Read the full script of Module 9, Episode 6 of the Global Growth Master Class below. Want to get certified on global expansion? Simply click here to access the complete course today.

Core values are an important vehicle for focusing the team and channeling efforts, not discounting local culture and forcing something as the only way (the “company way”). The Rakuten team found this in their expansion in the UK. Offering a good illustration of TRUST BUILDING and ALIGNMENT. 

When expanding into new markets, it's essential to respect LOCAL culture while still fostering a SHARED  set of core values that can serve as a focus for the team's efforts. This was a lesson learned by Rakuten, an e-commerce company based in Japan, during their overseas expansion. 

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Initially, they acquired a European company and imposed the COMPANY way of doing things without considering the LOCAL team's knowledge of the market, insisting that the Rakuten way was the best and only path to success. 

The team at HQ didn’t take a step back to build trust or seek ways to capitalize on the acquired team’s local market knowledge to build more traction in the country. HQ did not offer ways for the local team to influence the local go-to-market strategy through sharing key insights, instead focusing the team on speed and execution of the plan HQ established.

This resulted in SLOW growth and LOW morale, as the local team felt their input was not valued

Looking to bridge the gap, Seichu Masatada Kobayashi, Rakuten’s co-founder and head of the region at the time (now Chief Well-Being Officer), met with the local team face-to-face and asked them to write down all of their former company’s core values and core values in their LOCAL BUSINESS CULTURE. He then put up a poster on the wall with RAKUTEN'S core values and they discussed the similarities between them, showing how they were linked. 

This led to a better understanding of the SIMILARITIES and improved the results AND morale. Once the core values were ALIGNED, the local team was able to achieve greater market penetration. 

The local team started to gain momentum and achieve greater market penetration once HQ built trust with them after ensuring core value alignment. Finding the right balance of autonomy with local teams helps HQ manage a growing global footprint, and it also helps expansion efforts progress from market entry to market growth. If a local team is given the latitude to adapt the business and find the right model for the market, they will be more successful, and faster.

Moreover, this case study is a great example of how to connect company culture to local culture and how to drive (which is part of the core value universalization process), and drive the organization toward that 80/20 rule of integrating cultures - keeping 80% of company culture the same, but finding a way to allow for some localization to better engage and empower the local team.

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 9, Episode 7 of the Global Growth Master Class.