The Animal of Execution – A Study of “Tai-Chi” Style Management of Taobao

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By Ren Fang | Tuesday, December 08, 2009

For every new Google employee in China, he/she is usually overwhelmed by all what Google has to offer: free snacks, gadgets, a world-class cafeteria with a renown chef, annual trips to Google headquarters in the Silicon Valley, and a nice 20% carve out of their work time allocated for anything that interests them as it relates to Google’s business (often referred to as ‘self-projects’). Some would argue that Google is the ‘best environment for nurturing and managing innovations’. However, 3 years after its office opening, Google’s market share in China is less than 30% (in 2009) and only exemplifies a 3% increase from 3 years ago.

On the flip side, let’s take Taobao as an example – China’s version of eBay. For every new Taobao employee in China, he/she needs to learn the proper way to do a handstand against the wall. No toys, no gadgets, no world-class cafeteria – just the ability to perform a physical handstand. Some would argue that Taobao is possibly the most bizarre environment for any Chinese company; however, with a market share of 86% (in 2009) and a +10% year over year growth rate since 2005 – you have to wonder what Taobao might be doing right.

I don’t personally know of any scientific or in-depth correlation between a luxury kitchen versus a handstand has to do with a company’s market share growth in China, but comparing the fact both Google and Taobao launched relatively at the same time in China, one has to ask if there is an effective way to how management plays a role in the success. Google’s slow growth in China is not an anomaly in China – in fact, many global companies face similar challenges. A closer look at Taobao’s corporate ideologies and management style may reveal some interesting insight.

ANIMAL OF EXECUTION

Jakie Ma, CEO of Taobao, has an interesting philosophy in conducting business in China. For him, an ‘execution-oriented’ style is the most effective way to grow a company in China. In his words, ‘to sacrifice the best ideas for the sake of execution is necessary.’

There is no question the fact the Chinese market is one of the most dynamic and fragmented markets in the world. Ma’s philosophy is that a reasoning / analyzing based management system is simply too slow to react in a market like China. Good ideas are only that – good ideas. Our VP of Business Development, Gordon Chu, likes to refer it as, ‘analysis to paralysis’.

In Ma’s management style, good ideas are important and innovation will definitely be the driving force to grow any company; however, it should only play second role to that of execution first. For Ma, the company itself should move from being managed as an ‘organization’ to being trained as an ‘animal of execution’.

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