that are supposed be written in English might be written in another language, such as Hans at GlobalTech's experience. GlobalTech employees note that it is too difficult to write English, so they don't try. "And then there is no documentation at all."

Performance is compromised

When employees stop participating as a group, the bottom line suffers. When participation drops, processes collapse. Companies miss out potential new ideas that might have been generated at meetings. People do not report costly mistakes or offer comments about errors or questionable decisions. GlobalTech's Indian branch explained to one engineer that his ability was cut off when meetings were converted into German. He lost important information--particularly in side exchanges--despite receiving meeting notes afterward. Many times, these quick asides provided important context information, background analyses or hypotheses about the root causes of a particular problem. He was not present at the meetings and did not learn anything from the problem solving discussions.