Alibaba

Executive Perspectives 企业家视野专栏

August 2013 www.IACMR.org

Company Culture and Values Values Are the Lifelines of Alibaba

—An interview with Jack Ma, Founder and Executive Chairman of Alibaba Group Xiao-Ping Chen, University of Washington Washington

About Alibaba Group Alibaba Group was founded in 1999 by 18 people led by Jack Ma, a former English teacher from Hangzhou, China who has aspired to help make the Internet accessible, trustworthy and beneficial for everyone. Since its inception, it has developed leading businesses in consumer e-commerce, online payment, business-to-business marketplaces and cloud computing, reaching Internet users in i n more than 240 countries and regions. Alibaba Group consists of 25 business units and is focused on fostering the development of an open, collaborative and prosperous e-commerce ecosystem. The privately held Alibaba Group, including its afliated entities, employs some 24,000 people around the world and has more than 70 ofces in Greater China, India, the United Kingdom and the United States. Alibaba has established a strong company culture based on a shared mission, vision and value system as the cornerstone of the company and its subsidiaries. They respect the spirit of entrepreneurship, innovation, and focus on meeting the needs of their customers.

About Jack Ma Executive Chairman, Alibaba Group Jack Ma is the lead founder of Alibaba Group. After the company’s debut in 1999, he served as Group chairman and chief executive officer for more than a decade, with responsibility for overall strategy and focus. On May 10, 2013, he stepped down as chief executive ofcer but remains executive chairman and continues to shape the Group's business strategy and management development. Jack Ma and Alibaba Group uphold a mission “To Make it Easy to do Business Anywhere” and are committed to helping small and medium-sized businesses to develop and grow, as well as provide consumers with an enjoyable and convenient online shopping experience. “Live seriously and work happily” is the philosophy that Jack Ma and his team live by. Jack Ma is the Executive Chairman of Alibaba Group and also serves as chair of The Nature Conservancy’s Conservancy’s (TNC) China board of directors, and is a member of TNC’s TNC’s global board of directors. Jack Ma holds a bachelor's degree in English from Hangzhou Teacher's Teacher's Institute and like every graduate, believes his alma mater is the best school in the world.

© International Association for Chinese Management Research

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Executive Perspectives


企业家视野专栏

In February 2013, Yabuli was still covered

learn from America; you learn from Japan. But you

with white snow, quiet and beautiful. In the 13th

learn only their operations, not their minds. So what

Annual Conference of the China Entrepreneurs

is an enterprise’s mind? You may find me a little

Forum, however, heated discussions were going on

eccentric when talking about Taoism, Buddhism, and

about China’s future economy and reform. During

Confucianism, and mixing them. Indeed, I observe

the conference break, along with Professor Zhang

them all and harvest meaning from China’s ancient

Weiying, I interviewed Jack Ma, CEO of Alibaba

culture, especially from the Tai Chi philosophy.

Group.

Q

Q

Xiao-Ping Chen: Hi, Jack, it has been a long time since I last saw you at the Academy of Management

Xiao-Ping Chen: Would you expand more about the particular Tai Chi doctrines that you feel especially meaningful?

meeting in Hawaii. I’m so glad to meet you here in Yabuli. First, would you please describe your

Jack Ma: In fact, Tai Chi’s view on

management style, philosophy, and perspective?

accommodation and transformation, yin and yang,

What experience in your life profoundly inuenced

ebb and flow, all thread through our company’s

your leadership style and philosophy? It’s a broad

management philosophy. A dialectic view on

topic, and we welcome your boundless answers.

accommodation and transformation includes closely related concepts. The same goes with education and

Jack Ma: Personally, I feel that multiple

nurturing. Education is the school’s responsibility

management perspectives have emerged in China

and nurturing is the family’s job. We call it

over the past 30 years, but that there have been

transformation by nurturing. And that’s what we

no significant breakthroughs. In my view, nations

really want. I have thought about it for the last four

and corporations develop in a similar manner. For

years, and gradually formed my own perspectives

example, the U.S. political system and management

about our values and value system, the concept of

system are based on similar Christian beliefs. If you

bel ief and rev ere nce . Bel ief is to be grateful for

closely observe American companies’ operational

today and yesterday. Reverence is awe and respect

systems, you will find interesting similarities with

regarding tomorrow and the unknown. Weaving

people’s religious beliefs there. Likewise, Japan’s

belief and reverence into our culture would form the

micro-management practices reflect their cultural

core values for the basic design of all management

roots. In China however, because of the rapid

systems.

economic growth in the past 30 years, and the lack of religious beliefs in this country, our management follows a less consistent pattern. We must take scraps

“To see people surpass me” is my biggest wish

from here and there, and nothing is our own. Cultural beliefs form the root of culture, which serves as the

Jack Ma: I feel that my thoughts about

philosophy of management. I have been thinking

management have something to do with my

about this question in the past few years. If Alibaba

teaching experiences. I was not the best teacher, but

desires sustainable development, we must have a

I certainly was a good teacher. I knew I couldn’t

management philosophy. But if we don’t have a

be the best in China, so I decided to step into the

powerful and persistent corporate culture as the root,

business world. I applied the same rules I followed

we cannot create the philosophy and thinking. You

as a teacher in running a business. That is, teachers


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always wish their students to surpass them. That is

Tai Chi, Taoism, and Buddhism. I never talked about

the fundamental difference between me and other

this directly, but they are the source and nutrition of

entrepreneurs. Most business people, especially those

our management philosophy.

profes sional managers, fear anyone overst epping

In addition, my experience in education

them. I’m the opposite. When I find talented

makes me interested in hiring, training, nurturing,

workers, I want to train them to replace me as soon

and motivating talents. That’s the fun of my job. I

as possible. That’s the characteristic of a teacher.

worked as a class teacher before, and my job was

Teachers always want the best for their students. If

about three things: recruiting good students; “xing”

the student becomes a professor, or a mayor, or a

them if they were not good enough, or letting them

big boss, teachers are as proud as if the achievement

go. My English learning experience helped me to

were their own. No teachers want their students

understand Western people’s system, ways, methods

to fail. So I never steal the spotlight from newly

and techniques. I think they are quite good at

hired young people. If someone warns me about an

methodology, and I embrace their managerial theory

employee who is trying to overstep me, I reply that

and principles. But it’s hard for us to adopt all of

I’m a teacher and that’s the way it should be.

their ways because our and their cultural foundations

Another special experience is the way I studied

are quite different. Therefore I use Chinese culture

English. I began studying English when I was very

as a base and adopt Western principles. I let young

young, not just the language but more about the

pe op le , em pl oy ee s an d gr ou nd -l ev el ma na ge rs

culture. I started chatting with foreigners around

decide how to run the company rather than doing that

West Lake when I was 13, taking them sightseeing

myself. The traditional Chinese boss likes to control

while practicing my oral English.

the company’s operations, but that would make your staff rely on you and never learn how to handle

Q

Xiao-Ping Chen: You were so brave! I was in Hangzhou at that time, but never had the guts to talk

things in their own way. What a real leader should

with a foreigner in English!

and principles and be the source of your company’s

do, instead, is to give your team overall guidance culture. It’s just impossible for me to construct the culture myself.

Jack Ma: I hung outside Shangri-La Hotel for nine years, getting up at 5 am daily and walking to the Shangri-La. During those nine years, I hardly

The leader carries responsibility for the future

skipped a single day! In talking with foreigners, I realized what they told me was quite different

Jack Ma: As a teacher, I know how to use

from what I had learned in school or heard from

available resources. When I stroll in the rich

my parents. I started to think twice before believing

Chinese cultural heritage, I feel that Confucianism,

whatever others told me. That experience made

Buddhism, and Taoism are still powerful today. In

me more open-minded and better at understanding

Taoism, the best leadership is not leading at all. What

Western concepts. I disapprove of Chinese people

is leadership anyway? I think it requires sacricing

who say that Westerners are no good in everything

today for the future; the person who can sacrifice

they do. How about ourselves? What about our

today to win tomorrow is a real leader.

own strengths and weaknesses? Through endless thinking, I have groomed, little by little, my own management philosophy in the company, based on


Q

Xiao-Ping Chen: Your point of view is interesting. Why would you think this way? 4




Jack Ma: You can tell that I do not like

possibly use them to make good judgments? What

profes si onal mana gers ; they tend to fo cus only

should the government do? In my view, it should

on short-term results. I explained that to every

not directly control economic policy, but decide on

professional manager in Alibaba the first day they

ways that help shape the economy and solutions to

came to work. They understand my view and many

problems. For instance, instead of directly interfering

of them now identify with me.

with the economy today, government should devise

I also worked hard to transform professional

policies that provide a solution when problems occur

managers, but later I found that the more successful

tomorrow. Likewise, companies must prepare for the

they were, the harder it was to persuade them to

future. Speaking in the Taoist language, you must

change. What is a good leader? A good leader

have a principle to guide you and go step by step. I

must be equipped with the excellent attributes of a

think Alibaba is in its current position because we

professional manager. At the same time, the leader

understand and follow our moral obligation.

must be reliable, able to bear responsibilities not only for today but for tomorrow and the future. Frankly, professional managers and politicians are similar to me. They make easy promises but they can’t solve

A culture of gratefulness, sharing and openness: live seriously and work happily

tomorrow’s problems. We habitually think about how to solve yesterday’s problems, but it is more important to consider what we must do today to

Q

Xiao-Ping Chen: What exactly is the moral obligation you follow?

solve tomorrow’s problems. The Taoist perspective Jack Ma: I often feel that people like me are not

calls for walking your path naturally by following your understanding of the future rather than focusing

supposed to be successful,

only on past and present problems. That’s why I used to say that I don’t listen

Q

Xiao-Ping Chen: Why?

to economists. I may have expressed myself in an extreme or simple way in order to catch the attention

Jack Ma: Because we lack the necessary

of those who have not thought about it and inspire

elements for success in a normal sense. We have no

them to do so. I remember right before the nancial

resources and no rich daddy or uncle. I used to tell

crisis, I met with a number of entrepreneurs. They

my colleagues that we were like a lucky person who

were all listening to economists' predictions about

catches a gold bar falling from the sky. We had two

the future economy and the government’s next

choices, to try our luck and look for another gold bar

actions. I said: “Ducks know rst when the river gets

or to hide it. The first choice isn’t reliable because

warm in spring. You guys are entrepreneurs, ghting

it’s like standing by a stump waiting for another hare

on the frontiers of the economy. If you don’t know

to crash into the trunk and kill itself. The second

when the water gets hot, what has gone wrong in

choice is insecure because someone might steal the

your production chain, or with your customers, what

gold. Instead, it’s better to share it with others, show

is the point of sitting here listening to economists’

your gratitude for what you have, and everyone will

forecasts?” Economic research covers only models

be happy. The core of Taoism is letting things take

and problems from the past.

their own course; the core of Buddhism is emptiness,

Second, economists draw their conclusions from

the same inheritance as Taoism. What does it mean

a tremendous amount of data, but in China, many

to let things take their own course? It means to stride

statistics are not completely accurate. How can you

ahead even if we know the result, for the process is


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what we really appreciate. After all, everybody is

meeting two years ago and found that many meeting

going to die, and our nal home is the cemetery. If

rooms are named after Jin Yong’s martial arts novels.

you can see that as your destination through life, you

Why?

will not fuss over trivialities. Confucianism is the Chinese way of management: let the king be a king,

Jack Ma: Jin Yong’s martial arts novels

the minister a minister, the father a father and the son

are the most down-to-earth way of explaining

a son; while Western Christianity has developed into

Confucianism, Buddhism, and Taoism. They cherish

a more open system up to the present. We adopted

br ot her hoo d, mo ra li ty, cou ra ge , em ot io n, and

what they have in common and implemented it in

conscience. I have said in the company numerous

our management model: gratefulness, sharing, and

times that it is only a matter of time for Alibaba to

openness.

become the most protable company in China; what

I gave a speech at Harvard in 2002. After

I’m worried most is that Alibaba becomes merely a

my talk, a CEO from a foreign company said that

money-making business without any human touch. I

I was a mad man. He said he had been in China

want our company to be like a person, with feelings,

for many years, and didn’t believe that my way of

consciousness, and a code of conduct. Alibaba is a

managing a company would work. I invited him to

service company, not a high-tech one. The higher the

visit Alibaba. After a three-day stay, he said “Now

technology, the further a company will move away

I understand. Here you have 100 mad men just like

from consumers. I cherish loyalty and brotherhood.

you.” I agreed. People in a madhouse never admit

Jin Yong’s novels reect the philosophy of Taoism,

they are crazy. They believe the outsiders are. That’s

Buddhism, and Confucianism, and yet young people

why people here in Alibaba are united. Someone

and our clients comprehend the stories. When we

said it’s impossible to be unable to nd 1000 people

talk about the Bright Summit and Xiaoyao Tower

who think as he does among 1.3 billion people; if

(“Xiaoyao” means “wander about at leisure”), people

he did, he would train them to be us. And that’s why

understand and it makes them happy. One principle I

we have so many similarly crazy people. Alibaba’s

advocate in the company that is inspired by Taoism,

culture was developed not through my own efforts,

Buddhism and Confucianism is “live seriously and

but through collective hard work. Our culture is the

work happily.”

result of cherishing the same ideals, following the same path, and unifying the same type of people. If you want to copy us, you have to first copy our

Q

Xiao-Ping Chen: People often say “work seriously and live happily”. Why did you reverse it?

culture, confirm your cultural foundation, and hire pe ople wh o sh ar e your id ea s. Ma ny co mp anie s

Jack Ma: Because if you don’t live seriously,

nowadays want to compete with Alibaba, and I

life won't be serious with you. If you are unhappy

say, “Hey, brother, you don’t know what you are

at work, you cannot be innovative. Likewise, being

talking about.” I have spent 10 years to shape this

serious at work doesn’t guarantee that you will be

company’s development. These are the people we

creative. Isn’t it better for one to have fun at work

recruited, and this is our way of training them. This

and feel free to come and go anytime as long as they

whole e-commerce business model is only one form

nish their work? If you are unhappy with your job,

of our efforts, and there is no way you can compete

please go, it’s not your mistake. “Working seriously

with us.

and living happily” is just nonsense. Others talk about balancing work and life.

Q

Xiao-Ping Chen: I went to your company for a


That’s also impossible! About four years ago, 6




someone suggested that I give a lecture to teach our staff how to separate life from work because they

Q

Xiao-Ping Chen: Well, that’s because you have cultivated talented workers.

found it too difcult to do so. I talked for about 30 minutes and by the end of the speech, I realized that

Jack Ma: If you don’t give employees

I was talking nonsense, meaningless words, for I

opportunities, why train them in the first place?

never separated my life from my work.

I asked my colleagues whether they want their 48-year-old boss to be brain-crushed and repeat each

Q

Xiao-Ping Chen: That’s my basic view too. Life and work are not against each other but they are

simple message ve times. They dare not overthrow me, so I must overthrow myself rst.

inseparable.

I tell my staff I want them to appreciate that their founder knows how to enjoy and experience

Jack Ma: I now want to explain why I’m going to step down as CEO on May 10.

life. On the other hand, picking a successor is like having a baby. You must be young and healthy to have a baby, right? I’m now 48, still with a clear

Q

Xiao-Ping Chen: Is that because you want to be Chairman only?

mind, and it’s now the right and best time to look for a successor. If I wait until I’m in my 60s or 70s, with a muddy mind and twisted ideas, I will for

Jack Ma: In China, stepping down as CEO

sure deliver a sick baby. No person can kidnap my

simply means you are giving up control of the

company, and I won’t allow the company to kidnap

company. In an Internet company, stepping down

people either. So I decided to step down.

as CEO is a difficult challenge. People may think that the chairman supervises the CEO, but that

Q

is completely not the case. If a chairman sticks

Xiao-Ping Chen: It’s uncommon in the business world that a 48-year-old CEO retires. Your comments

to the traditional mindset of a Chinese boss, he

and action are quite daring.

can never handle his relationship with the CEO well. A chairman has his business to do, that

Jack Ma: Yes, I speak boldly, and that’s my

is to decouple from the company, like a rocket

personali ty. If one day I tal k plainl y and cal mly,

shrugging off its booster on its way into space.

then something must be wrong with me. I say

The rocket still ascends rapidly, but its energy no

what I think and I do what I say. If one day I do

longer comes from the original booster. This is

something different from yesterday, then I admit that

the message I want to convey: before I was 48,

I was wrong but at the time I thought it was right.

my job was my life; after 48, my life becomes

My actions match my thoughts; I never speak one

my job. I want to tell young people that I can

way and think another. If not, that would cause my

now treat my life as my job. If you work hard

employees and the whole society to distrust me.

enough, someday you can do the same. On the

When you realize you have made a mistake,

other hand, if I still have to work when I am 80,

there are two possibilities: one is hit the wall and

well, brother, you’d better not step in this river.

keep hitting; the other is to turn back. And I started

Moreover, I want to let people know that I, Jack

to bruise my ideas while hitting the wall. Of course,

Ma, at age 48, see that many young people have

it might be dangerous for coming up an idea, because

surpassed me. This is an undeniable fact. If this

they are based on experiences from the past 10 years.

hasn’t happened, my past 10 years of work would

Are they still applicable in the future? I’m not so

have been in vain.

sure. So I decided to give younger people a chance.


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However, their values must match with our long-

the board will say: hey, this guy is not good enough,

term core concepts. Obviously, I’m not going to give

let’s try another one. The investors can never love

that role to a professional manager, but I will pass

the company more than you do. They point fingers

the torch to the one who holds rmly to our values,

left and right and this could potentially damage

and is stronger than us.

the whole ecosystem of the company. What if you invited a wolf who might think it is right to eat all

The successor must come from within the company

the sheep? That’s the only way he can prove himself, and that’s one of the reasons why nine of ten mergers and acquisitions fail. We are solving the problems at

Q

Xiao-Ping Chen: Do you mean that the CEO who replaces you must be trained and cultivated

the system level.

within your company?

Q

Xiao-Ping Chen: Great, the following question is closely related to what you said. From founding

Jack Ma: Of course. We already stated it in

Alibaba, to becoming the CEO, to becoming CEO

the corporate constitution: never allow outsiders

and chairman, and now stepping down as CEO,

to become CEO. Even if Alibaba is at the edge of

you have taken different roles in the company. At

bankruptcy, airborne rescue troops are forbidden.

different times, how have you positioned yourself in

The new guy must have worked in the company for

the company’s management? What circumstances

at least five years before the corporate constitution

would make you come forward or step aside?

allows him to be a leader.

Q

Weiying Zhang: Did you really make that decision?

The time to repair a roof is when the sun is shining Jack Ma: If the company is in danger, I will

Jack Ma: Yes! We wrote it into the corporate

always throw myself in and try my best to help.

constitution: no airborne guy, never ever. You can

This is my responsibility. When the company is

join the company at age 30 and after 5 years, you

close to success or when I see that the company is

can still be promoted…The president of a country

already successful then it’s time for me to leave.

must be born in the country or have lived there

Furthermore, when the company is at its best time, it

for decades. If you don’t love this country, you

is time to start reforming because the time to repair

can only be a problem solver but not a leader, so

a roof is when the sun is shining. You cannot x the

what would I need you for? What I need is a leader

roof when it is raining because you might slip and

for the company, am I right? Chinese traditional

die. Fix the roof on a sunny day; stay at home and

medicine makes sense in this way: cure a person,

relax on a rainy day: that’s corporate responsibility.

not a disease. If the disease is cured but the person

Let others set off celebratory reworks.

dies, what is gained? You may cure one disease, but what about the others? I want the person to be cured, and I want to have someone who really loves

Q

Xiao-Ping Chen: Let others to celebrate and you leave quietly.

the company, understands it, and is willing to bear the responsibilities. If you can’t nd this guy, that’s

Jack Ma: Yes. A leader should let others set off

only because you didn’t prioritize this requirement

the celebratory reworks. It cannot be done by him

enough. If we didn’t write it into our constitution,

and must be done by a stronger person. The success


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of a CEO should be determined by the number of person he trained that can surpass him.

CEOs must have vision, breadth of mind, and strength

Q

Xiao-Ping Chen: Now you have decided to step down on May 10th, does it imply that you have ①

successfully found your successor ?

Jack Ma: Right, and that’s the course the potential CEO must take. If you were a general fighting on the frontier and one day I called you to withdraw from the burning battlefield to work

Jack Ma: Of course. I have plenty. I’m now

backstage for three years, it would be like putting

persuading them to see the challenges after catching

you into cold storage at your peak. And when you

a golden brick from the sky as I did before. I spent

are at your lowest point, I suddenly inform you that

more than 10 years, especially the first few years,

you now can go somewhere to take an important

trying to give back to society gratefully. The new

role. I trained the most sturdy and enduring people.

CEO should also be grateful and willing to share by

If two guys are not a match with each other, I can

returning the wealth to society. A CEO must sacrice

assign them to different jobs because there are full of

for others and do a better job than others.

opportunities and they can each spread their wings. In other words, the emperor who killed his brother

Q

Weiying Zhang: Is it possible that if you choose one man on your team to be CEO, the others who

to secure his position was stupid. That’s not the

were not chosen may take their teams and leave?

I can’t get their positioning right, that’s my problem,

Taoist way and denitely not Buddhist way either. If not theirs. I tried to figure out what happens if the

Jack Ma: It is possible. But I told them already

two confront each other before I solve the problem.

that I would not be like Jack Welch, as his method

Is he sturdy and enduring, does he have a breadth

caused too much of a struggle. A scenario in which I

of mind? I have three requisites for a CEO: vision,

choose one person and others will leave is not going

br ea dt h of mi nd , an d st re ng th . Co mp ar ed wi th

to happen here. Long ago I already drove out those

others, you need to have better long term vision and

I felt would not be good partners. I'm not going to

a broader heart to endure unfairness. The heart gets

cause trouble for the person I pick. I will fix the

broader by experiencing injustice, and people get

trouble myself. However, I might choose a good

tougher only by suffering unjust treatment again and

partner who will benet you but might not be quite

again. Strength is endurance. If a guy returns smiling

compatible with you. If you can’t collaborate, then

after rounds of being beaten up, then he is the one I

you can’t be a great leader. In the past three years

want to be my successor.

while I was training potential successors, I found their weaknesses and would make them to work hard to overcome their weaknesses.

Q

Xiao-Ping Chen: How many men in your company have been beaten up by you like this?

Q

Xiao-Ping Chen: So you were training their endurance.

Jack Ma: Oh, a lot. It’s not like my Dad beating me when I was a child; I did that on purpose.

① Jonathan Lu Zhaoxi was appointed CEO of Alibaba Group


9




Q

Xiao-Ping Chen: To train them.

Q

Xiao-Ping Chen: Right, the key is that his liver fails.

Jack Ma: Right. As a teacher, how can you not criticize people, not discipline them, and not

Jack Ma: It’s the same as growing a business.

encourage them? If he is an excellent leader, then he

What’s the essence of strength and speed? It’s all

should know that my deeds are from my true love.

about having great core values. Such competition will also become a world pattern in the future.

Q

Xiao-Ping Chen: People from different levels may have different understandings about what you do.

Q

Xiao-Ping Chen: Well said, but I have a question. You said that to cultivate a talent, to train him, you sometimes punish him intentionally by totally

Jack Ma: Right, when I criticize and punish

ignoring him, and that he may have felt the treatment

someone, this person will feel pain and anguish,

was unjustied. How did you tell him that you were

will curse me, will think it’s impossible to work for

treating him that way for his own good? Did you tell

me for a long term, and will feel terribly mistreated.

him openly or did he gure it out on his own?

But this training system is cultural, and it actually fostered today’s system of competition. I can tell that there is seldom such a system among Chinese

Jack Ma: I would never tell him that I did so as to train him on purpose.

Internet companies. This morning in the conference, we were discussing that competition in China is

Q

actually a competition for talents, and competition

Xiao-Ping Chen: Well, not directly of course. So how do you do it? I mean to give him a hint that it’s

for talents is in turn a competition of education,

for his own good, when he feels down and upset?

and that is related to the education reform. The reform should not start at colleges, but at elementary

Jack Ma: A narrow-minded person would feel

schools. Good or bad national policy depends not

that he was set up, by me or someone else. I would

on the quality of colleges but on the quality of

let him be. If he were too narrow-minded to bear the

elementary schools. Only good elementary schools

injustice, I would totally ignore him; let him dry up

can build a solid base for Chinese children. When

for at least 3 months.

I was young, a good English teacher told me I was doing well and then I did better and better. But a bad math teacher totally killed my interest in

Q

Xiao-Ping Chen: What happens if he can’t take it anymore?

mathematics. Without a good base, how can you compete with other companies and survive? So when people compete with me in e-commerce, I tell them that it’s only one of my

Jack Ma: He will come to see me. He will be mad for sure. It’s impossible for a narrow-minded person to take being treated so badly.

expressions. We may switch to the airline business, and we will still succeed. We tried nance, e-shops,

Q

Taobao Marketplace, Tmall, and now AliFinance is

Wei-Ying Zhang: There are in fact a lot of people who went through this kind of “suffering”, including

doing quite well too. These are only manifestations.

Liu Chuanzi and Yang Yuanqing of Lenovo.

A hepatitis patient may be yellow-faced, or totally worn out, but that is just a manifestation.


Jack Ma: Key point is that, if a person is

10



企业家视野专栏 lacking something, I will not pick on him; I never

be like a zoo of different animals with differen t

will. Because you can nd faults without searching

pe rs on al it ie s. If ev er yo ne is th e sa me wi th in a

for it. You can find many of my faults if you pick

company, then the company becomes a farm, raising

on me. You will always hit that wall. If something

a bunch of pigs or chickens. With different animals,

is wrong, I tell him so, and then I will watch his

a company can have a good ecosystem, and you must

attitude. If he admits his mistakes, then there is no

know how to deal with different people. Otherwise,

problem. I fear the most when he doesn’t admit to it,

you can’t deal with society and you can't get along

and then makes the same mistake tomorrow. I will

with your clients. A leader must suffer, endure, and

never place a victorious general in the most difcult

have vision to stand out compared with employees.

war; I will denitely choose someone who has been

I died thousands of times, and I will not fear another

defeated countless times but succeeded a few to ght

death. Young people can easily catch up with your

on the most critical battlefield, because his failures

skills, but courage is what makes a leader.

will make him more careful. A man who has never

At our last meeting in Taiwan, Dr. Morris

failed will fall hard when he does, then you will die

Chang (Zhang Zhongmo)2 discussed innovation.

miserable. If he is not open, easily discouraged, and

The first thing I said on stage was that Taiwan is

easily loses control, you should just let him be and

hopeless if people in their 70s and 80s are talking

ignore him after punishing him. After three months,

about innovation. You believe you are stronger than

if he still can’t dig himself out, you call him in and

young people? You’ve got to be kidding. No way

have a talk.

can old men be more creative than young people.

If he comes on his own initiative, you can tell

We should support young people in their innovative

after half an hour whether he has really changed or

efforts. They are more powerful than we are. So by

is just trying to please you. Talk with him, let him

retiring at 48 I show the Taiwanese how to do it. I

open up, breathe out all toxins. Some guys have

may not be as wealthy as Bill Gates, but I am retiring

broad minds; they treat this procedure as using face

earlier than he did. And I think this is what makes

to mop the floor, to actually gain dignity. There

me interesting, just kidding!

are some people I would always criticize in every meeting, because they are open minded and can take criticism. I will keep criticizing until they can’t

Corporate mission has to be aligned with social development

take it anymore. I not only treat the CEOs this way, but expect every department manager to have the

Q

same tolerance. I now structured the company into

Xiao-Ping Chen: You are a founder of a Chinese company where it places a lot of emphasis on

25 business units, with 25 young business leaders

building corporate culture. What is the ideal culture

each having 3-5 assistants. I have spent a lot of time

for Alibaba? How should it be accumulated and

building up this graduate class, so-called Feng Qing

sustained? Would you please give some detailed

Yang class. I spend lots of time each year to teach

examples?

them about the values of our corporate culture. Jack Ma: In the 21st century you must

Q

Xiao-Ping Chen: Continuing to progress in cultural concepts.

understand your mission and your reason for existence. In the past century, companies could prosper by simply grabbing one good opportunity.

Jack Ma: Of course, it’s not feasible to teach

Big companies today in the 21st century, you must

everyone in just one way. Everyone is different and

understand a theory: you must solve social problems

has a different personality. I hope my company can

be fo re so lv in g co rp or at e is su es . On ly th en ca n


11



the company last forever. Therefore, Alibaba has

organizational structure can be created, followed by

been hop ing to solve social probl ems, probl ems

talent recruitment. It is one coherent system. I did

of innovation, and employment issues. Alibaba is

not understand that in the past, but I have gained

no longer simply a company, but an ecosystem. I

more understanding over the years and have created

lost interest in making a company 5-6 years ago.

something systematic of my own. Today’s Alibaba is

The difference between me and economists and

not built by stitching pieces together, but by missions

management theorists is that they are making use of

and values. Our corporate culture can be s ummarized

their knowledge, but I use my actions to change the

with four simple words: openness, transparency,

world. I change things from the bottom up, I train

sharing, and responsibility. Those words correspond

people that are born in the ‘80s where they grew up

with my understanding of the Internet.

having access to the Internet, and when they think

The Internet has developed so rapidly because

this way on their rst day, the society will naturally

it is open, transparent, sharing, and assumes

be different.

responsibility. This is why I have to bring our corporate culture and Internet culture together,

Q

Xiao-Ping Chen: The key is to maintain a good corporate culture.

because if these two cultures are incompatible, it will have a very sad outcome. In my view, the Internet is our future. Some say that the Internet should become

Jack Ma: Yes, corporate culture should be

a national strategy. The national strategy shouldn’t

connected to societal values. That is to say, values

be Internet, but should be the market economy, and

and mission come before a corporate strategy

the spirit of entrepreneurship, sharing the same

can be formulated. After the strategy is laid out,

resources. Regardless of how we feel, the society


12




will become more open, transparent, responsible, and

love me, just respect me. It’s impossible to unify the

sharing. If your company has such a culture, it will

thoughts of many people, and even harder to unify

naturally get stronger, and this is why I would want

the opinions of more than 20,000 people. It’s enough

our company to achieve this culture. I personally

to unify their actions. Unifying action will lead to

believe that our company is the most open in China,

unifying minds.

at least in its strategy. I can always share my strategy with others.

We have a system that cannot go public yet. We have been testing it internally at the management

People say that Tencent won’t allow them to

level and not all employees may know about it

visit, Google and Amazon won’t allow us to visit.

yet. After 3-5 years, if the test is successful, I

But with us, we would welcome you to come visit

bel ieve we wil l have an ecosys tem tha t can help

our ofce whenever you want. What am I thinking?

tremendously in improving China’s economy and

Hypothetically, if you took my strategy and did a

innovation. Furthermore, this system should include

better job, then I would be at fault. Because that

our accumulated management experience. In the

would mean my culture, my vision, my mission, and

world of management, China has originated nothing;

my team are incompetent. What I do is systematic

indeed, we lack roots and systems. We have a mix, a

strategies, in this perspective, I will have to be open

hotpot that is not genuine cuisine.

and transparent. I wish all society to open up. We have opened up our intranet to the public for two

Morality is at the core of our culture

years. We are reconstructing it. When it’s done, anyone can nd out who is doing which project. You

Jack Ma: I believe we have inherited much

can all take a look but you cannot comment on our

value from our ancestors. Of course that doesn’t

webpage. You can comment somewhere else, but if

mean we refuse Western ways. They are more

everyone gives an opinion about our business, that

advanced than we are, so their knowledge is part of

would ruin everything.

the world management doctrine. I just offer food

We contributed a great deal of our revenue to a

for thought. After my retirement, I hope to make

fund for environment and water resource protection.

some valuable contributions to companies like ours.

We’ve been doing this for many years and this

SOEs talk about prohibiting the ring of employees.

amount is in the hundreds of millions. But how do

But what is the big deal if the biggest possible loss

we decide who gets to spend this money? Or how to

is to not be a chairman anymore? Sometimes we

spend this money? I cannot say that I’ve established a

invite people to come to teach, for example, about

democratic system, but we have elected 10-member

marketing. But if they teach us how to sell combs

out of 25,000 employees and formed a committee to

to monks (Chinese monks all shave their heads), I

be responsible for this fund. Each employee would

won’t ask them back because they are teaching us

be his own campaign team, to exp lai n his ideas ,

to be liars: monks don’t need combs. We are talking

understanding, plan, and so on. Eventually, the 10

about how to create customer value and you are

elected nominees would form the fund committee and

teaching us how to sell combs to monks and calling

all the project proposals must undergo their approval

that good sales skill? Give me a break.

before taking on any charitable activities. With such a complicated process, we notice the good and bad which sometimes lead to having things undone.

Q

Xiao-Ping Chen: Something is wrong with the value system.

The key is to have leadership, and for someone to be responsible. For years I have been saying don’t © International Association for Chinese Management Research

Jack Ma: Exactly. I once decided not to hire 13




a guy who was good at communication, logic, and

struggles, but never gave up, outsiders didn’t know,

management. We were almost ready to hire him, but

we were the first Internet company in China but

he concluded the interview by saying he would bring

because we were in Hangzhou no one knew about

a lot of former clients with him when he joined us.

it. When I returned from Seattle at the end of 1994,

I immediately changed my mind and said thank you

we discussed what unied us. We didn’t do well in

but let’s nd another opportunity to work together. I

business, but we stuck together. Why?

could see that if he left our company, he would take away some of our customers as well.

Q

Q

Xiao-Ping Chen: Was it because of you? Jack Ma: No, if it was because of me, then what

Xiao-Ping Chen: That’s a moral issue.

was it about me that made people not want to leave? Jack Ma: Yes. I wanted him, but not his clients.

Together we wrote down the 20 reasons for staying

That’s the moral problem. I think Alibaba has

at this company and eventually combined them into

become more stable in recent years not only because

nine. From then on, every new employee had to

of good performance. I don’t encourage employees to

follow these nine principles, which later on became

start their own businesses because Alibaba’s mission

the basis of our employee performance evaluations.

is to help others start their businesses. We have 7

Rather than measuring sales performance, we

million sellers on our platform, join us if you want

focus very much on assessing these values. After

to help them, but if you want your own business,

some time, we refined the nine principles into six

then you’d better stay away. If you must join I will

core values, also called “Six Meridian Swords.” If

not turn you away, but in principle I don’t like that

employees can’t abide by these core values, they

type of person. If you join, we have 7 million sellers

will have to leave. Regarding evaluations, I recently

working hard to start their own businesses and your

made a new discovery, that small companies tend to

job is to help them do that. If you want to be one

like people with good sales performance but poor

of those 7,000,000 people, I will certainly support

values, the so called "wild dogs".

you. So, when I talk about a culture of openness, transparency, sharing, and responsibility, it’s also about acting and convincing others.

Q

Q

Xiao-Ping Chen: Because they bring more money to the company? Jack Ma: Yes, it’s true they make more

Xiao-Ping Chen: I can’t agree more. You specically emphasize the importance of having core

money, but the money is from dishonest dealings,

values. I believe that your core values are the “Six

and may cost the company in the long run. When

Meridian Swords” as you named: customer first,

that generation becomes company leaders, the

teamwork, embrace change, integrity, passion and

company will be weak because they get used to

commitment. How did these values form? What role

being dishonest and taking advantages. That's the

have they played in Alibaba’s development? How

biggest hurdle for small companies if you ask me.

have they inuenced employees?

It’s the "wild dog" culture. Meanwhile, the hurdle for big companies is what I call the "little white

Jack Ma: Well, I didn’t devise these values alone. In the rst year we gathered all the founders

rabbit" culture where people get along well but don’t necessary perform well.

to think about this, we started from the 1995

I killed two “wild dogs” in 2002 when I

Chinese Yellow Pages, and went through pains and

proposed the "one yuan prot" policy. The company


14




We talked about “Customer First” at a meeting

was suffering from serious losses, and at the beginning of the year, we had a meeting.

with more than 200 people. An investor told me

At that meeting, I asked what Alibaba could do

that if he known that I put customers first and

to survive in the Internet business where everyone

shareholders third, he would not have invested in

was giving kickbacks and without kickbacks you

Alibaba. I said it’s not too late, and that he should

could not survive, but it was a violation of our basic

then sell his stocks immediately. He was shocked.

principles. The meeting started at 8 am and lasted

Of the millions of people in this world, I knew that

until 4:30 pm. Every body said that wasn’t how we

someone will believe in putting customers first.

wanted to live. At 4:30 pm, I concluded the meeting

Afterwards, some other investment companies also

by saying: “As the founder, I would rather shut

started selling Alibaba stock.

down the company than giving kickbacks. That is

I have my principles, right? Maybe I am not

a behavior we will not tolerate. We want to make

so pretty in private, but my performance is good. I

money, but if we rely on kickbacks to make money,

refuse to believe that you can’t find one person in

we will fall one day - just like the others. I don't

this world who puts the customer rst; there are so

want to do that. For people who support giving

many people and so many investors in this world.

kickbacks, they can choose to leave right now. That's

Fairness is part of Alibaba’s core values. We have

my principle.”

a clear message: we will not tolerate kickbacks; we

Half a year passed. Our revenue was

will not tolerate someone who says they will poach

RMB800,000. And we found out that sales from two

customers during a job interview; we will start small

employees accounted for nearly 50% of the revenue.

and will never cook the books; and we will fire

Both had been giving kickbacks.

someone who visits only three customers.

Q

Q

Xiao-Ping Chen: So did you let them go?

Xiao-Ping Chen: What do you mean by “visiting only three customers”?

Jack Ma: I fired them, firmly and decisively. Jack Ma: If I nd out that a salesman planned

This is how from 2005-2006, the company started fostering its own value system.

to visit ve customers daily but only visited three but still reported ve, I'm going to re him. If he cheated

Q

Xiao-Ping Chen: And that's about what you can do and what you cannot do.

on those little things, how can I trust him again? If he is honest, I will not re him for visiting only three customers instead of ve. But if he lies to me, how

Jack Ma: I'm not sure what we can do, but I'm

can I trust him? How can we work together? Trust

quite clear on what we cannot do. And that formed

is an important part of our culture at Alibaba from

the base of Alibaba’s culture. In a meeting with the

early on.

Wall Street investors, I explained that I always put customers rst, employees second, and shareholders

Make Integrity a Priority

third. Putting the shareholders first is capitalism’s biggest mistake, because shareholders do not have

Q

a long-term vision for the company. If you cook the

Xiao-Ping Chen: Your company outlines integrity very clearly in the employee handbook. The

books to please your shareholders, who will pay the

company reportedly even has a special department to

price? Your customers will. What is our purpose?

ensure integrity.

Only customer satisfaction can benet us all. So we are all clear on this: customer rst. © International Association for Chinese Management Research

Jack Ma: I must clarify that the department 15



企业家视野专栏 is for integrity, and has nothing to do with the

young people would get a job at our company and

government, which has the same pronunciation as

then after the 3-month new employee training, they

integrity in Chinese.

would do well in the first month or two and then leave abruptly after signing a bunch of contracts.

Q

Xiao-Ping Chen: You also have a special detective officer who can sense if anything goes

Q

Xiao-Ping Chen: Really? It's unbelievable.

wrong. Even so, something went wrong in 2011; that is, the B2B customer incident, and the incident at ju.taobao.com in 2012. Can you discuss these

Jack Ma: Yes, they are like the spies we only see in movies and novels.

incidents?

Q

Jack Ma: Today I can proudly say that I really

Weiying Zhang: What’s the percentage of these companies in all of your customers?

stuck to my principle of integrity when handling those incidents. The degree of openness from a company

Jack Ma: Perhaps 1%, it was a serious issue.

the scale of Alibaba was very rare compared to other

The way we handled this issue sets an example for

companies in China at that time. We proactively

the entire company and the entire society that any

brought the 2011 and 2012 incidents to light. When

Alibaba employee who dared to do the same thing

we disclosed the incident we had already pretty much

again would face an immediate “death penalty.”

handled the situation. I understood very clearly that it was the right thing to do. We need to put integrity as our priority; revenue is only second. Integrity is

Q

Xiao-Ping Chen: It is absolutely not going to happen again.

connected with the very root of your culture; what we are building is an ecosystem and a platform that

Jack Ma: Many people still thought it was

will truly benefit hundreds of thousands of people.

denitely a storm in the tea cup. But this was cancer

During the 2011 B2B incident, David Wei’s team

and must be rooted out; otherwise the cancer cells

was under extraordinary pressure, especially as we

would spread quickly. Although it was painful back

saw a lot of scammers particularly in Fujian province

then, pain was not the same as suffering. If we

in China. They got on Alibaba.com and started to

avoided the pain today, we would suffer tomorrow,

scam people. We reported them to the police multiple

and suffering is scarier than pain. When the suffering

times but no one was arrested, it was no use.

becomes unbearable, we will be nished. So I took the action on purpose, to demonstrate to all that I

Q

Xiao-Ping Chen: Were people passing the buck?

will not accept such behavior. One may nd it hard to imagine – pulling out the CEO and his entire

Jack Ma: The ultimate problem is that we’re

team. I was determined to make a big deal out of it.

pr et ty po we rl es s. If yo u lo ok at Al ib ab a as an ecosystem, we have about 350 million people on

Q

Xiao-Ping Chen: You handled it very well.

the platforms and more than 34 million companies living within it. I am operating an ecosystem of more than 600 million people. If 1% of them are bad

Jack Ma: It was not evil behavior that we hate; rather, we hate indifference to evil behaviors.

guys, that means I have 6 million troublemakers. We found out later that some scammers often moved

Q

locations – those from Fujian would go to Shanghai,

Xiao-Ping Chen: Great. After that incident I wrote an article, entitled The Character of a

Guangzhou, and then Zhejiang. At the time, some

Company. But why did similar incidents occur in


16

Executive Perspectives 企业家视野专栏 Taobao after that?


and system problems. It is not difficult to solve system problems. We adopt an “interlink assurance”

Jack Ma: I was about to disclose the Taobao

policy that binds supervisors and subordinates in

incident when a magazine in Guangzhou preempted

the recruitment process, meaning that today I am

it. Of course the article was quite exaggerated.

your boss, so I am accountable for what you do, and

I thoroughly analyzed the whole situation and

I shall shoulder responsibility together with you if

found that the real problem was with Taobao's senior

you do something wrong. I request my direct reports

management. The Internet developed so fast that

to tell me the truth. If they hide the truth from me, I

we neglected Alibaba’s strict training system in our

would be inculpated if anything goes wrong.

basic process of recruitment and training. At that

I also observe people when I talk to them. If

time I felt it was really hard to run a small business,

I find that someone has something in his hands,

so I offered free services. Actually I offered free

something must be wrong. This is what a "sensing

services three times. The purpose of the first time

ofcer" does. If someone does not look into my eyes,

was not to beat others; it was because we had no clue

he is either not happy with me or hiding something

about the business model and did not know whether

from me. I would have a chat or a drink with him.

what we offered was useful or not. Therefore, the

If I cannot see the problem, then it is my problem,

starting point was to explore and dene a model.

using the wrong people or neglecting my s upervisory

Later I said we would have to charge for the

duty, and my boss has to bear the responsibility

service in five years, but then came the financial

too. This is the first level of interlink assurance.

crisis. Ok, let’s keep it free. After offering free

Otherwise everybody would say they are not aware

services a few times, the industry reached RMB700

of the issue, and it would always be someone else’s

bi ll io n in th at ye ar. In a RM B7 00 bi ll io n fr ee

responsibility. I want to hold everybody accountable.

market, it is natural that you have all kinds of

Second, each customer complaint is

people. We desperately needed people, so all types

investigated. Competition between customers is

of job candidates were introduced by employees, or

cutthroat. If we all sell tea, and you take bribes from

recruited as interns.

a seller, others will blow the whistle. Once we nd out there was bribery involved with a shop, it will be

We can only be protected by a set of core values

closed forever and can never re-enter the Taobao and Alibaba system. Their reputation is ruined, which is a terrible thing for many people.

Jack Ma: It was really scary, what should we

Regarding whistle blowing, if one of your

do? I told my colleagues that this had to be handled

employees receives a report letter, the shop will

seriously. However, nobody is perfect. It was really

be closed if the claims are found to be true. So the

a social problem, not just an issue with us. The most

briber is also afraid, as he knows that many people

important thing is to cultivate our immunity, the core

can blow the whistle. If your employee does it,

of which is our values, our systems, and our interests.

other employees can report it; if you give money,

Under this circumstance we set up the Integrity

your employees would definitely know, and if they

Department with six employees. Probably no other

report it, your shop will be closed. That’s why I deal

company in China has an integrity department.

with the source. Our interlink assurance system, our cultural system, and technical system all support

Jack Ma:Our integrity department is very

our efforts. We have hidden lines encrypted in all

efficient. What we want is not a fire brigade but a

our programs that keep track of everything, just

fire station to fundamentally solve both technical

like leaving footprints in the snow. Once I suspect


17



企业家视野专栏 you, I will definitely chase you no matter how far

is fine if you want to hire more people; you just

you run and bring you back to jail. By this I am

need to increase sales by RMB100 million for an

telling employees that even if you have taken the

extra headcount. And this year, I will increase it to

money, you would not dare to spend it as you would

RMB140 million for an extra headcount.

fear getting caught. This is how we operate – six

So you can see that we don’t have to budget

people, reporting with real names, and immediately

our headcount; it is automatically linked with sales

investigating reports. Reporting with real names is a

turnover: year before last it was RMB100 million for

commitment.

an extra account, last year was RMB120 million, and

I feel that this system is working well. Of course

this year is RMB140 million. You want to add one

we are still improving it. Meanwhile, we resumed

person, just increase your sales by RMB140 million.

our recruitment. Starting from last year, I am most

No need to talk to me. I'd be happy if you want to

proud of the change in the company's recruitment

hire 1,000 more people. It is really your call. Now

budget. When we were planning headcounts at the

with upright force growing and evil trends declining,

beginning of the year, I asked how many new hires we

the problem is solved.

were aiming for, as we aimed to double our revenue.

From the perspective of management, problems

They told me we needed additional headcount of

are inevitable as long as there are people and

7,800, and at a minimum our new headcount could

organizations. These problems are not necessarily

not be fewer than 6,000. I told them I disagree. They

bad. When the water is too clear, there will be no sh

asked how many I thought would be appropriate.

in the pond. We are in such a social environment,

I said 200 people. The response was that it was

and I get to understand many things through my

absolutely not possible. Then I said it must be 200;

experience of handling those incidents. It all boils

if we had one extra headcount, all the managing staff

down to whether you are willing to challenge,

would have zero year-end bonuses. Three people do

whether you are willing to take responsibility, and

ve people’s job and get four people’s pay. I said I

whether you are willing to sacrifice yourself for

had been listening to them in the past ve years and

the future. I have never felt ashamed of myself; I

we had recruited so many people, but how many of

show my wounds to people, not to you but to my

these people were really necessary for our future

employees, and I hope they will remember what

development? They kept saying 200 people would

I have done in the history of Alibaba. Perhaps my

not do.

employees will ask our CEO in the future: Jack Ma

But last year we reduced 600 heads and

did this, so why can’t you? As I said this year, if

doubled our revenues! We achieved RMB19 billion

George Washington, the rst president of the United

in sales with a reduction of 600 employees. Now

States could retire, so can I.

they are extremely careful when making hiring decisions. We are not going to hire only little white rabbits. There are too many rabbits, and wolves start

Q

Weiying Zhang: By retire do you mean your reassignment as the group’s chairman on May 10?

to eat the rabbits. So now we have only 200 people. And there is something interesting in the managing

Jack Ma: Yes. I will have three missions. The

of the company now. For example, if we had three

rst is regarding Alibaba’s current inuence. Today,

people and doubled our revenue s. As we become

Alibaba has exceeded everybody’s expectation. It has

more efcient at our jobs, I will be more demanding.

influenced people’s consumption styles, production

Adding one headcount (including security guards

and manufacturing styles, and also lifestyles. Its

and cleaners) at Taobao will have to be justified

impact on retail and the entire future of mechanisms

by addi ng RMB100 mi ll io n in sa le s vo lume . It

and ecosystems will keep increasing. If I were just


18



企业家视野专栏 a CEO, I would operate the company following the

between personal relationship and business

corporate logic. But as the chairman I must look at

rationality? Looking back, how do you think

the company from a higher level, as I must ensure

the conflicts between relationship, loyalty, and

that the company keeps abreast with society’s

rationality should be handled?

progress. Economists like Zhang Weiying do not have the

Jack Ma: This is a rather complicated question.

tools to change the world, so you can only inuence

Without feelings we are just machines, and it is

the world through speeches and writings, while I

natural that people will get close to one another

have the real means and tools, but I am not able to

eventually. But if we focus too much on human

speak out like you.

relationships, we cannot form an organization, or a company that can scale and impact the society;

Q

Xiao-Ping Chen: You change the world with your actions.

instead, we can only impact ourselves. In general we are doing ne in this respect, including the departure of some founding partners, including my wife. She

Jack Ma: That’s true. Some people say that Jack Ma does not want to be responsible. The truth

was the no. 2 employee of Alibaba. But we had no choice.

is, I have many responsibilities on my shoulders,

But leaving does not necessarily mean the

but I must keep quiet. My beliefs tell me to map out

relationship is ruined. My wife can be mad at me,

my strategies from a national and global standpoint.

but I am not angry with her, as I know that she does

My second mission is to build a talent training base,

not work for me today but works for the mission

and to build our culture. The third is charity work.

we committed to years ago. As a CEO, I try to stick

What is charity work to Alibaba? It's waking up the

to the commitment. I told everybody that they can

kindness. If you have kindness, your products will be

hate me, but that will not make me give up my

good, and your kindness will affect others. Alibaba

commitment.

does charity work; our existence contributes to the employment of 10 million Chinese people and the

Q

Xiao-Ping Chen: Do you think they hate you?

survival of over 10 million small businesses. How we do things will affect what a countless number of

Jack Ma: No, it is not possible, they may

households purchase; therefore products and services

just feel sad and lost. In the process of change,

must come from kindness. I told my colleagues to do

some people may be unable to adapt. Unlike other

the right thing and don’t make me to have to come

companies, I would not reassign them to run another

back!

department or another company just to make them

I have my own life. The more enjoyable my

feel better.

life is, the happier you are, and the more peaceful my heart will feel. If I am irritated, you will be

Q

Xiao-Ping Chen: So you don’t do that.

even more so. A company’s rst founder generation should have a good life so that employees won’t

Jack Ma: Right. If you do that, you are just

complain in the future. Those understandings are

covering the existing problem with another one, and

related to human nature, Buddhism, Taoism, and

then you will have more and more problems. I have

Confucianism, which I hope will all be practiced.

learned many hard lessons, in 2003, for example. So I won’t allow this to happen now. I feel that is

Q

Xiao-Ping Chen: In all these years running the business, have you ever encountered conflicts


my responsibility. You can hate me, but don’t hate this company. The reason that I choose to retire 19




at the age of 48 is that I want to phase out myself

people who excel and entrusting people wit h the

before someone else phases me out. This is how I

power to make decisions are two different levels.

understand myself.

We have people who are in their 70s but still like to make judgments and decisions by themselves. It

Q

Xiao-Ping Chen: Lastly, would you like to share your best experiences in starting and managing the

makes them feel accomplished, but at the same time,

business?

to do. You have the power and do others have to kill

they have deprived others of something they want you to get the chance to make decisions? You can

Jack Ma: My experience in starting a business

have your own life only if you entrust people with

is to start with things that make you happy, and also

the rights to make decisions, life is important, so is

start with the easiest rather than the most difficult

happiness. I think as Chinese enterprises improve,

things. My management philosophy is “use people

more people will focus on charity work. Bill Gates

with doubt and use those who you doubt” rather

called me the other day and asked me to pledge

than “trust who you choose and do not pick who you

donations.

doubt.” From a management perspective, I believe in letting people judge instead of asking them to do things.

Q

Xiao-Ping Chen: What do you mean by letting people judge?

Q

Xiao-Ping Chen: Really? Tell us about your thoughts on this topic.

The Signicance and Means of Charity

Jack Ma: I mean making judgments. Starting

Jack Ma: Well, Gates came to Beijing for his

up a business is to entrust people who excel, for

all-out donation campaign. I went there and met with

example, you would ask Zhang Weiying to do

them. I asked Warren Buffett about his age. He said

things because you think the his ideas are great;

he was in his 80s. And I asked him why he didn't

whereas entrusting people with the power to make

donate in his 40s. I told him that I would donate as

decisions means you would let Zhang Weiying

well if I were in my 80s.

to make decisions because you believe he is more capable than yourself. These are two totally

Q

different mindsets. To trust who you choose and

age.

Xiao-Ping Chen: But Gates donated at an early

not pick who you doubt is very basic, however, using people with doubt focuses more on a person’s

Jack Ma: Yes, but the issues in China are much

capability than his/her integrity. In Chinese, the

more complicated. You can’t see the real China in

word trust consists of two parts – trust and entrust;

Beijing, Shanghai and Guangzhou, you should go

I believe in Zhang Weiying, but I will not ask him

to Qinghai. I absolutely agree that today's business

to take the president position of a multi-national

leaders should assume social responsibility, and

company. Therefore, I’ve always believed that we

many of them have done that. Meanwhile it is really

should use people with doubt and use those who

important for us to think about this issue. We have

you doubt. Let different types of people give it a

not developed a clear understanding about what

try. This may work. It turns out many talents are

money is and how to manage donations. Gates

discovered by those who doubt.

has his foundation to manage donations; but which

Management is a long-term process, entrusting


foundation can we donate to in China?

20




Q

Xiao-Ping Chen: That makes sense to me.

Q

Weiying Zhang: A recent survey in the U.S. found that people who believed in the market donate

Jack Ma: In addition, I told them that they

more money and do more volunteer work than those

should go to London and Japan to talk to the rich

who believed in the government. One explanation

people to donate. Why did they come to China only?

is that those who trust the free market and free enterprise feel more obligated to help others.

Q

Xiao-Ping Chen: But the Russians donated.

Publicizing your good deeds is not being a real philanthropist, and worrying about revealing your

Jack Ma: Gates called me again a couple of

bad deeds is true evil. We do good deeds to make

days ago. He said if I do this, it will send a strong

others happy. Nowadays, in China, many are forced

message to China. I believe what we really need

to donate rather than it being a voluntary act.

is to build up a charity system. The amount of donation won’t matter as long as we have a sound

Jack Ma: I do things to make others happy, but I

charity mechanism. I don't think merely donating

won't brag around about it. China’s prosperity could

can actually solve the problems, and currently the

not be achieved without the hard work of countless

most urgent problem is to awaken people's social

entrepreneurs, and that's our biggest contribution to

consciousness.

the Chinese society.

I’m doing charity in China in my own way. So I told Gates that we could cooperate in the

Q

future. Even if we can't, it's still OK with me, for I

Xiao-Ping Chen: We can only choose our way to contribute to the society. Jack, thank you for sharing

will use my way to do good things for the Chinese

your stories and wisdom, this is certainly another

society.

way to contribute to our society.

※

We thank Eve Yan for her translation of the original interview in Chinese.

※

Footnotes:

1 David Wei (Wei Zhe) was the CEO of Alibaba.com from 2006-2011. 2 Dr. Morris Chang (Zhang Zhongmo) is the founding Chairman of Taiwan Semiconductor Manufacturing Company (TSMC) Ltd. in 1987. TSMC pioneered the "dedicated silicon foundry" industry and is the largest silicon foundry in the world. Morris is known as the father of Taiwan's chip industry.


21

Alibaba

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