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Business Opinion

Alibaba Dresses Up With New CEO

Jonathan Lu (image via Alibaba)

Jonathan Lu (image via Alibaba)

The Internet world is buzzing this week with word that Alibaba founder Jack Ma will hand over his CEO title to another company executive, ushering in a new generation of leadership for China’s leading e-commerce firm. But this change looks largely superficial to me, and is most likely designed to please investors as the company gets set for its multibillion-dollar IPO that could happen later this year. Instead of chief executive officer, the title of chief administrative officer would probably be more appropriate for the role that Alibaba’s incoming number-two man Jonathan Lu will play. That’s my assessment based on what I know about the strong-willed Ma, who will stay firmly in charge of Alibaba from his remaining position as executive chairman.

The headlines have been filled nearly non-stop this week with news of Lu’s appointment, which comes after Ma announced in January that he would yield his CEO title to a new person by May. Lu’s appointment didn’t come as a huge surprise, since he’s a long-time employee who has worked in many of Alibaba’s divisions, most recently as head of its data division, and thus is very familiar with the company.

Equally important, Lu’s 13 years at the company has given him plenty of time to work with Jack Ma, whose strongly opinionated management style has previously caused him to clash with other executives. Media have been mixed in their analysis of Lu’s selection; some say Lu will be a transitional leader until Ma finds someone younger and more charismatic to lead his company, while others said Ma is grooming Lu to eventually take over the chairmanship and lead the company.

One common theme was that few believe Lu will be able to match Ma’s charisma and broader vision that helped Alibaba to grow from its roots as an online business-to-business marketplace to become China’s largest e-commerce firm worth $35 billion or more. I’ve followed Ma and Alibaba for quite some time, from his earlier days when he relished his role as company spokesman to more recent times when he rarely gives interviews.

Throughout the process, one things has remained constant: Ma is a man who likes to be in charge. He has created a company that mirrors his own aggressive, opinionated style, which in many ways is one of the biggest factors behind Alibaba’s success. But that same style has caused Ma to clash with others who have disagreed with his vision or tried to help him run his company.

The most poignant and public of those clashes came with Carol Bartz, the equally opinionated former CEO of US Internet giant Yahoo, which became Alibaba’s master with its 2005 purchase of 40 percent of the Chinese company. During her brief tenure as Yahoo CEO, Bartz and Ma became famous for their frequent clashes that often ended up in both the headlines and critical off-the-record comments from people within Alibaba. The colorful clash finally came to an end with Bartz’s firing from Yahoo in 2012.

Ma learned his lesson from that clash, and has carefully cultivated a field of capable executives around him who are adept at running businesses but probably know better than to challenge the views of their company chairman. Lu probably embodies this profile of “capable listener”, which is what Ma wants and needs around him.

All of this brings us back to the original subject of what the future holds for Alibaba under Lu’s tenure as CEO. The answer is that probably nothing will change. Investors may like the move, as it makes Alibaba look more like a western company, where good corporate governance says the roles of CEO and chairman should be separated between 2 people. Ma wants to make a good impression as his company prepares to make a multibillion-dollar IPO, in what would become China’s biggest ever Internet offering.

But anyone worried that Ma may leave his company anytime soon, or give any important decision-making functions to Lu, can probably relax. At just 48 years old, Ma won’t be leaving his company for quite some time. And Ma’s fondness for staying in control means that Lu is likely to take on a role as his chief administrator. Meantime, Ma will continue to make all the big decisions as the rest of his executive team listens, nods politely and then carries out those decisions.

Doug Young lives in Shanghai and writes opinion pieces about tech investment in China for Techonomy and at www.youngchinabiz.com. He is the author of a new book about the media in China, The Party Line: How the Media Dictates Public Opinion in Modern China.

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