Alibaba at a Crossroads: A Candid Farewell Letter Sparks Reflection and Reform

According to Yuan An, the slowdown in internet growth, Alibaba's failed external acquisitions, and lack of successful internal innovations have all contributed to the company's loss of high-growth momentum. He noted that many businesses acquired or invested in by Alibaba, such as Koubei, Ele.me, and Lazada, have lost their industry-leading positions after being integrated into the Alibaba system. Moreover, Alibaba's acquisitions of companies like Yintai and Dashang have ended in losses. Yuan An believes that, in recent years, only a few of Alibaba's acquisitions, such as AutoNavi and UC, have been successful.

Yuan An identified problems in three areas: people, finance, and operations. These issues include an overemphasis on external talent, insufficient "Alibaba culture" among new employees, and a flawed performance evaluation and incentive system, which has led to increased employee cooperation costs and a decrease in genuinely productive employees. Additionally, Yuan An pointed out that internal employee grade inflation, unclear rewards and punishments, and a prevalence of short-term thinking are also major concerns. He also highlighted company-level issues, including unclear strategies, a focus on short-term gains, and rampant bureaucracy.

Yuan An suggested that Alibaba should return to its original motto, "A group of people with a sense of justice and morality working together to do something valuable and meaningful." He recommended rebuilding the company's cultural foundation, emphasizing customer-first, teamwork, clear strategy, and passionate professionalism. He also proposed reforming the HR system, management structure, and eliminating redundant positions, as well as strengthening operability and seeking truth from facts.

Jack Ma responded to Yuan An's post, stating, "Thank you for your long letter, which was well-written. Just like human growth, Alibaba's development also has many necessary paths and processes to follow. Alibaba is undergoing changes." Ma's response acknowledges the company's challenges and expresses his appreciation for Yuan An's feedback. Ma's reply is significant, as it shows that he is taking the feedback from the former employee seriously and is open to constructive criticism. By acknowledging the challenges faced by Alibaba, Ma is demonstrating his commitment to addressing the issues and ensuring the company's continued growth and success.

The post has also highlighted the issue of "big company disease" that afflicts many large corporations, including Alibaba. This phenomenon is not unique to Alibaba, but rather a common hurdle that many big enterprises must overcome. Jack Ma has also touched on the need to tackle the "big company disease" and return the company to its core values of efficiency, customer focus, and agility. By streamlining its operations and cutting bureaucracy, Ma hopes to reignite the company's innovative spark and adapt to the rapidly changing market landscape.

As Alibaba continues to navigate the challenges of rapid growth and expansion, it is clear that the company's leadership is committed to staying nimble and responsive to the needs of its customers and employees. The company's future development direction will likely involve a multifaceted approach, encompassing strategic investments, innovative product development, and a renewed focus on its corporate culture. To stay ahead, Alibaba needs to identify new growth drivers, while also ensuring the continued expansion of its core businesses. Simultaneously, the company must address internal issues, such as streamlining operations, eliminating redundant departments, and discontinuing loss-making ventures. By doing so, Alibaba can guarantee its sustained development and remain a dominant force in the global tech industry. By striking a balance between growth and operational efficiency, while fostering a work environment that encourages creativity, collaboration, and employee satisfaction, Alibaba can cement its position as a leader in the tech world and continue to drive innovation and progress.