"What is really terrible is not knowing mistakes, not admitting mistakes, and not correcting mistakes. ”
Text: "Chinese Entrepreneur" reporter Deng Shuanglin
Editor|Li Wei
Header image source: Visual China
Following a "reflective dialogue" between Joe Tsai and Norway's sovereign wealth fund, this morning, Jack Ma shared a rare long article on Alibaba's intranet. He said: "In the past few days, many people have sent me a video of Joe (Joe Tsai) being interviewed, and some people have told me that this video is a big confession of our past mistakes. Yes. Thanks to Joe's courage and responsibility, there are no mistakes that are not terrible, no one does not make mistakes, what is really terrible is not knowing mistakes, not admitting mistakes, and not correcting mistakes. ”
This is the first time in five years since Jack Ma's retirement that he has reflected on Alibaba's past.
He affirmed the effectiveness of the new management's changes: "In the past year, Tsai Chongxin and Wu Yongming have led Alibaba to carry out a series of changes with an eye to the future with admirable courage and wisdom. He believes that the new management "faces the problems and faces the future, believes in the young people, fully empowers the young team, and makes decisive and clear trade-offs about what we want and what we don't want."
Jack Ma also acknowledged Alibaba's problems, such as the illness of large companies. He believes that the core change of Alibaba in the past year is not to catch up with KPIs, but to recognize itself and return to the track of customer value. By operating on the disease of large companies, Ali has returned to the supremacy of efficiency and the market, and has become simple and agile.
Tsai Chongxin has reviewed similar issues in interviews before. Talking about the challenges facing Alibaba today, Tsai said: "Alibaba is lagging behind because we have forgotten who our real customers are. Our customers are users who use our app to shop, and we don't give them the best experience. In a way, we're kind of self-defeating. In order to solve this problem, Taotian reorganized internally and found a new CEO, Wu Yongming.
In the past few years, Pinduoduo has been pressing Ali step by step with its ultra-high human efficiency and attention to buyers. According to the latest financial report, Pinduoduo Group's revenue in 2023 will be 247.6 billion yuan, an increase of 90% over the previous year, while Taotian Group's growth rate is weaker than the growth rate of China's e-commerce market. The proud e-commerce basic market no longer has an absolute advantage, which is Alibaba's biggest risk point.
On November 29, 2023, the market value of Pinduoduo surpassed Ali for the first time, and Ali's intranet wailed. At that time, an employee posted pessimistically: "That inconspicuous-looking slash is about to become a big brother." "In the past year, from the announcement of the spin-off to the cessation of the IPO, Alibaba employees have been in the midst of a storm. After the market value was overtaken by Pinduoduo, the morale of employees was affected again, which was more serious than business problems for Jack Ma, who has always attached importance to the organization.
Source: Visual China
The purpose of Jack Ma and Tsai Chongxin's rotation is also to boost employee morale and give the market confidence. Ma Yun emphasized many times in the article that in the midst of many doubts and various pressures inside and outside, a strong and brave Ali team is being born.
"The change and reorganization of the organization involves every employee, thank you to all Ali people for their dedication and responsibility this year, and thank you and your family for choosing to believe and persist in the continuous changes and even the decision-making changes of whether to IPO or not. Jack Ma said.
He also judged Alibaba's future opportunities: "The time span of three or five years is like a century for the Internet field, which is enough to undergo earth-shaking changes.
In September this year, Ma Yun is about to turn 60 years old and enter the stage of "60 and ear smooth", and the entrepreneur who was once stubborn and freewheeling may be more able to listen to different suggestions.
As of press time, the post with the signature "Feng Qingyang" (Ma Yun's nickname) has been commented on nearly 2,000 comments on Alibaba's intranet, and many Ali employees were encouraged to shout "Ali come on!"
Get back on the customer value track
Both Jack Ma and Joe Tsai have recently reflected on the issue of "customer value".
In the past, Taotian has always emphasized merchant services and consumption upgrades, but ignored the user experience, and this wrong decision has allowed the rise of Pinduoduo.
Although Taotian has realized the importance of making low prices two years ago, from the perspective of the implementation of the strategy, its determination to do low prices is still not thorough enough, and at most it is a defensive action. Taote, which was born specifically to fight against Pinduoduo, ended up withdrawing from the historical stage and moving back to Taobao in a low-key manner.
As for the solution to the problem, Tsai Chongxin bluntly said in the interview that the first thing Ali did was to admit mistakes - he may not have paid attention to user experience in the past, the second thing was to reorganize people and change the organizational structure that fits the strategy, and then to integrate the company's direction into the organizational structure.
Tsai attributes the cause of these mistakes to "human nature" because people don't like to admit mistakes. Really good managers have this perception, have the ability to self-reflect, and realize that they may not be doing the right thing and need to change, but it's human nature not to do so.
Jack Ma also admitted that "Ali was wrong". He apparently realized this problem earlier - last year, Jack Ma proposed in an internal meeting that Ali should "return to Taobao, return to users, and return to the Internet", and since then, Alibaba's changes and decisions have almost revolved around three returns.
Under the clear instruction of the founder, Taotian began to use it as the main battlefield to fight for low prices, and the specific methods were to streamline marketing, increase investment in content, and demand-side reform.
According to 36Kr, at the internal communication meeting at the beginning of this year, Alibaba Group CEO Wu Yongming also proposed to regain the market, return to shelf e-commerce, improve user experience, and propose to achieve these goals through "good goods, good prices, and good services". On the other hand, Taotian began to pay attention to user experience, and invested in launching many new services. Not only did it follow Pinduoduo's lead in launching a refund-only service, but it also merged part of the rookie team into Taotian, customized a free return and shipping service for 88VIP, and launched a 0 yuan purchase for clothing categories.
Ma Yun believes that in the past 25 years, Ali people have created many successes, many innovations and leads, and have experienced countless mistakes, and will make mistakes all the way in the next 77 years.
"To face problems calmly is not to deny the past, but to responsibly find the way to the future. Don't complain about the past, don't complain about others, the times have changed, we must keep up with the times, not only have the courage to admit and correct yesterday's problems in time, but also face the future and reform, which is the reason why we continue to move forward. Jack Ma emphasized.
Ma Yun said that Alibaba's innovation is not to change others, but to change ourselves, and our innovation is never to surpass our opponents, but to catch up with the future.
Tear down and rebuild
Many people in the industry have pointed out to "Chinese Entrepreneur" that in the past year, under the stormy changes of Alibaba, the most remarkable part is not Alibaba's organizational design or business development, but the huge action force of tearing down and rebuilding, after all, "the ship is difficult to turn around".
Jack Ma has always had a strong sense of crisis, and he often said that in the field of technology, if an industry-leading company is left behind, it will only be a year or two, and "Ali's past methodologies that relied on success may not be applicable, and should be quickly changed."
On September 10, 2019, 55-year-old Jack Ma announced his retirement. But since he left, Ali has undergone a series of earth-shaking changes, Ali's share price has fallen for three consecutive years, and now its market value is less than a quarter from its peak, and it has even been overtaken by Pinduoduo several times.
In March last year, Jack Ma appeared in Hangzhou, and Ali began a series of organizational shocks.
On March 28, 2023, two days after Jack Ma appeared in Hangzhou, Alibaba officially launched the "1+6+N" organizational spin-off, claiming that qualified business groups and companies have the possibility of independent financing and listing in the future.
It is understandable that Ali's management made this decision - when Ali's organization becomes larger and larger, and the business becomes more and more redundant, the ills of large companies will follow. After the spin-off, the business is disintegrated into small units, which has the opportunity to stimulate entrepreneurial vitality and even release valuation.
Watchmaker: Xiao Li
However, the problem does not seem to be as simple as imagined, especially the complexity of the capital market environment.
In the past year, Hema Financing, which plans to take the lead in going public, has been forced to cancel its IPO plan, and even repeatedly reported that it will be sold; Aliyun, which is completely independent, has returned to Alibaba's parent body in just a few months; and Cainiao, which has submitted a prospectus, has also announced that it will wait for a better time to go public.
Now it seems that Alibaba's new strategy has a clear purpose: since the spin-off cannot achieve the goal, then cut heavy assets, focus on core business, and travel lightly.
Previously, some professionals analyzed to "China Entrepreneur" that Alibaba's diversification logic should not be based on shared resources, but on consistent core competitiveness.
At present, it seems that Alibaba's change direction is indeed the same, and Alibaba, who has engaged in "diversification" in the Daniel Zhang era, will focus on core e-commerce and cloud business in the future.
In terms of personnel power, Ali also successively "took fierce medicine" - Daniel Zhang abdicated, and Ma Yun's old subordinates Cai Chongxin and Wu Yongming returned. Yu Yongfu, Hou Yi and many other "old faces" have stepped down one after another, and the young young Zhuangliang will gradually come to the forefront.
A team that makes flexible decisions is especially important in times of rapid development of new technologies. Ali, which has more than 200,000 people, has significantly more "big company diseases" and a little less "wolf nature" compared with the entrepreneurial era.
Shi Weilei, professor of strategic management at Cheung Kong Graduate School of Business and academic director of Relay Changjiang and Changjiang Online, once pointed out to China Entrepreneur that Alibaba is an innovation-driven company, and if large companies have too many problems and the decision-making chain is disjointed, it will actually have a negative impact on innovation capabilities.
Ali has reached a stage where he must face problems and change head-on.
Looking back on the history of Alibaba's development, we have seized the wave of technology to achieve Alibaba-when Internet technology was popularized, the "Eighteen Arhats" under the leadership of Jack Ma seized the opportunity to found Alibaba and write a magnificent legend; in the era of mobile Internet, Alibaba's "All in Wireless" strategy was successful.
As one of China's most important technology companies, Alibaba must seize the opportunities brought by the next Internet transformation.
Jack Ma's return is also important to this, as he said in the article: "In the face of this era of great technological change, the time span of three or five years is like a century for the Internet field, which is enough to undergo earth-shaking changes...... The era of AI has just arrived, and it's just the beginning, so it's time for us!"