Alibaba

Executive Perspectives
August 2013 www.IACMR.org
Company Culture and Values Are the

Lifelines of Alibaba
An interview with Jack Ma, Founder and Executive
Chairman of Alibaba Group
Xiao-Ping Chen, University of 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 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 affiliated entities, employs some 24,000 people around
the world and has more than 70 offices 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 companys 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 officer 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 Conservancys (TNC) China board of directors, and is a member of TNCs global board of directors.
Jack Ma holds a bachelor's degree in English from Hangzhou Teacher's Institute and like every graduate,
believes his alma mater is the best school in the world.
International Association for Chinese Management Research
In February 2013, Yabuli was still covered

with white snow, quiet and beautiful. In the 13th
Annual Conference of the China Entrepreneurs
Forum, however, heated discussions were going on
about Chinas future economy and reform. During
the conference break, along with Professor Zhang
Weiying, I interviewed Jack Ma, CEO of Alibaba
Group.
Xiao-Ping Chen: Hi, Jack, it has been a long time

since I last saw you at the Academy of Management
meeting in Hawaii. Im so glad to meet you here
in Yabuli. First, would you please describe your
management style, philosophy, and perspective?
What experience in your life profoundly influenced
your leadership style and philosophy? Its a broad
topic, and we welcome your boundless answers.
Jack Ma: Personally, I feel that multiple
management perspectives have emerged in China
over the past 30 years, but that there have been
no significant breakthroughs. In my view, nations
and corporations develop in a similar manner. For
example, the U.S. political system and management
system are based on similar Christian beliefs. If you
closely observe American companies operational
systems, you will find interesting similarities with
peoples religious beliefs there. Likewise, Japans
micro-management practices reflect their cultural
roots. In China however, because of the rapid
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
from here and there, and nothing is our own. Cultural
beliefs form the root of culture, which serves as the
philosophy of management. I have been thinking
about this question in the past few years. If Alibaba
desires sustainable development, we must have a
management philosophy. But if we dont have a
powerful and persistent corporate culture as the root,
we cannot create the philosophy and thinking. You
learn from America; you learn from Japan. But you

learn only their operations, not their minds. So what
is an enterprises mind? You may find me a little
eccentric when talking about Taoism, Buddhism, and
Confucianism, and mixing them. Indeed, I observe
them all and harvest meaning from Chinas ancient
culture, especially from the Tai Chi philosophy.
Xiao-Ping Chen: Would you expand more

about the particular Tai Chi doctrines that you feel
especially meaningful?
J a c k M a : I n f a c t , Ta i C h i s v i e w o n
accommodation and transformation, yin and yang,
ebb and flow, all thread through our companys
management philosophy. A dialectic view on
accommodation and transformation includes closely
related concepts. The same goes with education and
nurturing. Education is the schools responsibility
and nurturing is the familys job. We call it
transformation by nurturing. And thats what we
really want. I have thought about it for the last four
years, and gradually formed my own perspectives
about our values and value system, the concept of
belief and reverence. Belief is to be grateful for
today and yesterday. Reverence is awe and respect
regarding tomorrow and the unknown. Weaving
belief and reverence into our culture would form the
core values for the basic design of all management
systems.
To see people surpass me is my

biggest wish
Jack Ma: I feel that my thoughts about
management have something to do with my
teaching experiences. I was not the best teacher, but
I certainly was a good teacher. I knew I couldnt
be the best in China, so I decided to step into the
business world. I applied the same rules I followed
as a teacher in running a business. That is, teachers
3
always wish their students to surpass them. That is

the fundamental difference between me and other
entrepreneurs. Most business people, especially those
professional managers, fear anyone overstepping
them. Im the opposite. When I find talented
workers, I want to train them to replace me as soon
as possible. Thats the characteristic of a teacher.
Teachers always want the best for their students. If
the student becomes a professor, or a mayor, or a
big boss, teachers are as proud as if the achievement
were their own. No teachers want their students
to fail. So I never steal the spotlight from newly
hired young people. If someone warns me about an
employee who is trying to overstep me, I reply that
Im a teacher and thats the way it should be.
Another special experience is the way I studied
English. I began studying English when I was very
young, not just the language but more about the
culture. I started chatting with foreigners around
West Lake when I was 13, taking them sightseeing
while practicing my oral English.
Xiao-Ping Chen: You were so brave! I was in

Hangzhou at that time, but never had the guts to talk
with a foreigner in English!

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
skipped a single day! In talking with foreigners,
I realized what they told me was quite different
from what I had learned in school or heard from
my parents. I started to think twice before believing
whatever others told me. That experience made
me more open-minded and better at understanding
Western concepts. I disapprove of Chinese people
who say that Westerners are no good in everything
they do. How about ourselves? What about our
own strengths and weaknesses? Through endless
thinking, I have groomed, little by little, my own
management philosophy in the company, based on
Tai Chi, Taoism, and Buddhism. I never talked about

this directly, but they are the source and nutrition of
our management philosophy.
In addition, my experience in education
makes me interested in hiring, training, nurturing,
and motivating talents. Thats the fun of my job. I
worked as a class teacher before, and my job was
about three things: recruiting good students; fixing
them if they were not good enough, or letting them
go. My English learning experience helped me to
understand Western peoples system, ways, methods
and techniques. I think they are quite good at
methodology, and I embrace their managerial theory
and principles. But its hard for us to adopt all of
their ways because our and their cultural foundations
are quite different. Therefore I use Chinese culture
as a base and adopt Western principles. I let young
people, employees and ground-level managers
decide how to run the company rather than doing that
myself. The traditional Chinese boss likes to control
the companys operations, but that would make
your staff rely on you and never learn how to handle
things in their own way. What a real leader should
do, instead, is to give your team overall guidance
and principles and be the source of your companys
culture. Its just impossible for me to construct the
culture myself.
The leader carries responsibility for

the future
Jack Ma: As a teacher, I know how to use
available resources. When I stroll in the rich
Chinese cultural heritage, I feel that Confucianism,
Buddhism, and Taoism are still powerful today. In
Taoism, the best leadership is not leading at all. What
is leadership anyway? I think it requires sacrificing
today for the future; the person who can sacrifice
today to win tomorrow is a real leader.
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

professional managers; they tend to focus only
on short-term results. I explained that to every
professional manager in Alibaba the first day they
came to work. They understand my view and many
of them now identify with me.
I also worked hard to transform professional
managers, but later I found that the more successful
they were, the harder it was to persuade them to
change. What is a good leader? A good leader
must be equipped with the excellent attributes of a
professional manager. At the same time, the leader
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 cant solve
tomorrows problems. We habitually think about
how to solve yesterdays problems, but it is more
important to consider what we must do today to
solve tomorrows problems. The Taoist perspective
calls for walking your path naturally by following
your understanding of the future rather than focusing
only on past and present problems.
Thats why I used to say that I dont listen
to economists. I may have expressed myself in an
extreme or simple way in order to catch the attention
of those who have not thought about it and inspire
them to do so. I remember right before the financial
crisis, I met with a number of entrepreneurs. They
were all listening to economists' predictions about
the future economy and the governments next
actions. I said: Ducks know first when the river gets
warm in spring. You guys are entrepreneurs, fighting
on the frontiers of the economy. If you dont know
when the water gets hot, what has gone wrong in
your production chain, or with your customers, what
is the point of sitting here listening to economists
forecasts? Economic research covers only models
and problems from the past.
Second, economists draw their conclusions from
a tremendous amount of data, but in China, many
statistics are not completely accurate. How can you
possibly use them to make good judgments? What

should the government do? In my view, it should
not directly control economic policy, but decide on
ways that help shape the economy and solutions to
problems. For instance, instead of directly interfering
with the economy today, government should devise
policies that provide a solution when problems occur
tomorrow. Likewise, companies must prepare for the
future. Speaking in the Taoist language, you must
have a principle to guide you and go step by step. I
think Alibaba is in its current position because we
understand and follow our moral obligation.
A culture of gratefulness, sharing

and openness: live seriously and
work happily
Q
Xiao-Ping Chen: What exactly is the moral

obligation you follow?
Jack Ma: I often feel that people like me are not
supposed to be successful,
Xiao-Ping Chen: Why?
Jack Ma: Because we lack the necessary

elements for success in a normal sense. We have no
resources and no rich daddy or uncle. I used to tell
my colleagues that we were like a lucky person who
catches a gold bar falling from the sky. We had two
choices, to try our luck and look for another gold bar
or to hide it. The first choice isnt reliable because
its like standing by a stump waiting for another hare
to crash into the trunk and kill itself. The second
choice is insecure because someone might steal the
gold. Instead, its better to share it with others, show
your gratitude for what you have, and everyone will
be happy. The core of Taoism is letting things take
their own course; the core of Buddhism is emptiness,
the same inheritance as Taoism. What does it mean
to let things take their own course? It means to stride
ahead even if we know the result, for the process is
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what we really appreciate. After all, everybody is

going to die, and our final home is the cemetery. If
you can see that as your destination through life, you
will not fuss over trivialities. Confucianism is the
Chinese way of management: let the king be a king,
the minister a minister, the father a father and the son
a son; while Western Christianity has developed into
a more open system up to the present. We adopted
what they have in common and implemented it in
our management model: gratefulness, sharing, and
openness.
I gave a speech at Harvard in 2002. After
my talk, a CEO from a foreign company said that
I was a mad man. He said he had been in China
for many years, and didnt believe that my way of
managing a company would work. I invited him to
visit Alibaba. After a three-day stay, he said Now
I understand. Here you have 100 mad men just like
you. I agreed. People in a madhouse never admit
they are crazy. They believe the outsiders are. Thats
why people here in Alibaba are united. Someone
said its impossible to be unable to find 1000 people
who think as he does among 1.3 billion people; if
he did, he would train them to be us. And thats why
we have so many similarly crazy people. Alibabas
culture was developed not through my own efforts,
but through collective hard work. Our culture is the
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
culture, confirm your cultural foundation, and hire
people who share your ideas. Many companies
nowadays want to compete with Alibaba, and I
say, Hey, brother, you dont know what you are
talking about. I have spent 10 years to shape this
companys development. These are the people we
recruited, and this is our way of training them. This
whole e-commerce business model is only one form
of our efforts, and there is no way you can compete
with us.
Xiao-Ping Chen: I went to your company for a
meeting two years ago and found that many meeting

rooms are named after Jin Yongs martial arts novels.
Why?
Jack Ma: Jin Yongs martial arts novels
are the most down-to-earth way of explaining
Confucianism, Buddhism, and Taoism. They cherish
brotherhood, morality, courage, emotion, and
conscience. I have said in the company numerous
times that it is only a matter of time for Alibaba to
become the most profitable company in China; what
Im worried most is that Alibaba becomes merely a
money-making business without any human touch. I
want our company to be like a person, with feelings,
consciousness, and a code of conduct. Alibaba is a
service company, not a high-tech one. The higher the
technology, the further a company will move away
from consumers. I cherish loyalty and brotherhood.
Jin Yongs novels reflect the philosophy of Taoism,
Buddhism, and Confucianism, and yet young people
and our clients comprehend the stories. When we
talk about the Bright Summit and Xiaoyao Tower
(Xiaoyao means wander about at leisure), people
understand and it makes them happy. One principle I
advocate in the company that is inspired by Taoism,
Buddhism and Confucianism is live seriously and
work happily.
Xiao-Ping Chen: People often say work

seriously and live happily. Why did you reverse it?
Jack Ma: Because if you dont live seriously,
life won't be serious with you. If you are unhappy
at work, you cannot be innovative. Likewise, being
serious at work doesnt guarantee that you will be
creative. Isnt it better for one to have fun at work
and feel free to come and go anytime as long as they
finish their work? If you are unhappy with your job,
please go, its not your mistake. Working seriously
and living happily is just nonsense.
Others talk about balancing work and life.
Thats also impossible! About four years ago,
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someone suggested that I give a lecture to teach our

staff how to separate life from work because they
found it too difficult to do so. I talked for about 30
minutes and by the end of the speech, I realized that
I was talking nonsense, meaningless words, for I
never separated my life from my work.
Xiao-Ping Chen: Thats my basic view too. Life

and work are not against each other but they are
inseparable.
Jack Ma: I now want to explain why Im going
to step down as CEO on May 10.
Xiao-Ping Chen: Is that because you want to be

Chairman only?
Jack Ma: In China, stepping down as CEO
simply means you are giving up control of the
company. In an Internet company, stepping down
as CEO is a difficult challenge. People may think
that the chairman supervises the CEO, but that
is completely not the case. If a chairman sticks
to the traditional mindset of a Chinese boss, he
can never handle his relationship with the CEO
well. A chairman has his business to do, that
is to decouple from the company, like a rocket
shrugging off its booster on its way into space.
The rocket still ascends rapidly, but its energy no
longer comes from the original booster. This is
the message I want to convey: before I was 48,
my job was my life; after 48, my life becomes
my job. I want to tell young people that I can
now treat my life as my job. If you work hard
enough, someday you can do the same. On the
other hand, if I still have to work when I am 80,
well, brother, youd better not step in this river.
Moreover, I want to let people know that I, Jack
Ma, at age 48, see that many young people have
surpassed me. This is an undeniable fact. If this
hasnt happened, my past 10 years of work would
have been in vain.
Xiao-Ping Chen: Well, thats because you have

cultivated talented workers.
J a c k M a : I f y o u d o n t g i v e e m p l o y e e s
opportunities, why train them in the first place?
I asked my colleagues whether they want their
48-year-old boss to be brain-crushed and repeat each
simple message five times. They dare not overthrow
me, so I must overthrow myself first.
I tell my staff I want them to appreciate that
their founder knows how to enjoy and experience
life. On the other hand, picking a successor is like
having a baby. You must be young and healthy to
have a baby, right? Im now 48, still with a clear
mind, and its now the right and best time to look
for a successor. If I wait until Im in my 60s or 70s,
with a muddy mind and twisted ideas, I will for
sure deliver a sick baby. No person can kidnap my
company, and I wont allow the company to kidnap
people either. So I decided to step down.
Xiao-Ping Chen: Its uncommon in the business

world that a 48-year-old CEO retires. Your comments
and action are quite daring.
Jack Ma: Yes, I speak boldly, and thats my
personality. If one day I talk plainly and calmly,
then something must be wrong with me. I say
what I think and I do what I say. If one day I do
something different from yesterday, then I admit that
I was wrong but at the time I thought it was right.
My actions match my thoughts; I never speak one
way and think another. If not, that would cause my
employees and the whole society to distrust me.
When you realize you have made a mistake,
there are two possibilities: one is hit the wall and
keep hitting; the other is to turn back. And I started
to bruise my ideas while hitting the wall. Of course,
it might be dangerous for coming up an idea, because
they are based on experiences from the past 10 years.
Are they still applicable in the future? Im not so
sure. So I decided to give younger people a chance.
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However, their values must match with our longterm core concepts. Obviously, Im not going to give
that role to a professional manager, but I will pass
the torch to the one who holds firmly to our values,
and is stronger than us.
The successor must come from

within the company
Q
Xiao-Ping Chen: Do you mean that the CEO

who replaces you must be trained and cultivated
within your company?
Jack Ma: Of course. We already stated it in
the corporate constitution: never allow outsiders
to become CEO. Even if Alibaba is at the edge of
bankruptcy, airborne rescue troops are forbidden.
The new guy must have worked in the company for
at least five years before the corporate constitution
allows him to be a leader.
Weiying Zhang: Did you really make that

decision?
Jack Ma: Yes! We wrote it into the corporate
constitution: no airborne guy, never ever. You can
join the company at age 30 and after 5 years, you
can still be promotedThe president of a country
must be born in the country or have lived there
for decades. If you dont love this country, you
can only be a problem solver but not a leader, so
what would I need you for? What I need is a leader
for the company, am I right? Chinese traditional
medicine makes sense in this way: cure a person,
not a disease. If the disease is cured but the person
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
the company, understands it, and is willing to bear
the responsibilities. If you cant find this guy, thats
only because you didnt prioritize this requirement
enough. If we didnt write it into our constitution,
the board will say: hey, this guy is not good enough,
lets try another one. The investors can never love
the company more than you do. They point fingers
left and right and this could potentially damage
the whole ecosystem of the company. What if you
invited a wolf who might think it is right to eat all
the sheep? Thats the only way he can prove himself,
and thats one of the reasons why nine of ten mergers
and acquisitions fail. We are solving the problems at
the system level.
Xiao-Ping Chen: Great, the following question

is closely related to what you said. From founding
Alibaba, to becoming the CEO, to becoming CEO
and chairman, and now stepping down as CEO,
you have taken different roles in the company. At
different times, how have you positioned yourself in
the companys management? What circumstances
would make you come forward or step aside?
The time to repair a roof is when the

sun is shining
Jack Ma: If the company is in danger, I will
always throw myself in and try my best to help.
This is my responsibility. When the company is
close to success or when I see that the company is
already successful then its time for me to leave.
Furthermore, when the company is at its best time, it
is time to start reforming because the time to repair
a roof is when the sun is shining. You cannot fix the
roof when it is raining because you might slip and
die. Fix the roof on a sunny day; stay at home and
relax on a rainy day: thats corporate responsibility.
Let others set off celebratory fireworks.
Xiao-Ping Chen: Let others to celebrate and you

leave quietly.
Jack Ma: Yes. A leader should let others set off
the celebratory fireworks. It cannot be done by him
and must be done by a stronger person. The success
8
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
Jack Ma: Right, and thats 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
backstage for three years, it would be like putting
you into cold storage at your peak. And when you
are at your lowest point, I suddenly inform you that
you now can go somewhere to take an important
role. I trained the most sturdy and enduring people.
If two guys are not a match with each other, I can
assign them to different jobs because there are full of
opportunities and they can each spread their wings.
In other words, the emperor who killed his brother
to secure his position was stupid. Thats not the
Taoist way and definitely not Buddhist way either. If
I cant get their positioning right, thats my problem,
not theirs. I tried to figure out what happens if the
two confront each other before I solve the problem.
Is he sturdy and enduring, does he have a breadth
of mind? I have three requisites for a CEO: vision,
breadth of mind, and strength. Compared with
others, you need to have better long term vision and
a broader heart to endure unfairness. The heart gets
broader by experiencing injustice, and people get
tougher only by suffering unjust treatment again and
again. Strength is endurance. If a guy returns smiling
after rounds of being beaten up, then he is the one I
want to be my successor.
Xiao-Ping Chen: Now you have decided to step

down on May 10th, does it imply that you have
successfully found your successor ?
Jack Ma: Of course. I have plenty. Im now
persuading them to see the challenges after catching
a golden brick from the sky as I did before. I spent
more than 10 years, especially the first few years,
trying to give back to society gratefully. The new
CEO should also be grateful and willing to share by
returning the wealth to society. A CEO must sacrifice
for others and do a better job than others.
Weiying Zhang: Is it possible that if you choose

one man on your team to be CEO, the others who
were not chosen may take their teams and leave?
Jack Ma: It is possible. But I told them already
that I would not be like Jack Welch, as his method
caused too much of a struggle. A scenario in which I
choose one person and others will leave is not going
to happen here. Long ago I already drove out those
I felt would not be good partners. I'm not going to
cause trouble for the person I pick. I will fix the
trouble myself. However, I might choose a good
partner who will benefit you but might not be quite
compatible with you. If you cant collaborate, then
you cant be a great leader. In the past three years
while I was training potential successors, I found
their weaknesses and would make them to work hard
to overcome their weaknesses.
Xiao-Ping Chen: So you were training their

endurance.
Xiao-Ping Chen: How many men in your

company have been beaten up by you like this?
Jack Ma: Oh, a lot. Its not like my Dad beating
me when I was a child; I did that on purpose.
Jonathan Lu Zhaoxi was appointed CEO of Alibaba Group
Xiao-Ping Chen: To train them.
Jack Ma: Right. As a teacher, how can you

not criticize people, not discipline them, and not
encourage them? If he is an excellent leader, then he
should know that my deeds are from my true love.
Xiao-Ping Chen: People from different levels

may have different understandings about what
you do.
Jack Ma: Right, when I criticize and punish
someone, this person will feel pain and anguish,
will curse me, will think its impossible to work for
me for a long term, and will feel terribly mistreated.
But this training system is cultural, and it actually
fostered todays system of competition. I can tell
that there is seldom such a system among Chinese
Internet companies. This morning in the conference,
we were discussing that competition in China is
actually a competition for talents, and competition
for talents is in turn a competition of education,
and that is related to the education reform. The
reform should not start at colleges, but at elementary
schools. Good or bad national policy depends not
on the quality of colleges but on the quality of
elementary schools. Only good elementary schools
can build a solid base for Chinese children. When
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
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 its only one of my
expressions. We may switch to the airline business,
and we will still succeed. We tried finance, e-shops,
Taobao Marketplace, Tmall, and now AliFinance is
doing quite well too. These are only manifestations.
A hepatitis patient may be yellow-faced, or totally
worn out, but that is just a manifestation.
Xiao-Ping Chen: Right, the key is that his liver

fails.
Jack Ma: Its the same as growing a business.
Whats the essence of strength and speed? Its all
about having great core values. Such competition
will also become a world pattern in the future.
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
ignoring him, and that he may have felt the treatment
was unjustified. How did you tell him that you were
treating him that way for his own good? Did you tell
him openly or did he figure it out on his own?
Jack Ma: I would never tell him that I did so as
to train him on purpose.
Xiao-Ping Chen: Well, not directly of course. So

how do you do it? I mean to give him a hint that its
for his own good, when he feels down and upset?
Jack Ma: A narrow-minded person would feel
that he was set up, by me or someone else. I would
let him be. If he were too narrow-minded to bear the
injustice, I would totally ignore him; let him dry up
for at least 3 months.
Xiao-Ping Chen: What happens if he cant take

it anymore?
Jack Ma: He will come to see me. He will be
mad for sure. Its impossible for a narrow-minded
person to take being treated so badly.
Wei-Ying Zhang: There are in fact a lot of people

who went through this kind of suffering, including
Liu Chuanzi and Yang Yuanqing of Lenovo.
Jack Ma: Key point is that, if a person is
10
lacking something, I will not pick on him; I never

will. Because you can find faults without searching
for it. You can find many of my faults if you pick
on me. You will always hit that wall. If something
is wrong, I tell him so, and then I will watch his
attitude. If he admits his mistakes, then there is no
problem. I fear the most when he doesnt admit to it,
and then makes the same mistake tomorrow. I will
never place a victorious general in the most difficult
war; I will definitely choose someone who has been
defeated countless times but succeeded a few to fight
on the most critical battlefield, because his failures
will make him more careful. A man who has never
failed will fall hard when he does, then you will die
miserable. If he is not open, easily discouraged, and
easily loses control, you should just let him be and
ignore him after punishing him. After three months,
if he still cant dig himself out, you call him in and
have a talk.
If he comes on his own initiative, you can tell
after half an hour whether he has really changed or
is just trying to please you. Talk with him, let him
open up, breathe out all toxins. Some guys have
broad minds; they treat this procedure as using face
to mop the floor, to actually gain dignity. There
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 cant
take it anymore. I not only treat the CEOs this way,
but expect every department manager to have the
same tolerance. I now structured the company into
25 business units, with 25 young business leaders
each having 3-5 assistants. I have spent a lot of time
building up this graduate class, so-called Feng Qing
Yang class. I spend lots of time each year to teach
them about the values of our corporate culture.
Xiao-Ping Chen: Continuing to progress in

cultural concepts.
Jack Ma: Of course, its not feasible to teach
everyone in just one way. Everyone is different and
has a different personality. I hope my company can
be like a zoo of different animals with different

personalities. If everyone is the same within a
company, then the company becomes a farm, raising
a bunch of pigs or chickens. With different animals,
a company can have a good ecosystem, and you must
know how to deal with different people. Otherwise,
you cant deal with society and you can't get along
with your clients. A leader must suffer, endure, and
have vision to stand out compared with employees.
I died thousands of times, and I will not fear another
death. Young people can easily catch up with your
skills, but courage is what makes a leader.
At our last meeting in Taiwan, Dr. Morris
Chang (Zhang Zhongmo)2 discussed innovation.
The first thing I said on stage was that Taiwan is
hopeless if people in their 70s and 80s are talking
about innovation. You believe you are stronger than
young people? Youve got to be kidding. No way
can old men be more creative than young people.
We should support young people in their innovative
efforts. They are more powerful than we are. So by
retiring at 48 I show the Taiwanese how to do it. I
may not be as wealthy as Bill Gates, but I am retiring
earlier than he did. And I think this is what makes
me interesting, just kidding!
Corporate mission has to be aligned

with social development
Q
Xiao-Ping Chen: You are a founder of a Chinese

company where it places a lot of emphasis on
building corporate culture. What is the ideal culture
for Alibaba? How should it be accumulated and
sustained? Would you please give some detailed
examples?
Jack Ma: In the 21st century you must
understand your mission and your reason for
existence. In the past century, companies could
prosper by simply grabbing one good opportunity.
Big companies today in the 21st century, you must
understand a theory: you must solve social problems
before solving corporate issues. Only then can
11
the company last forever. Therefore, Alibaba has

been hoping to solve social problems, problems
of innovation, and employment issues. Alibaba is
no longer simply a company, but an ecosystem. I
lost interest in making a company 5-6 years ago.
The difference between me and economists and
management theorists is that they are making use of
their knowledge, but I use my actions to change the
world. I change things from the bottom up, I train
people that are born in the 80s where they grew up
having access to the Internet, and when they think
this way on their first day, the society will naturally
be different.

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

corporate culture.
Jack Ma: Yes, corporate culture should be
connected to societal values. That is to say, values
and mission come before a corporate strategy
can be formulated. After the strategy is laid out,
organizational structure can be created, followed by

talent recruitment. It is one coherent system. I did
not understand that in the past, but I have gained
more understanding over the years and have created
something systematic of my own. Todays Alibaba is
not built by stitching pieces together, but by missions
and values. Our corporate culture can be summarized
with four simple words: openness, transparency,
sharing, and responsibility. Those words correspond
with my understanding of the Internet.
The Internet has developed so rapidly because
it is open, transparent, sharing, and assumes
responsibility. This is why I have to bring our
corporate culture and Internet culture together,
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
a national strategy. The national strategy shouldnt
be Internet, but should be the market economy, and
the spirit of entrepreneurship, sharing the same
resources. Regardless of how we feel, the society
12
will become more open, transparent, responsible, and

sharing. If your company has such a culture, it will
naturally get stronger, and this is why I would want
our company to achieve this culture. I personally
believe that our company is the most open in China,
at least in its strategy. I can always share my strategy
with others.
People say that Tencent wont allow them to
visit, Google and Amazon wont allow us to visit.
But with us, we would welcome you to come visit
our office whenever you want. What am I thinking?
Hypothetically, if you took my strategy and did a
better job, then I would be at fault. Because that
would mean my culture, my vision, my mission, and
my team are incompetent. What I do is systematic
strategies, in this perspective, I will have to be open
and transparent. I wish all society to open up. We
have opened up our intranet to the public for two
years. We are reconstructing it. When its done,
anyone can find out who is doing which project. You
can all take a look but you cannot comment on our
webpage. You can comment somewhere else, but if
everyone gives an opinion about our business, that
would ruin everything.
We contributed a great deal of our revenue to a
fund for environment and water resource protection.
Weve been doing this for many years and this
amount is in the hundreds of millions. But how do
we decide who gets to spend this money? Or how to
spend this money? I cannot say that Ive established a
democratic system, but we have elected 10-member
out of 25,000 employees and formed a committee to
be responsible for this fund. Each employee would
be his own campaign team, to explain his ideas,
understanding, plan, and so on. Eventually, the 10
elected nominees would form the fund committee and
all the project proposals must undergo their approval
before taking on any charitable activities. With such
a complicated process, we notice the good and bad
which sometimes lead to having things undone.
The key is to have leadership, and for someone
to be responsible. For years I have been saying dont
love me, just respect me. Its impossible to unify the

thoughts of many people, and even harder to unify
the opinions of more than 20,000 people. Its enough
to unify their actions. Unifying action will lead to
unifying minds.
We have a system that cannot go public yet. We
have been testing it internally at the management
level and not all employees may know about it
yet. After 3-5 years, if the test is successful, I
believe we will have an ecosystem that can help
tremendously in improving Chinas economy and
innovation. Furthermore, this system should include
our accumulated management experience. In the
world of management, China has originated nothing;
indeed, we lack roots and systems. We have a mix, a
hotpot that is not genuine cuisine.
Morality is at the core of our culture

Jack Ma: I believe we have inherited much
value from our ancestors. Of course that doesnt
mean we refuse Western ways. They are more
advanced than we are, so their knowledge is part of
the world management doctrine. I just offer food
for thought. After my retirement, I hope to make
some valuable contributions to companies like ours.
SOEs talk about prohibiting the firing of employees.
But what is the big deal if the biggest possible loss
is to not be a chairman anymore? Sometimes we
invite people to come to teach, for example, about
marketing. But if they teach us how to sell combs
to monks (Chinese monks all shave their heads), I
wont ask them back because they are teaching us
to be liars: monks dont need combs. We are talking
about how to create customer value and you are
teaching us how to sell combs to monks and calling
that good sales skill? Give me a break.

Xiao-Ping Chen: Something is wrong with the

value system.
Jack Ma: Exactly. I once decided not to hire
13
a guy who was good at communication, logic, and

management. We were almost ready to hire him, but
he concluded the interview by saying he would bring
a lot of former clients with him when he joined us.
I immediately changed my mind and said thank you
but lets find another opportunity to work together. I
could see that if he left our company, he would take
away some of our customers as well.
struggles, but never gave up, outsiders didnt know,

we were the first Internet company in China but
because we were in Hangzhou no one knew about
it. When I returned from Seattle at the end of 1994,
we discussed what unified us. We didnt do well in
business, but we stuck together. Why?
Jack Ma: No, if it was because of me, then what

was it about me that made people not want to leave?
Together we wrote down the 20 reasons for staying
at this company and eventually combined them into
nine. From then on, every new employee had to
follow these nine principles, which later on became
the basis of our employee performance evaluations.
Rather than measuring sales performance, we
focus very much on assessing these values. After
some time, we refined the nine principles into six
core values, also called Six Meridian Swords. If
employees cant abide by these core values, they
will have to leave. Regarding evaluations, I recently
made a new discovery, that small companies tend to
like people with good sales performance but poor
values, the so called "wild dogs".
Xiao-Ping Chen: Thats a moral issue.
Jack Ma: Yes. I wanted him, but not his clients.

Thats the moral problem. I think Alibaba has
become more stable in recent years not only because
of good performance. I dont encourage employees to
start their own businesses because Alibabas mission
is to help others start their businesses. We have 7
million sellers on our platform, join us if you want
to help them, but if you want your own business,
then youd better stay away. If you must join I will
not turn you away, but in principle I dont like that
type of person. If you join, we have 7 million sellers
working hard to start their own businesses and your
job is to help them do that. If you want to be one
of those 7,000,000 people, I will certainly support
you. So, when I talk about a culture of openness,
transparency, sharing, and responsibility, its also
about acting and convincing others.
Xiao-Ping Chen: I cant agree more. You

specifically emphasize the importance of having core
values. I believe that your core values are the Six
Meridian Swords as you named: customer first,
teamwork, embrace change, integrity, passion and
commitment. How did these values form? What role
have they played in Alibabas development? How
have they influenced employees?
Jack Ma: Well, I didnt devise these values
alone. In the first year we gathered all the founders
to think about this, we started from the 1995
Chinese Yellow Pages, and went through pains and
Xiao-Ping Chen: Was it because of you?
Xiao-Ping Chen: Because they bring more

money to the company?
Jack Ma: Yes, its true they make more
money, but the money is from dishonest dealings,
and may cost the company in the long run. When
that generation becomes company leaders, the
company will be weak because they get used to
being dishonest and taking advantages. That's the
biggest hurdle for small companies if you ask me.
Its the "wild dog" culture. Meanwhile, the hurdle
for big companies is what I call the "little white
rabbit" culture where people get along well but dont
necessary perform well.
I killed two wild dogs in 2002 when I
proposed the "one yuan profit" policy. The company
14
was suffering from serious losses, and at the

beginning of the year, we had a meeting.
At that meeting, I asked what Alibaba could do
to survive in the Internet business where everyone
was giving kickbacks and without kickbacks you
could not survive, but it was a violation of our basic
principles. The meeting started at 8 am and lasted
until 4:30 pm. Every body said that wasnt how we
wanted to live. At 4:30 pm, I concluded the meeting
by saying: As the founder, I would rather shut
down the company than giving kickbacks. That is
a behavior we will not tolerate. We want to make
money, but if we rely on kickbacks to make money,
we will fall one day - just like the others. I don't
want to do that. For people who support giving
kickbacks, they can choose to leave right now. That's
my principle.
Half a year passed. Our revenue was
RMB800,000. And we found out that sales from two
employees accounted for nearly 50% of the revenue.
Both had been giving kickbacks.
We talked about Customer First at a meeting

with more than 200 people. An investor told me
that if he known that I put customers first and
shareholders third, he would not have invested in
Alibaba. I said its not too late, and that he should
then sell his stocks immediately. He was shocked.
Of the millions of people in this world, I knew that
someone will believe in putting customers first.
Afterwards, some other investment companies also
started selling Alibaba stock.
I have my principles, right? Maybe I am not
so pretty in private, but my performance is good. I
refuse to believe that you cant find one person in
this world who puts the customer first; there are so
many people and so many investors in this world.
Fairness is part of Alibabas core values. We have
a clear message: we will not tolerate kickbacks; we
will not tolerate someone who says they will poach
customers during a job interview; we will start small
and will never cook the books; and we will fire
someone who visits only three customers.
Xiao-Ping Chen: So did you let them go?
Jack Ma: I fired them, firmly and decisively.

This is how from 2005-2006, the company started
fostering its own value system.
Xiao-Ping Chen: And that's about what you can

do and what you cannot do.
Jack Ma: I'm not sure what we can do, but I'm
quite clear on what we cannot do. And that formed
the base of Alibabas culture. In a meeting with the
Wall Street investors, I explained that I always put
customers first, employees second, and shareholders
third. Putting the shareholders first is capitalisms
biggest mistake, because shareholders do not have
a long-term vision for the company. If you cook the
books to please your shareholders, who will pay the
price? Your customers will. What is our purpose?
Only customer satisfaction can benefit us all. So we
are all clear on this: customer first.
Xiao-Ping Chen: What do you mean by visiting

only three customers?
Jack Ma: If I find out that a salesman planned
to visit five customers daily but only visited three but
still reported five, I'm going to fire him. If he cheated
on those little things, how can I trust him again? If
he is honest, I will not fire him for visiting only three
customers instead of five. But if he lies to me, how
can I trust him? How can we work together? Trust
is an important part of our culture at Alibaba from
early on.
Make Integrity a Priority

Q
Xiao-Ping Chen: Your company outlines

integrity very clearly in the employee handbook. The
company reportedly even has a special department to
ensure integrity.
Jack Ma: I must clarify that the department
15
is for integrity, and has nothing to do with the

government, which has the same pronunciation as
integrity in Chinese.
Xiao-Ping Chen: You also have a special

detective officer who can sense if anything goes
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
incidents?
Jack Ma: Today I can proudly say that I really
stuck to my principle of integrity when handling those
incidents. The degree of openness from a company
the scale of Alibaba was very rare compared to other
companies in China at that time. We proactively
brought the 2011 and 2012 incidents to light. When
we disclosed the incident we had already pretty much
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
connected with the very root of your culture; what
we are building is an ecosystem and a platform that
will truly benefit hundreds of thousands of people.
During the 2011 B2B incident, David Weis team
was under extraordinary pressure, especially as we
saw a lot of scammers particularly in Fujian province
in China. They got on Alibaba.com and started to
scam people. We reported them to the police multiple
times but no one was arrested, it was no use.
Xiao-Ping Chen: Were people passing the buck?
Jack Ma: The ultimate problem is that were

pretty powerless. If you look at Alibaba as an
ecosystem, we have about 350 million people on
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
guys, that means I have 6 million troublemakers.
We found out later that some scammers often moved
locations those from Fujian would go to Shanghai,
Guangzhou, and then Zhejiang. At the time, some
young people would get a job at our company and

then after the 3-month new employee training, they
would do well in the first month or two and then
leave abruptly after signing a bunch of contracts.
Xiao-Ping Chen: Really? It's unbelievable.
Jack Ma: Yes, they are like the spies we only

see in movies and novels.
Weiying Zhang: Whats the percentage of these

companies in all of your customers?
Jack Ma: Perhaps 1%, it was a serious issue.
The way we handled this issue sets an example for
the entire company and the entire society that any
Alibaba employee who dared to do the same thing
again would face an immediate death penalty.
Xiao-Ping Chen: It is absolutely not going to

happen again.
Jack Ma: Many people still thought it was
definitely a storm in the tea cup. But this was cancer
and must be rooted out; otherwise the cancer cells
would spread quickly. Although it was painful back
then, pain was not the same as suffering. If we
avoided the pain today, we would suffer tomorrow,
and suffering is scarier than pain. When the suffering
becomes unbearable, we will be finished. So I took
the action on purpose, to demonstrate to all that I
will not accept such behavior. One may find it hard
to imagine pulling out the CEO and his entire
team. I was determined to make a big deal out of it.
Xiao-Ping Chen: You handled it very well.
Jack Ma: It was not evil behavior that we hate;

rather, we hate indifference to evil behaviors.
Xiao-Ping Chen: Great. After that incident

I wrote an article, entitled The Character of a
Company. But why did similar incidents occur in
16
Taobao after that?

Jack Ma: I was about to disclose the Taobao
incident when a magazine in Guangzhou preempted
it. Of course the article was quite exaggerated.
I thoroughly analyzed the whole situation and
found that the real problem was with Taobao's senior
management. The Internet developed so fast that
we neglected Alibabas strict training system in our
basic process of recruitment and training. At that
time I felt it was really hard to run a small business,
so I offered free services. Actually I offered free
services three times. The purpose of the first time
was not to beat others; it was because we had no clue
about the business model and did not know whether
what we offered was useful or not. Therefore, the
starting point was to explore and define a model.
Later I said we would have to charge for the
service in five years, but then came the financial
crisis. Ok, lets keep it free. After offering free
services a few times, the industry reached RMB700
billion in that year. In a RMB700 billion free
market, it is natural that you have all kinds of
people. We desperately needed people, so all types
of job candidates were introduced by employees, or
recruited as interns.
We can only be protected by a set of

core values
Jack Ma: It was really scary, what should we
do? I told my colleagues that this had to be handled
seriously. However, nobody is perfect. It was really
a social problem, not just an issue with us. The most
important thing is to cultivate our immunity, the core
of which is our values, our systems, and our interests.
Under this circumstance we set up the Integrity
Department with six employees. Probably no other
company in China has an integrity department.
Jack Ma:Our integrity department is very
efficient. What we want is not a fire brigade but a
fire station to fundamentally solve both technical
and system problems. It is not difficult to solve

system problems. We adopt an interlink assurance
policy that binds supervisors and subordinates in
the recruitment process, meaning that today I am
your boss, so I am accountable for what you do, and
I shall shoulder responsibility together with you if
you do something wrong. I request my direct reports
to tell me the truth. If they hide the truth from me, I
would be inculpated if anything goes wrong.
I also observe people when I talk to them. If
I find that someone has something in his hands,
something must be wrong. This is what a "sensing
officer" does. If someone does not look into my eyes,
he is either not happy with me or hiding something
from me. I would have a chat or a drink with him.
If I cannot see the problem, then it is my problem,
using the wrong people or neglecting my supervisory
duty, and my boss has to bear the responsibility
too. This is the first level of interlink assurance.
Otherwise everybody would say they are not aware
of the issue, and it would always be someone elses
responsibility. I want to hold everybody accountable.
Second, each customer complaint is
investigated. Competition between customers is
cutthroat. If we all sell tea, and you take bribes from
a seller, others will blow the whistle. Once we find
out there was bribery involved with a shop, it will be
closed forever and can never re-enter the Taobao and
Alibaba system. Their reputation is ruined, which is
a terrible thing for many people.
Regarding whistle blowing, if one of your
employees receives a report letter, the shop will
be closed if the claims are found to be true. So the
briber is also afraid, as he knows that many people
can blow the whistle. If your employee does it,
other employees can report it; if you give money,
your employees would definitely know, and if they
report it, your shop will be closed. Thats why I deal
with the source. Our interlink assurance system, our
cultural system, and technical system all support
our efforts. We have hidden lines encrypted in all
our programs that keep track of everything, just
like leaving footprints in the snow. Once I suspect
17
you, I will definitely chase you no matter how far

you run and bring you back to jail. By this I am
telling employees that even if you have taken the
money, you would not dare to spend it as you would
fear getting caught. This is how we operate six
people, reporting with real names, and immediately
investigating reports. Reporting with real names is a
commitment.
I feel that this system is working well. Of course
we are still improving it. Meanwhile, we resumed
our recruitment. Starting from last year, I am most
proud of the change in the company's recruitment
budget. When we were planning headcounts at the
beginning of the year, I asked how many new hires we
were aiming for, as we aimed to double our revenue.
They told me we needed additional headcount of
7,800, and at a minimum our new headcount could
not be fewer than 6,000. I told them I disagree. They
asked how many I thought would be appropriate.
I said 200 people. The response was that it was
absolutely not possible. Then I said it must be 200;
if we had one extra headcount, all the managing staff
would have zero year-end bonuses. Three people do
five peoples job and get four peoples pay. I said I
had been listening to them in the past five years and
we had recruited so many people, but how many of
these people were really necessary for our future
development? They kept saying 200 people would
not do.
But last year we reduced 600 heads and
doubled our revenues! We achieved RMB19 billion
in sales with a reduction of 600 employees. Now
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
to eat the rabbits. So now we have only 200 people.
And there is something interesting in the managing
of the company now. For example, if we had three
people and doubled our revenues. As we become
more efficient at our jobs, I will be more demanding.
Adding one headcount (including security guards
and cleaners) at Taobao will have to be justified
by adding RMB100 million in sales volume. It
is fine if you want to hire more people; you just

need to increase sales by RMB100 million for an
extra headcount. And this year, I will increase it to
RMB140 million for an extra headcount.
So you can see that we dont have to budget
our headcount; it is automatically linked with sales
turnover: year before last it was RMB100 million for
an extra account, last year was RMB120 million, and
this year is RMB140 million. You want to add one
person, just increase your sales by RMB140 million.
No need to talk to me. I'd be happy if you want to
hire 1,000 more people. It is really your call. Now
with upright force growing and evil trends declining,
the problem is solved.
From the perspective of management, problems
are inevitable as long as there are people and
organizations. These problems are not necessarily
bad. When the water is too clear, there will be no fish
in the pond. We are in such a social environment,
and I get to understand many things through my
experience of handling those incidents. It all boils
down to whether you are willing to challenge,
whether you are willing to take responsibility, and
whether you are willing to sacrifice yourself for
the future. I have never felt ashamed of myself; I
show my wounds to people, not to you but to my
employees, and I hope they will remember what
I have done in the history of Alibaba. Perhaps my
employees will ask our CEO in the future: Jack Ma
did this, so why cant you? As I said this year, if
George Washington, the first president of the United
States could retire, so can I.
Weiying Zhang: By retire do you mean your

reassignment as the groups chairman on May 10?
Jack Ma: Yes. I will have three missions. The
first is regarding Alibabas current influence. Today,
Alibaba has exceeded everybodys expectation. It has
influenced peoples consumption styles, production
and manufacturing styles, and also lifestyles. Its
impact on retail and the entire future of mechanisms
and ecosystems will keep increasing. If I were just
18
a CEO, I would operate the company following the

corporate logic. But as the chairman I must look at
the company from a higher level, as I must ensure
that the company keeps abreast with societys
progress.
Economists like Zhang Weiying do not have the
tools to change the world, so you can only influence
the world through speeches and writings, while I
have the real means and tools, but I am not able to
speak out like you.
Xiao-Ping Chen: You change the world with

your actions.
Jack Ma: Thats true. Some people say that
Jack Ma does not want to be responsible. The truth
is, I have many responsibilities on my shoulders,
but I must keep quiet. My beliefs tell me to map out
my strategies from a national and global standpoint.
My second mission is to build a talent training base,
and to build our culture. The third is charity work.
What is charity work to Alibaba? It's waking up the
kindness. If you have kindness, your products will be
good, and your kindness will affect others. Alibaba
does charity work; our existence contributes to the
employment of 10 million Chinese people and the
survival of over 10 million small businesses. How
we do things will affect what a countless number of
households purchase; therefore products and services
must come from kindness. I told my colleagues to do
the right thing and dont make me to have to come
back!
I have my own life. The more enjoyable my
life is, the happier you are, and the more peaceful
my heart will feel. If I am irritated, you will be
even more so. A companys first founder generation
should have a good life so that employees wont
complain in the future. Those understandings are
related to human nature, Buddhism, Taoism, and
Confucianism, which I hope will all be practiced.
Xiao-Ping Chen: In all these years running

the business, have you ever encountered conflicts
between personal relationship and business

rationality? Looking back, how do you think
the conflicts between relationship, loyalty, and
rationality should be handled?
Jack Ma: This is a rather complicated question.
Without feelings we are just machines, and it is
natural that people will get close to one another
eventually. But if we focus too much on human
relationships, we cannot form an organization, or
a company that can scale and impact the society;
instead, we can only impact ourselves. In general we
are doing fine in this respect, including the departure
of some founding partners, including my wife. She
was the no. 2 employee of Alibaba. But we had no
choice.
But leaving does not necessarily mean the
relationship is ruined. My wife can be mad at me,
but I am not angry with her, as I know that she does
not work for me today but works for the mission
we committed to years ago. As a CEO, I try to stick
to the commitment. I told everybody that they can
hate me, but that will not make me give up my
commitment.
Xiao-Ping Chen: Do you think they hate you?
Jack Ma: No, it is not possible, they may

just feel sad and lost. In the process of change,
some people may be unable to adapt. Unlike other
companies, I would not reassign them to run another
department or another company just to make them
feel better.
Xiao-Ping Chen: So you dont do that.
Jack Ma: Right. If you do that, you are just

covering the existing problem with another one, and
then you will have more and more problems. I have
learned many hard lessons, in 2003, for example.
So I wont allow this to happen now. I feel that is
my responsibility. You can hate me, but dont hate
this company. The reason that I choose to retire
19
at the age of 48 is that I want to phase out myself

before someone else phases me out. This is how I
understand myself.
Q Xiao-Ping Chen: Lastly, would you like to share

your best experiences in starting and managing the
business?
people who excel and entrusting people with the

power to make decisions are two different levels.
We have people who are in their 70s but still like
to make judgments and decisions by themselves. It
makes them feel accomplished, but at the same time,
they have deprived others of something they want
to do. You have the power and do others have to kill
you to get the chance to make decisions? You can
have your own life only if you entrust people with
the rights to make decisions, life is important, so is
happiness. I think as Chinese enterprises improve,
more people will focus on charity work. Bill Gates
called me the other day and asked me to pledge
donations.
Jack Ma: My experience in starting a business

is to start with things that make you happy, and also
start with the easiest rather than the most difficult
things. My management philosophy is use people
with doubt and use those who you doubt rather
than trust who you choose and do not pick who you
doubt. From a management perspective, I believe
in letting people judge instead of asking them to do
things.
Q Xiao-Ping Chen: Really? Tell us about your

thoughts on this topic.
Q Xiao-Ping Chen: What do you mean by letting

people judge?
The Significance and Means of

Charity
Jack Ma: I mean making judgments. Starting

up a business is to entrust people who excel, for
example, you would ask Zhang Weiying to do
things because you think the his ideas are great;
whereas entrusting people with the power to make
decisions means you would let Zhang Weiying
to make decisions because you believe he is
more capable than yourself. These are two totally
different mindsets. To trust who you choose and
not pick who you doubt is very basic, however,
using people with doubt focuses more on a persons
capability than his/her integrity. In Chinese, the
word trust consists of two parts trust and entrust;
I believe in Zhang Weiying, but I will not ask him
to take the president position of a multi-national
company. Therefore, Ive always believed that we
should use people with doubt and use those who
you doubt. Let different types of people give it a
try. This may work. It turns out many talents are
discovered by those who doubt.
Management is a long-term process, entrusting
Jack Ma: Well, Gates came to Beijing for his

all-out donation campaign. I went there and met with
them. I asked Warren Buffett about his age. He said
he was in his 80s. And I asked him why he didn't
donate in his 40s. I told him that I would donate as
well if I were in my 80s.
Q
age.
Xiao-Ping Chen: But Gates donated at an early
Jack Ma: Yes, but the issues in China are much

more complicated. You cant see the real China in
Beijing, Shanghai and Guangzhou, you should go
to Qinghai. I absolutely agree that today's business
leaders should assume social responsibility, and
many of them have done that. Meanwhile it is really
important for us to think about this issue. We have
not developed a clear understanding about what
money is and how to manage donations. Gates
has his foundation to manage donations; but which
foundation can we donate to in China?
20
Xiao-Ping Chen: That makes sense to me.
Jack Ma: In addition, I told them that they

should go to London and Japan to talk to the rich
people to donate. Why did they come to China only?
Xiao-Ping Chen: But the Russians donated.
Jack Ma: Gates called me again a couple of

days ago. He said if I do this, it will send a strong
message to China. I believe what we really need
is to build up a charity system. The amount of
donation wont matter as long as we have a sound
charity mechanism. I don't think merely donating
can actually solve the problems, and currently the
most urgent problem is to awaken people's social
consciousness.
Im doing charity in China in my own way.
So I told Gates that we could cooperate in the
future. Even if we can't, it's still OK with me, for I
will use my way to do good things for the Chinese
society.

Weiying Zhang: A recent survey in the U.S.

found that people who believed in the market donate
more money and do more volunteer work than those
who believed in the government. One explanation
is that those who trust the free market and free
enterprise feel more obligated to help others.
Publicizing your good deeds is not being a real
philanthropist, and worrying about revealing your
bad deeds is true evil. We do good deeds to make
others happy. Nowadays, in China, many are forced
to donate rather than it being a voluntary act.
Jack Ma: I do things to make others happy, but I
won't brag around about it. Chinas prosperity could
not be achieved without the hard work of countless
entrepreneurs, and that's our biggest contribution to
the Chinese society.
Xiao-Ping Chen: We can only choose our way to

contribute to the society. Jack, thank you for sharing
your stories and wisdom, this is certainly another
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

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Executive Perspectives

August 2013 www.IACMR.org

Company Culture and Values Are the

An interview with Jack Ma, Founder and Executive

Chairman of Alibaba Group

Xiao-Ping Chen, University of Washington

About Alibaba Group

International Association for Chinese Management Research

International Association for Chinese Management Research

August 2013 www.IACMR.org

August 2013 www.IACMR.org

In February 2013, Yabuli was still covered

Xiao-Ping Chen: Hi, Jack, it has been a long time

International Association for Chinese Management Research

learn from America; you learn from Japan. But you

Xiao-Ping Chen: Would you expand more

To see people surpass me is my

August 2013 www.IACMR.org

always wish their students to surpass them. That is

Xiao-Ping Chen: You were so brave! I was in

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

The leader carries responsibility for

Xiao-Ping Chen: Your point of view is

August 2013 www.IACMR.org

Jack Ma: You can tell that I do not like

possibly use them to make good judgments? What

A culture of gratefulness, sharing

Xiao-Ping Chen: What exactly is the moral

Xiao-Ping Chen: Why?

Jack Ma: Because we lack the necessary

August 2013 www.IACMR.org

what we really appreciate. After all, everybody is

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

International Association for Chinese Management Research

meeting two years ago and found that many meeting

Xiao-Ping Chen: People often say work

August 2013 www.IACMR.org

someone suggested that I give a lecture to teach our

Xiao-Ping Chen: Thats my basic view too. Life

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

International Association for Chinese Management Research

Xiao-Ping Chen: Well, thats because you have

Xiao-Ping Chen: Its uncommon in the business

August 2013 www.IACMR.org

The successor must come from

Xiao-Ping Chen: Do you mean that the CEO

Weiying Zhang: Did you really make that

International Association for Chinese Management Research

Xiao-Ping Chen: Great, the following question

The time to repair a roof is when the

Xiao-Ping Chen: Let others to celebrate and you

August 2013 www.IACMR.org

of a CEO should be determined by the number of

CEOs must have vision, breadth of

Jack Ma: Right, and thats the course the

Xiao-Ping Chen: Now you have decided to step

Weiying Zhang: Is it possible that if you choose

Xiao-Ping Chen: So you were training their

Xiao-Ping Chen: How many men in your

Jonathan Lu Zhaoxi was appointed CEO of Alibaba Group

International Association for Chinese Management Research

August 2013 www.IACMR.org

Xiao-Ping Chen: To train them.

Jack Ma: Right. As a teacher, how can you