Jack Ma at Alibaba

* This case study is an amalgamation of articles and case studies written on Jack Ma and Alibaba. Original
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Alibaba hit the headlines with the world’s biggest IPO 1 in September 2014. Today, the
company has a market capitalisation among the global Top 15, has surpassed Walmart in
global sales, and has expanded into all major markets in the world.

Under Jack Ma’s leadership, Alibaba has become not just the dominant force in China’s e-
commerce market with 828 million active buyers but also a symbol of China’s economic rise.
Ma is now widely considered as an informal global ambassador for Chinese business and is
an influential figure for the community of start-up businesses.

Likened to a rock star of entrepreneurship, Ma had risen from humble beginnings to the
pinnacle of modern Chinese business in less than 20 years. How did a former English teacher
who had not been exposed to the internet until the end of the 1990s become iconic among
internet multimillionaires? Was there something special about Ma that helped him stand
out?

Ma “Magic”

Of humble origins and raised in Hangzhou, Jack Ma was an English teacher at the Hangzhou
Institute of Electronic Engineering, when he first visited the United States in 1995 as a trade
delegation interpreter. There he was introduced to the world of internet. He returned home,
and despite though he didn’t have a technology or computing background, he set up of
China’s first web company, China Pages, an online directory for domestic business looking
for customers overseas. In 1996, China Pages was pressured into forming a joint venture
with Hangzhou Telecom. The deal put the government firmly in charge.

“At that time, I felt it was too tiring doing e-commerce in the government,” Ma said in an
interview. “E-commerce should start with private enterprises.”

Itching to run his own company, Ma asked 17 friends to gather in his apartment in
Hangzhou. He gave a long talk about his ambitions and how much China needed a great
start-up. Two hours later, inspired by the vision provided by Ma, everyone had bought into
the idea and committed a share in the business. That evening, Ma raised a total of $60,000.
That was how the story of Alibaba began.
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An initial public offering (IPO) refers to the process of offering shares of a private corporation to the public in a
new stock issuance. An IPO allows a company to raise capital from public investors.

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From the beginning, Ma wanted the company to become international. Such vision was
evident even in the name. Ma took the name Alibaba from “A Thousand and One Nights”, a
globally recognised a name. And the story of “Open, Sesame!” conveyed what his company
did—to open doors for Chinese small and medium sized companies to international trade.

Early on, Shirley Lin, a Goldman Sachs banker, visited Ma’s apartment. She had heard about
the company from a friend, Joe Tsai, a Yale-educated lawyer who had recently joined
Alibaba. Lin said:

“I went up to the apartment, where they were all working 24/7. Jack’s ideas were not
entirely original. They had been tried in other countries. But he was completely
dedicated to making them work in China. I was moved by what I saw.”

But it wasn’t only Ma’s dedication and passion that led to Alibaba’s success. Ma was also
able to transfer his passion to others. When he was presenting his idea of Alibaba to his 17
friends, the internet was not yet an obvious business opportunity as it is today. The business
model had no proven record. However, Ma was very clear about his vision. And he was also
able to express his vision, with confidence and optimism. This inspired and excited his 17
friends.

Ming Zing, the Dean of Hupan School of Entrepreneurship says:

“In my course I show a slide of 10 business leaders and ask the students to identify
them. They can easily pick out Jack Ma, Elon Musk, and Steve Jobs. But virtually no
one can identify the CEO of CitiGroup or Toyota or General Electric. There is a reason
for this. Unlike GE, Toyota, and CitiGroup, which deliver products or services through
optimised supply chains, digital companies must mobilise a network to realise their
vision. To do that, their leaders have to inspire the employees, partners, and
customers who make up that network. They must be visionaries and evangelists,
outspoken in a way that the leaders of traditional companies do not have to be.”

Jack Ma understood what the future would look like and how his industry will evolve in
response to societal, economic, and technological changes. Even if he, at the time, couldn’t
describe concrete steps to realise Alibaba’s goals, he knew what the company sought to
achieve. His own commitment to a cause larger than himself has propelled him onward. In
Ma’s own words:

"My vision is to build an e-commerce ecosystem that allows consumers and

businesses to do all aspects of business online. I want to create one million jobs,

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 change China's social and economic environment and make it the largest internet
market in the world."

An ability to unite his team around this vision has been critical to Alibaba’s success. Joe Tsai,
founding partner and vice president of Alibaba, described the Alibaba team as “disciples”,
when recalling his first impression in 1999 of Alibaba’s earlier employees, some of whom
had already followed Ma for years.

In 1999, Goldman Sachs became the first investor in Alibaba, investing $3.3 million in what
was then a scrappy start-up. Soon after Japan’s SoftBank agreed to lead a second round of
financing worth $20 million. Along with foreign investors, Ma shared a large chunk of the
company with his 17 cofounders; most were friends and former students. Chauncey Shey,
who worked for SoftBank and helped make the initial investment, commented:

“This was really unusual, his willingness to share. Most founders aren’t willing
to do that, and so that gave us more confidence in him.”

Since 1999, the Alibaba Group expanded to include Taobao.com (an online auction site),
Alipay.com (an online payment service), Alibaba University (using experienced Alibaba
customers to train less experienced users), Koubei.com (a platform for classified ads), and
Alimama (an online marketplace for advertisers to support marketing capabilities for Alibaba
users). Despite Alibaba’s rise, Ma says this was not just about making money:

"What is important in my life is influencing many people as well as China's

development."

Alibaba – The crocodile in the Yangtze river

Ma’s light-hearted nature has helped create a fun atmosphere at Alibaba with regular group
games, songs and outings. When the company first became profitable, Ma gave each
employee a can of Silly String to go wild with.

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In the early 2000s, when the company decided to start Taobao, to compete with eBay, Ma
had the team working on it do handstands during breaks to keep their energy levels up.

Source: A screenshot from the documentary “Crocodile in the Yangtze“

The company also hosts annual talent shows, and Ma is a natural entertainer. At a company
event to celebrate Alibaba’s IPO, Ma dressed up as a punk rocker to sing The Lion King
theme to 20,000 Alibaba employees.

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 Source: https://www.youtube.com/watch?v=u-ogswmH00o

These can come as quite a culture shock to employees joining Alibaba from firms based in
Silicon Valley. But for those fresh out of college, the system of apprentices and mentors is
well received, including the routine of holding regular meetings to “kick off on the morning
and share the evening”.

Ma built a culture of participation, inclusion and fun and exhibited high energy. He was
outspoken, fun loving and ensured all personal traits merged with company traits. Alibaba
employees look up to him as a combination of father figure, inspirational guru, and band
leader. This resulted in loyal, hardworking group of executives, managers and employees
willing to follow him to the ends of the Earth.

Ma followed Tai-Chi and was greatly influenced by Buddhism, Taoism and Confucianism.
This has been a contributor to his resilience propelling him to keep on trying, despite facing
many failures and rejections. Ma doesn’t sugar coat the challenges to his employees. One of
his favourite messages to them is:

“Today is brutal, tomorrow is more brutal, but the day after tomorrow is beautiful.
However, the majority of people will die tomorrow night.”

However, he is also a great communicator able to instil trust and confidence to overcome
the challenges the future holds.. This is evidenced by a leaked e-mail to employees dispelling
concerns over sluggish performance of the company’s share price:

“In 2001, we said “Be the last man standing!” Even if we were on our knees, we
would be the very last to keel over! Nowadays we have an even greater responsibility
to our customers. Not only must we not fall over, but we have a responsibility to
protect them, the tens of thousands of small and medium sized businesses all over

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 the world who count on our services! We need to protect them so that they will
prosper and not
keel over! These companies will face major challenges to their survival; it is our
mission to help them to survive—to make it easier for anyone to do business
anywhere.”

To fulfil Alibaba’s mission, Ma surrounded himself with capable and innovative people. He
knew that he was not an expert at everything, so he empowered employees and welcomed
their opinions. Usually, companies put the CEO’s office on the top floor. But in Alibaba, Ma
occupied the 6th floor while the customer service department was on the 9th and 10th
floors. To Ma, these two floors were his favourite place and would often visit them to listen
to customers and employees.

Employees felt that it was easier to work at Alibaba compared to most other Chinese
organisations which were bureaucratic. The spirit of partnership, collaboration and taking
responsibility has been strong across Alibaba, and Ma has long been renowned for his
inclusive style of leadership. He was relatable, which fostered loyalty and built a strong
foundation on which Alibaba could grow by creating an environment for its employees
where they can string ideas together quickly and innovate. Ma summarises how he sees his
role as a leader:

“If you want to win in the 21st century, you have to empower others, making sure
other people are better than you. Then you will be successful.”

When he announced his retirement as the Executive Chairman, he echoed the same
sentiment when he wrote he has “complete confidence in our next generation of leaders”
and he “expects Alibaba's new generation of leaders to be ‘better equipped’ to lead the
company.”

Shweta Ganjoo, Senior Editor at India Today stated:

“The message here is loud and clear-- a leader is not just a person who is responsible
or the success of his company but also his team members and his employees and no
one does justice to this role better than Ma.”

And Alibaba employees feel empowered and trusted too. As one Alibaba employee
commented:

“In traditional companies, most of the people do just as his boss ask him to do. They
do not discuss. In Alibaba, we can discuss with our boss and mostly, we all look Ma
like a friend, and we can talk about different ideas.”

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The process is called co-creation (gong chuang). Ming Zeng, Alibaba’s Chief Strategy Officer,
explained:

“Our processes do not occur in a top-down way. They are spread throughout the
organisation and are self-directed. The organisation is no longer viewed as a means
to amplify and cascade leader’s intentions … With the vision articulated by leadership
acting as its magnetic pole, the organisation moves organically.”

And the magnetic field of Ma’s leadership must have been so strong that none of the initial
17 employees has left Alibaba even though the company has now grown into a giant group
with more than 250,000 employees! A headhunter told Fortune:

“It is a happy place in that it has true believers. People stay because they believe in
the mission of the company.”

Tipping Point?

But clearly Alibaba was not a happy place for everyone. In spring 2019, a wave of protests
against long work hours stirred up China’s tech companies, including Alibaba. The Anti-996
campaign – named after the 9am–9pm shifts, 6 days a week, common to many of China’s
tech giants – started on the code-sharing platform GitHub called “996.icu” – a reference to
that working such a schedule can end in the intensive care unit (ICU). The discussion gained
momentum, as users added to a blacklist of more than 150 companies that push their staff
to work excessive hours, posting evidence of unpaid overtime. Ant Financial, Alibaba’s
financial services company, was listed as having a “9106” work schedule – starting at 9am,
ending at 10pm, for six days a week.

In response to the Anti-996 campaign Jack Ma wrote a series of posts shared on Alibaba’s
WeChat account:

“In this world, everyone wants success … so I ask you all: if you don’t put in more
time than everyone else, how are you going to achieve your success?”

Claiming that the 996 schedule was a blessing, Ma hoped that:

“Alibaba workers passionately love their work. If you don’t like your work, every
minute is torture.  If we find things we like, then even 12 hours a day is not too much.
I personally think that being able to work 996 is a huge blessing. How do you achieve
the success you want without paying extra effort and time?”

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 “While the laws will decide whether the 996 schedule is right or not, have we really
pondered over our choices, the value of our lives and what we are fighting for? Once
you've got clear answers to these questions, you'll never feel regret or be torn
between different ideas… Just like in marriage, you never feel time is going too slowly
if you are in a happy marriage, but you feel one day is as long as a year if it's not.”

His remarks have spurred criticism, but Ma didn’t back down. "The real 996 is not simply
overtime work," he said, adding that everyone has the right to choose their own lifestyle:

“We will not force employees to work overtime, but we encourage everyone to fully
invest themselves. Those who work shorter hours won't taste the happiness and
rewards of hard work.”

People who slacked off were not considered “brothers.” And those unwilling to put in 12-
hour days at Alibaba need not apply:

“Those who can stick to a 996 schedule are those who have found their passion
beyond monetary gains. If you want to join Alibaba, you need to be prepared to work
12 hours a day. Or why bother joining? We don’t lack those who work 8 hours
comfortably.”

While the 996 work culture triggered fierce criticism from the public and complaints from
employees, the company hasn’t been struggling to attract new employees. Most Chinese
youth held the values wherein they believed in dedicating extra time to develop themselves
for improving their professional capabilities. They were encouraged based on a belief of
working hard when young would improve their future life. Towards this end, they were
willing to work hard and compete for better earnings to gain rapid financial success.

Cindy Yang, who recently joined the Chinese tech giant, endured six rounds of tests and
interviews before she was offered the job. The competition is so fierce that the master’s
degree holder spent ¥8,000 (£920) on a private tutoring class designed to teach candidates
how to pass job interviews at internet companies.

“Most tech companies would ask if you mind working overtime during the interviews.
If you show a little hesitation, you’d lose the opportunity. There are too many rags-
to-riches stories in this industry. The atmosphere makes you want to climb up. When
you find people of your age standing so high, and you are not yet there, the stress is
huge.”

The 28-year-old now works from 10am to 10pm, together with her team members, fuelled
by free lunches and dinners from the company canteen. Recognition of high performers in

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company-wide announcements helps, too, as do the prizes awarded to the “A-teams”
ranging from Louis Vuitton wallets, belts and limited-edition sneakers to monthly bonuses of
tens of thousands of yuan or even a car.

With the Chinese tech industry growing faster than it can bring in workers, high salaries are
combined with intense productivity to act as both carrot and stick. According to the income
report of China’s National Bureau of Statistics, internet industry workers topped the chart
with an average annual income of ¥177,544 (£ 20,250) in 2020, up 10% from the previous
year. Perhaps, when companies squander so much money on employees, they feel entitled
to increase the workload. Jack Qiu, professor at the National University of Singapore, said:

“Since work at internet companies is knowledge-intensive, productivity cannot be

boosted by increasing workers as in a standard manufacturing model. Having each
person work longer hours is still a more efficient way to get the job done. Companies
look to increase the surplus value, through increasing the work hours and intensity of
labour.”

As a commenter on Jack Ma’s post stated:

“The bosses do 996 because they’re working for themselves, and their wealth is
growing. We work 996 because we’re exploited without overtime compensation.

However, motivation for an individual to work 996 varied. For some it was the desperate
need for money and for others getting ahead in career called for dedication. Some others
had no choice except to comply with company culture or for job security. Employees were
not comfortable leaving the office with manager still in the office. They were worried to be
perceived by the manager, who holds the power to reward and punish, as not working hard
enough. So, employees did not have any choice but to stay on. Besides, one would miss out
on significant collaborations and not be able to keep up with the remaining team, if they
went home earlier than others. Tony Yang, an engineer who is working from 11 am to
midnight every day, and is on call 24/7 for system problems cannot imagine his life to be any
different:

“everybody tells us the tech industry is problematic. But what are the other options?
I can’t find any industry that can offer the kind of rewards for people my age.”

Dì Sān Zhī Yǎn (or The Third Eye)

It can be argued that DingTalk, Alibaba’s workplace communication software, fuels the
culture overwork at Alibaba. DingTalk, introduced in 2014, aims to boost productivity
through better monitoring of employees and faster responses to important messages.

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Like WhatsApp, DingTalk lets senders see if recipients have read messages, but it also has a
“ding” feature that can bombard recipients with repeat notifications, text messages and
phone-call reminders. On top of this original feature, the software has a wide range of
functions that include, geo-location function, a clock-in system enhanced with a face scanner
to monitor and verify the whereabouts of employees, as well as a daily report function that
requires workers to list completed tasks. An employee commented:

“Every level of management thinks their demand is the top priority and should be
dealt with first. Even worse, they will ding you through DingTalk even on holiday and
you can’t pretend you didn’t see it. It’s as if you’ve got the CEO of the company in
bed with you at 3 a.m. breathing down your neck.”

The creep of software-driven management and the algorithms that govern workdays of
employees further contributes to the work pressures. From hiring and goal setting to
appraisal and lay-off, productivity-enhancing technologies look to quantify workers’
behaviour by collecting and analysing extensive amounts of personal data.

The surveillance technology used by Alibaba can access employees’ mobile browsing history
and application usage records once their phones are connected to company WiFi. It can also
block selected mobile apps that are considered counterproductive to work, such as short
video platform Douyin and Twitter-like social network Weibo. Besides that, the system ranks
“inefficient workers” based on the time they spend on applications and websites considered
unrelated to work. It also identifies employees who have a high probability of resigning by
analysing their browsing activity on job search sites and transfer of CV-like documents.

“Many of these apps track if an employee stays in a certain area, such as the toilet, for too
long,” said Alan Li, a blogger writing about labour rights for tech workers. While most tech
companies did not have a rigid attendance time, he said, some used office cameras to
calculate an employee’s approximate work time.

In some more controversial cases, technology, including remote sensors, was used to
monitor the time workers spent in toilets. Alibaba has developed an internet-connected
smart toilet system where an infrared detector is installed to monitor the occupancy of each
toilet cell. Developers said the system would increase the space use efficiency, as it would
automatically trigger exhaust fans and send cleaning requests to cleaners.

Some scholars warn that some practices are unethical, invading privacy and burdening
employees with greater workload and stress. Others draw parallels to the factory workers
during the industrial revolution, where workers chased the pace of machines.

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Though his leadership style was different and his management practices at Alibaba had
attracted public criticism, Ma’s leadership was a distinct one. Rudyard Kipling in his famous
poem Ballad of East and West wrote “East is East and West is West, and never the twain
shall meet”. Almost over a century later, as a dynamic leader of Alibaba Group, Ma seemed
to have managed to, conspicuously and questionably, bring together Western and Chinese
management techniques and leadership values which was instrumental in creating world’s
second largest e-commerce company.

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