Alibaba CEO Daniel Zhang tells employees not to ‘live for KPIs’ in speech after being named Jack Ma’s successor

By Zen Soo

In his first internal management strategy speech since being named Jack Ma's successor, Alibaba Group Holding chief executive Daniel Zhang Yong reminded managers in the company that key performance indicators should never be the sole reason to do something.

“If we live for KPIs, and do something just for the sake of KPIs, then Alibaba is finished,” Zhang said last month at an internal meeting for its organisation department, a group of about 500 high-level executives and leaders in the company.

Zhang's remarks follow the announcement earlier last month by Alibaba co-founder and executive chairman Ma that he would hand the reins to Zhang in a year's time to focus on philanthropic efforts. While Ma is known to be a visionary and a charismatic orator, Zhang is more reserved and is seen by many to be a steady and reliable choice to lead Alibaba in the future.

Since it was founded in 1999, the company has gone from a scrappy start-up with 18 co-founders working out of Ma's apartment in Hangzhou, to Asia's most valuable company with a market cap of US$427 billion, making Ma China's wealthiest person.

Ma has stated that he hopes Alibaba will last “at least 102 years” with the mission to “make it easy to do business anywhere”, and has put into place a partnership structure to help ensure the continuity of the company and to prevent important decisions being made by only a handful of executives.

Zhang, together with chief technology officer Jeff Zhang Jianfeng and Ant Financial Services chief executive Eric Jing, are three of the 36 Alibaba partners, executives who have the exclusive right to nominate a simple majority of Alibaba’s board of directors.

Here’s how Jack Ma can walk away from his US$420 billion empire

Reiterating the rhetoric of Ma, who is known for saying that Alibaba puts customers first, employees second and shareholders third, Zhang reminded employees that the company's dream is to create value for the customers they serve.

He also exhorted employees to do their best to meet their own expectations, instead of caring what others think, and not give up when they meet resistance or obstacles – especially when it came to new business models and innovative projects that have not been tried before.

“Many of our businesses have been the same for over 10 years, and if we keep doing things the same way today, or five years later, then Alibaba won't have a future,” Zhang said, adding that his greatest fear was that Alibaba would become like a “robot on loop”.

When it came to the fierce rivalry between Alibaba and its competitors in China's internet landscape, Zhang reminded employees to be relaxed, admitting that even Alibaba makes missteps sometimes, and these are still replicated by its rivals.

“When we face our competition, we need to maintain a happy attitude. Sometimes you need to be relaxed when you are faced with a fierce battle,” he said. “No battle has ever been won by merely copying others.”

Zhang’s remarks, first reported by mainland Chinese media, were verified by Alibaba.

Separately, Ma has relinquished his ownership in Alibaba’s main “variable interest entities", according to Alibaba's regulatory filing in New York. VIEs typically allow Chinese technology companies to take investments from overseas entities.

The change, disclosed in a July filing to the Securities Exchange Commission, was done to reduce the administrative burden on Ma.

Alibaba is the parent company of the South China Morning Post.

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