Method in the madness of the Alibaba cult
A small group of committed revolutionaries spend years in the wilderness, committed to a utopian theory of radical change with themselves as its agents. They create an organisation where fanatical loyalty is most prized, with arcane rituals, purges, and even funny hats.
It is not the Chinese Communist party, this is Alibaba Group, which accounts for more-than three quarters of China’s retail ecommerce. It credits its awesome growth over the past 15 years to a uniquely personal corporate culture and the visionary leadership of founder Jack Ma.
“Alibaba reminds me of the Chinese Communist party in its early years,” said Li Zhihui, who used to work for Alibaba and has since written a book about the company’s management style. “They are a group of second-rate professionals doing a first-rate job.”
As Alibaba prepares for what is likely to be a record-breaking initial public offering in New York this month, both admirers and detractors alike credit the creativity and drive that got the company this far to Alibaba’s somewhat cult-like esprit de corps – and the quirky Mr Ma.
On Friday, the company announced it would seek a valuation of up to $163bn as it published a regulatory filing ahead of a global roadshow that starts with one-on-one meetings and a lunch for hundreds of would-be investors in New York on Monday.
The price range set out in the document of $60-$66 per share would make Alibaba the largest technology or internet IPO yet. Strong investor demand could make it the largest from any sector.
In a letter to investors, Mr Ma signalled that his messianic ambitions spread far beyond China. “lin the past decade, we measured ourselves by how much we changed China. In the future, we will be judged by how much progress we bring to the world,” he wrote.
Potential investors will have to decide what stomach they have for Alibaba’s quirks – its governance structure gives virtually all power to 27 board members, and very little to ordinary shareholders. They will also have to have a high tolerance for sometimes bizarre antics by senior managers, and a corporate culture that is more colourful than its world-spanning peers like Google and Facebook.
“Alibaba has a bit too much personality to be a global company just yet,” is the way Mr Li put it. “If we were to merge with, say IBM, it would fall apart within a year, because our values are too radical.”
The Chinese company’s 22,000 employees, known as Aliren or Ali fellows, appear to be fuelled by adrenalin and inspired by Kung Fu novels.
Alibaba employees are encouraged to take Kung Fu nicknames. “When they ran out of names from Kung fu novels, they made up their own,” said Zhang Yi, chief of iMedia, a China based ecommerce consultancy.
Mr Ma created Alibaba 15 years ago with friends in his apartment. Since then, his quirky personality has created headlines and fosters what one former employee calls a “slightly crazy” atmosphere at the company.
Mr Ma practices Kung Fu and dresses in outlandish costumes for the company’s annual Chinese new year festival – one year he was a punk rocker with a silver mohawk, another year he was Snow White, wearing a dress and bonnet.
Last October, he sent an internal message to employees exhorting them to “invade Antarctica” in order to “kill penguins” in their duel with rival internet giant Tencent – whose mascot is a Penguin.
“Alibaba is not a group of civilised gentlemen, or men who nicely play by the rules,” said Mr Li. “They are reckless with ambition, they are radical and aggressive. Everyone walks out of a meeting room beet-red from shouting, that’s how we held meetings – with our voices raised. Its very intense,” he said.
Occasional partial nudity is another distinguishing feature of life at Alibaba. Following Mr Ma’s Penguins message in November, online photos emerged of 300 employees at a team building exercise with their shirts off, being harangued by executives to add “south pole marching army” to their names.
Some outsiders describe Alibaba’s culture as cult-like, prizing crazy antics and fanatical loyalty to Mr Ma. However, most former employees who agreed to speak to the FT said there was method to the madness.
“Corporate culture is still Chinese, [the] appraisal system is that of a Chinese company,” said Jasper Chan, formerly Alibaba’s senior corporate communications manager, who worked for the company from 2007-12. Employees are constantly evaluated by managers on their commitment to six core values: teamwork, integrity, “customer first”, “embrace change”, commitment and passion.
“An employee could have great sales, they could bring in a ton of revenues, but if they don’t score well in core values, they could still lose their job,” she said.
As one rises higher in the organisation the appraisals take on more and more significance. One former employee said that at top executive levels “professional skills are not noted. The first and foremost quality stressed is ‘infinite loyalty to Alibaba and powerful identification with Alibaba’s values’.”
Mr Li said that likening Alibaba to the early Communist party is more than a gimmick. “The two are also alike in that there is firm and common belief. In the very beginning, communists did truly believe in establishing a new and better China, it was like a religion to them. For Alibaba, our belief is that we can each help to make something totally awesome.”