Case study on Jack Ma: Lessons in leadership [Source: Textbook, pp. 396-400]

Jack Ma was born Ma Yun in Hangzhou, China to traditional musicianstoryteller parents in

1964. From a young age, Ma had a penchant for studying English and would ride his pushbike every morning to a hotel near his parents house to converse and practise English with

foreigners frequenting the hotel. It was one of these visitors who nicknamed him Jack.

After several unsuccessful attempts to enter university, he finally managed to graduate in

1988 with a bachelors degree in English, and he taught English as a lecturer for a few years.

Jack Ma was fascinated with the Internet and while searching for the word beer with his

friends in the United States, was disappointed to find no information about China. With help

from his friends, he built a rather crude website which did include information about China

and felt that this would connect his country to the rest of the world. He was quoted as saying

the day we got connected to the Web, I invited friends and TV people over to my house

and, on a very slow dial-up connection, we waited three and a half hours and got half a page

We drank, watched TV and played cards, waiting. But I was so proud. I proved [to my house

guests that] the Internet existed. Mas A-ha! moment was his realisation of the power of

the Internet and, mesmerised by its limitless potential, he started a business, China Pages,

with his friends, dedicated to creating websites for companies.

Jack Mas love affair with the Internet continued and he founded Alibaba in his apartment

with a group of 18 friends in 1999. His charismatic and visionary style of leadership was able

to attract millions of dollars in international venture capital, and he used the funding to

improve Chinas domestic e-commerce market and develop an e-commerce platform for

small and medium Chinese enterprises.

Wanting to improve the global e-commerce system, Ma founded Taobao Marketplace, Alipay,

AliMama and Lynx. In 2013, Mas company Alibaba sought an initial public offering (IPO) in

the United States after Hong Kong regulators had disagreements with it. Alibaba was the

largest IPO in history, raising US$25 billion dollars. Taobao now features a billion products

and is one of the 20 most visited websites globally. Alibaba accounted for over 60 per cent of

the parcels delivered in China by March 20138 and 80 per cent of the online sales by

September 2014, with sales of more than US$9 billion on Chinas Singles Day in 2014.

Alipay accounts for 50 per cent of all online payment transactions within China.

So how did Ma, often referred to as the grandfather of the Internet in China, a man who has claimed to not know much about computers or email, who claims to have not written a single line of code, and who has not made one sale to a customer found and build the

Alibaba empire (currently worth US$231 billion dollars) in less than 15 years? Well, a lot, if

not all, can be attributed to his unorthodox leadership style and management philosophy.

He did it by blending the best of Western and Eastern technologies, operational practices

and management styles, remarks Michael Zakkour. He adds:

Like Forest Gump, Ma has always seen the world and its possibilities almost as if through the

eyes of a child, believing technology could be magic and life truly a box of chocolates but

one that a person never knows what he will get inside. Successful entrepreneurs do not let

setbacks get them down and they see both whats impossible and possible, but the difference is that they focus only on the possible.

Ma also understood that one need not reinvent the wheel. He realised that the best way to

beat eBay was to compete against it fair and square but added his own twist to Taobao in

China. The Chinese value relationships, and trust is of paramount importance. Fully aware of

Chinese culture and philosophy, Ma felt that the Taobao interface needed a personal touch,

which would allow the establishment of trust between buyers and sellers who do not know

each other. Thus the real-time chat function on Taobao, which allowed for transactions to

become personal. He also explained how trust was a big factor in the rollout of Alipay:

Let me tell you how we created Alipay. It was a big decision. The first 3 to 4 years, Alibaba was just a marketplace for information. No bank wanted to help, convinced that online trade

would never work in China. So I didnt know what to do. Launching a financial payment system

would be against financial laws (because you need a license). But if I didnt do it e-commerce

would go nowhere. Then I went to Davos, and listened to a leadership discussion

Leadership is about responsibility and trust, I heard. Thats when I called my friends and

colleagues in my apartment. I said: Do it. Now. Immediately. If something goes wrong, if

somebody is sent to prison, Jack Ma will go to prison. Because it is important for China and

the world to build a trust system.

Mas readiness to make fun of himself and speak his mind contrasts with the strict,

conservative Chinese-style leadership. He is energetic, approachable, and outspoken and has

built a culture of loyalty, participation, and fun. He is often seen singing karaoke with

employees, addresses management in outlandish suits and colourful outfits, and holds

weekend fun retreats for 15,000 employees to foster Alibabas cultural values.15 Michael

Zakkour notes that Ma has created an atmosphere such that Alibaba employees treat him

like a combination of father figure, inspirational guru and band leader. The result is a super

loyal, hardworking group of executives, managers and employees who would follow Ma to

the ends of the Earth. He adds that None of this was an accident. Ma spent years studying

Western culture, management concepts and successful businesses, took what he needed and

left the rest. He combined that with his love and understanding of Chinas culture and

consumption habits to create an all-encompassing technology success that is positioned to

become the first truly global Chinese brand.

Another example of how Ma challenged the traditional patriarchal management hierarchy in

China is by employing and empowering women in Alibaba. He explained that one of the

secrets of Alibabas success was attributed to equal representation by women in the

workforce. Alibabas staff currently comprises 47 per cent women, with 24 per cent female

senior management executives. This is unusual not just in China, but also by global

standards. An article in the New York Times notes that women still make up only 16 per cent

of directors at Fortune 500 companies, 4 per cent of chief executives at Standard & Poors

500 companies and 10 per cent of chief financial officers at Standard & Poors 500

companies. We have a woman CEO, CFO, Chief People Officer If you want to win in the

21st century, you have to make sure that you empower people. Then you will be successful. I

find that women think about the others more than they think about themselves, says Ma,

implying that women employees and managers at varying levels in the organisation are

imperative for the business to succeed. This remark was made with sincerity, passion, and

gusto, in an interview with Charlie Rose in 2015, and is not reminiscent of any other business

leader of a multibillion-dollar global business conglomerate.

Jack Ma takes the maxim the customer is always right a step further and believes that

businesses should allow consumers to succeed. To him, the important question is not How

can we get our customers to buy what we make? but, rather, What are the unmet needs of

our customer that we can satisfy? This total customer focus has been one of the central

underpinnings of Mas and Alibabas corporate philosophy. Ma even recounts that When we

developed Alipay, everybody told me this is the most stupid idea you ever had. He adds, But

I dont care if an idea is stupid or not. As long as people use it. Now we have 800 million people

using Alipay. How to make our customers succeed, that is our philosophy. His leadership

style has also been described as crazy. When I first appeared in Time Magazine, they called

me Crazy Jack. I think crazy is good. We are crazy but we are not stupid! We know what we

are doing.

It is a no-brainer that Ma is a risk-taker. He has been quite ruthless in building and expanding

his business empire and is not afraid to take on well-established global business. Take eBay,

for example: in 2003, it was had a clear monopoly in China with an 80 per cent share of all ecommerce there. However, Ma was quietly confident of taking on and beating the American

giant at its own game: eBay is a shark in the ocean, he said. We are a crocodile in the

Yangtze River. If we fight in the ocean, we will lose. But if we fight in the river, we will win. He ordered Alibabas Taobao division to slash its fees for local firms using the service, losing

heavily in this trade-off. People once again said he was crazy, but for Ma this was a calculated

risk. And it soon paid off. Alibaba kept eating into eBays market share in China for three years,

at which point eBay decided to pack up and leave China altogether. Foresight and bravado

indeed!

Jack Ma is an enigma and beneath his extraordinary success lies the passion, hard work, and

resilience to realise his vision of taking on the big challenges and seeing them through. He

believes in lifelong learning and philanthropy and from his humble beginnings as an English

teacher to becoming a beloved entrepreneur and management guru, he still remains true to

his values. He expects Alibaba, which is very young, to survive till the twenty-second century

at least: Since our founding in 1999, we have helped millions of small businesses to achieve

a brighter future, and we hope to do this for at least 102 years. Given the complexity and

short life-span of IT-intensive industries and the ever-changing nature of the global business

environment, it is difficult to say whether Alibaba will live on for that long. However, two

things are sure first, that Alibaba will change with the changing times, ensuring that

consumers preferences are prioritised above everything else; and second, that Jack Mas

legacy will live on for a long time to come.

Case questions:

1. Apply the GLOBE leadership dimensions to critically examine the leadership style(s) of Jack Ma.

2. Identify two other inspirational leaders from any well-established organisations of your choice. Compare and contrast their leadership style(s) to that of Jack Ma.

3. Based on the case study, identify Jack Mas strengths and weaknesses as a leader. As a global leader, how would you overcome Jack Mas weaknesses and prepare yourself on his strengths in your leadership style(s)?

4. In reference to the three capitals (i.e. intellectual, psychological and social) constituting a global mindset, critically evaluate to what extent Jack Ma possesses a global mindset.