Jack Ma, who co-founded the world’s largest e-commerce platform, will unveil a succession strategy next week, part of a management plan 10 years in the making for grooming a generation of younger executives to take over the reins of Asia’s most valuable company.
Ma, the executive chairman of Alibaba Group Holding and public face of the technology juggernaut, will unveil the plan on September 10 on his 54th birthday.
An Alibaba spokesman said Ma remains the company’s executive chairman and will provide transition plans over a significant period of time, contrary to a New York Times article that said he was “stepping down” to “retire.” The Times story was taken out of context, and factually wrong, the spokesman said.
According to Alibaba’s annual report filed with the US Securities and Exchange Commission, Ma is a lifetime member of the Alibaba Partnership, a group of 36 senior managers who are responsible for maintaining the mission and culture of Alibaba.
“I sat down with our senior executives 10 years ago, and asked what Alibaba would do without me,” Ma said in an interview with the South China Morning Post, which Alibaba owns. “I’m very proud that Alibaba now has the structure, corporate culture, governance and system for grooming talent that allows me to step away without causing disruption.”
Known as Ma Yun in mainland China, he is scheduled to be in Russia next week to formalise Alibaba’s venture with Mail.ru, the internet company owned by Russian tycoon Alisher Usmanov and sovereign wealth fund Russian Direct Investment Fund (RDIF). Ma will also speak at the company’s investor’s day in mid September.
More travelling is scheduled for the businessman, including a trip to Cape Town, where Ma has promised to fulfil his pledge to help South African President Cyril Ramaphosa set up a digital training centre to nurture entrepreneurship among the youth.
The succession plan would make Alibaba one of the very few Asian companies that consciously detaches its corporate structure and daily operations from the founder. The Hangzhou-based company, which began as an e-commerce marketplace founded with US$60,000, has taken less than two decades to expand into a US$420 billion juggernaut in online shopping, cashless payments, cloud computing, artificial intelligence and even Hollywood movies. Alibaba has more than 86,000 employees on staff.
Ma is one of China’s wealthiest men, with his net worth estimated at US$40 billion by the Bloomberg Billionaires Index.
A former English teacher before establishing Alibaba with 17 partners, Ma is known by colleagues as “Teacher Ma.”
He also carries the nom de guerre of fengqingyang - keeping with Alibaba’s tradition of using nicknames from the wuxia genre of Chinese literature - after the hermit master swordsman of one of Louis Cha’s epics.
He has mostly detached himself from operational matters and the daily management of his sprawling business empire since stepping down as chief executive officer in 2013, dedicating more of his time and wealth to philanthropy through the Jack Ma Foundation, following in the footsteps of Microsoft Corp’s founder Bill Gates.
“There are a lot of things I can learn from Bill Gates. I can never be as rich, but one thing I can do better is to retire earlier,” Ma said during an interview last week with Bloomberg Television. “I think some day, and soon, I’ll go back to teaching. This is something I think I can do much better than being CEO of Alibaba.”
Succession planning for a company barely out of its teens underscores its founders’ commitment of handing down a corporate structure that can outlast them. That contrasts with the tycoons of Asia, where 85 per cent of billionaires face a shift from first-generation founders to their successors, according to a 2016 UBS report that tracked 1,400 billionaires over 20 years.
As a general rule, research indicates there is roughly a 30 per cent survival rate for family businesses in the second generation, deteriorating to 12 per cent in the third. Only 3 to 4 per cent usually make it to the fourth generation and beyond, UBS said.
Since handing off his CEO title to Daniel Zhang, Ma has spent 40 per cent of the year travelling the globe to preach about the virtues of globalisation and inter-connectedness, the potential of technology to improve lives, and about philanthropy.
“There are so many things that I want to devote my time to - education, the environment, philanthropy,” Ma said, denying that he’s thinking of handing over the reins at a time when the business environment has soured. “Anybody who knows me knows I embrace the future. This is not about retiring, stepping away, or backing off. This is a systematic plan.”
Alibaba’s sprawling businesses are now managed by a dozen senior managers: Zhang as CEO; Simon Hu is president of the cloud computing business; Trudy Dai runs the business-to-business e-commerce marketplace; Yang Weidong manages digital media and entertainment; Jiang Fan runs Taobao, while Jet Jing runs Tmall.