Alibaba plan shows just how to overcome succession problem
Jack Ma will hand over the reins to Daniel Zhang Yong after a year in a test case for Asian business empires, especially those still dominated by their founders
Nearly 40 years after China’s opening up, corporate succession planning has become a major issue for the world’s second-biggest economy. The reforms fostered a private sector that expanded at breakneck pace and now drives national economic growth and job creation. If the handover to the next generation does not safeguard and consolidate these achievements the national economy will suffer.
Sadly, in the absence of strategic and long-term succession planning, many private companies risk being part of the problem rather than the solution. The Chinese tradition of handing over to the next generation of controlling families can sometimes fall short of market expectations of transparency and accountability.
Moreover, it cannot be assumed that all the younger ones will share the same driving interest and ambition of their elders, or the same ideas about how the business should be run. That said, there are examples of more open-minded younger generations succeeding in bringing in new styles of management.
Watch: Jack Ma on why you don’t have to be smart to be successful
Despite the implications, the issue has tended not to get the attention it deserves. That changed this week when Jack Ma, founder and chairman of e-commerce giant Alibaba – owner of the South China Morning Post – made his company part of the solution with the announcement of a detailed succession plan.