Read the full script of Module 10, Episode 9 of the Global Growth Master Class below. Want to get certified on global expansion? Simply click here to access the complete course today.

Rakuten’s Feedback Loops through Asakais

Rakuten’s CEO and Founder, Hiroshi Mikitani practices many of the Global Class management module practices outlined in this module. One of the effective practices he implemented is what the company labels as “weekly Asakai’s” - a Monday morning meeting where important company news is shared, best practices are highlighted, and core values are reinforced. 

The effectiveness of these Asakais is not just in the content provided, but also in HOW Mikitani-san delivers them. First, all of the meetings are in English - the company went through what was internally referred to as an “Englishization” process where all communications began to happen in the more globally known language, instead of Japanese, even at HQ in Tokyo. 

In these meetings, Mikitani-san makes himself available to the entire organization every Monday with no exception aside from important holidays, showing that he, as a leader, is committed to leading a global company. In these meetings, a lot of the time is spent updating the broader organization on key strategic decisions, while also explaining the WHY behind how they were made, tying these decisions back to Rakuten’s core values and culture and hence, RE-emphasizing them.

Now, as the internationally minded leader that he is, he understands that not everyone can attend the live recording of this session so he intentionally has built a systematic approach to sharing these important virtual town halls. Once the session has concluded, he and his team share the Asakai across the global footprint first starting with Asia (shared 3 hours later), Europe (shared 6 hours later) and finally the American region (shared 9 hours later). 

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By implementing this structure, it allows for all teams to have a chance to learn from what’s happening in the APAC region, accommodating everyone’s time zones. But, it doesn’t end there… After HQ has distributed this content, the rest of the regions hold their own Asakai sharing their local updates with the other regional offices and back to the HQ (similar to the Small Hands concept we discussed in an earlier module).

This practice is important because it breaks down barriers, ensures strong communication, and fosters feedback loops. Let’s reflect for a moment on how this example ties into the Global Class Management Model. 

Mikitani-san shares vision (left side of the roadway) and re-enforces core values while also explaining key strategic decisions to the broader organization (making the culture cable stronger as this is communicated repeatedly to the organization). Then, the regional offices take a similar approach also sharing with HQ and other regional offices, allowing for other parts of the organization to understand local decision-making and strategy implementation (the right side of the roadway). 

With both ends of the organization actively sharing insights and learnings, there are constant feedback loops (the middle of the roadway) happening leading to strong trust points (the vertical cables), allowing for a leader like Mikitani-san to build momentum and support scale in the organization through this established process (the momentum builders left tower).

Starbucks Becoming a Market Leader in China

Starbucks’s growth in China also offers a window into the power of maintaining a culture of two-way innovation, communication, and leveraging mechanisms to share and implement best practices from local markets. This is why the company has been so successful in China, while many other companies have failed.

To date, the company has launched 6,000 stores in 230 cities in China and they plan to increase stores by 50%, opening a store every 9 hours over the coming years. How did they do this? They localized to fit the expectations of Chinese consumers and adapted to the local culture by leveraging two-way innovation to get insights from the local market to change both their go-to-market and operating models to find product-market fit and eventually company-market fit. 

Here is more detail on what they did: Starbucks:

- Focused on Chinese cultural values like family, community & status

- Hosted family forums where employees AND family members could learn about Starbucks’ strategic initiatives

- Launched China Parent Care Program, a critical illness insurance program for employees AND parents

- Reformatted stores to fit local drinking culture (open layout to accommodate large groups) 

- Adapted product portfolio to include more tea & food offerings AND even regionalized it 

- Leveraged existing (& popular) online channels to target Chinese consumers 

- Built a location strategy that matched the product positioning strategy, with stores placed in financial districts, urban centers, and tourist attractions

- Aligned with the government's strategic agenda AND committed to train 30,000 farmers 

- Collaborated with local vendors, including a license agreement with ✓ Beijing Mei Da Coffee Co (wholesaler distributor to hotels and restaurants.)

Today, Starbucks has made China a strong market with:

- 36.4% market share in the coffee and tea shop market

- 15% of Starbucks' net revenue comes from China  

- 100% of stores are operated by Starbucks in China vs only 59% in the US

- 90%+ loyalty members in China are actively engaged via the app

What did Starbucks learn from China?

Not only did Starbucks benefit from significant growth in China, but lessons from China were also “imported” to global markets (two-way innovation as described throughout the course). They also implemented:

- Integration of online & offline offerings had its genesis in China, and then was implemented in other countries 

- Loyalty programs were rolled out globally 

- Online delivery was proven successful and later launched in other markets

Both of these cases highlight a great example of HOW not just cultural practices, but specific management practices and establishing Momentum Builders (the processes and structures discussed in the last module) can be a catalyst for global growth like it has been at Rakuten and Starbucks.

NOTE: Don't miss out on the next episode! If you want to continue learning about global expansion strategies and dive deeper into the course material, simply click here to access Module 10, Episode 10 of the Global Growth Master Class.