May 20, 2018
If We Build It, They Will Come: An Analysis of Jack Ma’s Leadership
In the 1989 fictional baseball themed film, “Field of Dreams”, the most famous sequence is when the protagonist is inspired by other-worldly voices in his cornfield to build a baseball field. They beckon to him saying “If you build it, they will come”, this is actually a reference to what the biblical God told Noah in the Old Testament. The idea that if you create a just opportunity, then the success of that opportunity is due to you attracting and working with the “right” people is very profound and attractive in today’s business environment. The following paper will be an analysis of Alibaba founder Jack Ma and how he exemplifies this attractive leadership.
Jack Ma, born Ma Yun (1964), is a Chinese internet magnate presently worth $42.34 billion dollars. He is the co-founder and the current executive chairman of the Alibaba Group, a multinational corporation that currently is the world’s largest retailer surpassing the profits of Walmart, Amazon, and eBay combined. The founding of Alibaba, which was basically formed after a recorded speech given by him to 17 friends in 1999, is the most famous and popular Chinese entrepreneurial and leadership case study. Jack Ma continues to be a prolific speaker today building upon those themes he first made in his private speech.
According to Kuchynkova, the personality type of a business leader (especially in regards to certain fields) can have a tremendous impact on their appropriate leadership ability and style (2015). She identified that in regards to management and the Meyer’s Briggs personality test there were four categories of which Jack Ma would fit into the one known as ‘SP’. As a “sensing-perceptive” or “SP”, Jack Ma has the strength of having a strong grounded sense of reality, a talent for observation, being a born negotiator, and a problem solver. Kuchynkova identified that certain industry leader’s corresponded more highly to an effective score. She identified that manufacturing “had the highest effective score whereas service had the lowest effect score” (2015).
Its very easy to just typecast Alibaba as the next eBay 2.0 or something but the reality of their business is that much of its success was based in the rise of Shenzhen, China. Shenzhen is a special economic zone located near Hong Kong that saw extreme and rapid development from the 90s into the present day (Ma, 2018). Essentially, the city is known by Ma and many others around the world as the ‘hardware capital of the world’ this is opposite to Silicon Valley in America which is known ‘software capital of the world’ (Ma, 2018). The reason for this ‘hardware’ moniker is that Shenzen has developed into a major manufacturing center that specializes specifically in electronics hardware. It is said that in Shenzen, that prototyping anything can take 3 hours as opposed to the 3 days necessary to prototype a product in Silicon Valley. Alibaba is very different from Amazon and eBay in that their target consumer wasn’t an individual (Amazon captured the book market first and eBay was about personal negotiated bartering over used products). Instead their business was basically marketing for, connecting, and helping promote Chinese and other South-East Asian manufacturing companies. Kuchynkova basically highlights that the reason manufacturing resonates so deeply with leadership styles is because those “companies have clear and strictly set out operating procedures” (2015).
Jack Ma was an exceptional realist from the start of his career. He basically applied to whatever he could just to play the statistical advantage- he kept doing this until he found massive success in helping manufacturing companies set up their domestic websites in China- the very first presence of the Chinese manufacturing on the internet. Using his negotiation, problem solving skills, and sense of reality Jack Ma identified in 1999 that they could grow their business beyond domestic presence and set up a competitive international storefront. He identified that the only real threat to his business was eBay but they were capable of taking their market share (Ma, 1999). One of the weaknesses with the SP management trait is that it can be unpredictable, impersonal, and risky. Jack Ma is considered a very impersonal person because he’s so driven by his vision, the expansion of Alibibab Group (over the 2000s into the present) into all the subsidiaries that exist today were all spearheaded by unpredictable and very risky initiatives by him.
Among the Big 5 personality traits, Jack Ma tests very strongly in terms of Honesty/Humility, extraversion, conscientiousness, agreeableness, and openness as identified by Sherman and Rauthmann along with their colleagues (2015).
In terms of conscientiousness, Jack Ma has consistently said since 1999 that the priority of importance is that the “customer is number one, the employee is number two, and the shareholder is number three” (Ma, 2018). China was for the longest time and still is a place of very askew gender roles in business- women were and are seen quite simply as less. The age of the internet has brought about a huge cultural impact in regards to changing this somewhat obsolete attitude but Ma was one of the first that had to deal with it head one. Alibaba currently has 49% of its workforce made up of women, this is extremely progressive not only by Chinese but global first world standards as well. He anticipated that even “if the idea that men are better at [inherently doing things] than women, they have to build their company to include women because women are going to be an integral part of the hiring process in the future….you cannot ignore a gender that is going to be such an important part of globalization” (Ma, 2018). He feels very passionate about the subject of globalization; his vision is actually based on his own historical ontology of globalization which he says has occurred in two phases and is emerging in one phase. He believes that the first round of globalization was “emperors and kings” and the second round which he profited from was the “60,000 big companies of the last 30 years”. He currently believes that his company is the model for future globalization which rests on giving “opportunity to young people”. One of the things that Alibaba is used for is actually being able to buy bulk manufactured goods at a discount in a very easy and digitalized manner- gone are the days where one has to go to China and meet with factory owners to negotiate unit prices on items. Many small businesses around the world such as “drops shipping” as well as other in-home shops depend on the products that they buy from Alibaba to make their business run. Companies like the Dollar-Shave-Club have made new millionaire out of young people by using the Alibaba manufacturing supply chain.
In terms of agreeableness, openness, and extraversion Jack Ma displays these aspects in spades. He is just a really optimistic person who is happy no matter the outcome (extreme resilience) and this has what is known as a high leader trait affect (Joseph et al, 2015). Each of these big 5 factors is magnify one another in Jack Ma because he espouses this idea of “philanthropy to customers and to employees”. He is constantly driving his employees to work hard but what makes him different than other leaders is that “motivational properties and benefits of leader positive affect may not be apparent until followers are actively striving towards their goals” (Joseph et al, 2015). He always gave his employees something to work toward at all stages in his career whether working in a garage with friends or managing 20 people in a call center. He was heavily involved in making sure that he cultivated a strong sense of loyalty from his employees. Alibaba workers are consistently paid more and with better benefits than the typical Chinese worker and the there is a very open and collaborative environment being promoted at all levels no matter how menial. The book Jack Ma wants to write is “the 1,0000 mistakes that Alibaba made” because his experience of building his business was one of learning with his team. They were able to survive catastrophe after business catastrophe with low turnover because of Jack Ma’s agreeableness, openness, and extraversion.
The most critical event in Jack Ma’s personal history is a toss up between his decision to become Chairman of all Alibaba Group in the late 2000s and the founding of Alibaba in 1999. I believe the 1999 is really more telling of his leadership because he wasn’t, nor was his company, a household name even in China at the time yet. In 1999, he basically gave a keynote speech to his loyal 17 employees that would directly lead to the company that exists today.
Essentially, he wanted to orient the company no longer as a domestic website but one that had global reach. It is in this that he demonstrates his final strongest trait- humility. Whereas most leaders do fall pretty to deception, Jack Ma’s entire career has been hallmarked by humility and honesty. Basically, he knew that Alibaba was at the mercy of the American government (tariffs), the Chinese government (Communist manufacturing standards- which could be very strict and worse, corrupt), and major established retailers such as eBay- yet he believed and in the impassioned speech argued that their ‘innovate spirit could break through this’ (Ma, 1999). He contended at the time that Americans were the leaders in hardware and systems but that the “Chinese brain is just as good as theirs in software and selling…that one of [them] can defeat 10 [Americans]” (Ma, 1999). He really pushed this vision on those employees that they need to work hard for the next 5 years on the off-chance that Yahoo or eBay loses its market share/prominence in the internet. That’s a really hard sell for a leader to make in 1999, he was basically telling them that they could overtake major retailers but they needed to have faith and work to create that opportunity. I think the ethical implication of this was tremendous, he was basically asking them to work extremely hard for what could potentially be no payoff. He also made it very blunt and very honest to them what they were facing but he didn’t frame it in statistics- the statistics didn’t need to state how dire their chances were. He framed it in his beliefs and those beliefs let people hire him.
When I took the Big Five Test, I test very highly extraversion. I think this would have been a very difficult thing for me to sell to my employees because I would be asking them to give up fun and stability for a more start-up like culture of hard work. I think I would have framed it in terms of potential rewards and that we deserve to be the market leaders instead- that it was our duty to do that because we are the only ones who can be trusted to do the right thing.
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Kuchynková, L. (2015, October). Testing the Effectiveness of Potential Managers’ Leadership Styles. In ECMLG2015-11th European Conference on Management Leadership and Governance: ECMLG2015 (p. 211). Academic Conferences and publishing limited.
Ma, Jack. [Bloomberg]. (1999)[2014, September]. Alibaba IPO: Jack Ma’s Original Sales Pitch in 1999. [Video]. Retrieved from https://www.youtube.com/watch?v=Up9-C4_8dVo
Ma, Jack. [Law of Attraction Coaching]. (2018, January). JACK MA 2018: BREAKING YOUR LIMITS. [Video]. Retrieved from https://www.youtube.com/watch?v=V9ENp2BQ8lE
Sherman, R. A., Rauthmann, J. F., Brown, N. A., Serfass, D. G., & Jones, A. B. (2015). The independent effects of personality and situations on real-time expressions of behavior and emotion. Journal of Personality and Social Psychology, 109(5), 872.