Let enterprises no longer rely on Founders


Let enterprises no longer rely on Founders

On September 10, Alibaba announced that Ma Yun would no longer be chairman of the board of directors of Alibaba Group next year today (September 10, 2019), when Zhang Yong, the current CEO of the group, takes over. The sudden announcement of "retirement" by Ma Yun, who was under retirement age, was a surprise to many people and led to the widespread concern about the succession of large enterprises.

Chinese enterprises, especially private enterprises, have grown up almost in the last twenty or thirty years. Alibaba, Tencent, Jingdong, Baidu, Huawei and Shunfeng, which rank first in scale, are no exception. Although these enterprises have become the leaders of all walks of life, but because of the short history, many are still led by the founders, the latter can be called spiritual leaders in the enterprise, Ma Yun in Alibaba's influence is so.

The reality, however, is that the founder can't run with the business forever, because the founder will eventually grow old, or the individual will encounter a sudden crisis. But if the enterprise wants to be everlasting, it needs the founder to plan ahead and turn the ability of innovation, sustainable development, evolution and change into organizational ability. The role of professional managers is indispensable, and history has proved numerous times that the "father-to-son" succession model is more likely to decline, not least in public companies. A year later, Ma Yun, Alibaba's CEO Zhang Yong, is a typical professional manager.

Moreover, too vivid a personal label for entrepreneurs makes the public inevitably equate entrepreneurs with the businesses they set up. As the first generation of founders grew older, the succession problem became a major problem that plagued many large enterprises in China, and could not be solved properly or even lead to failure. And Ma Yun can so "free and easy" to retire, largely because Ma Yun in the Alibaba period built a complete set of corporate culture and values system, so that Alibaba in the absence of any one person (including Ma Yun himself) can operate normally.

Vanke also succeeded quite successfully. In June last year, Wang Shi resigned as chairman of Vanke's board of directors. After Yu Liang took over, the company ran smoothly. One of the important reasons for Vanke's success is that "Vanke entrepreneurs have completed the positioning of professional managers very early". A perfect system of professional managers has been established in the enterprise, which makes the management team stable for a long time and fosters a systematic manager culture.

Therefore, when the enterprise develops to a certain scale and stage, the founder should probably choose not to do it personally, but focus on strategic direction, corporate culture and top-level design. Although it is not easy for a founder to delegate power to the management of a company, it is also necessary to do so, because it is related to the Evergreen Foundation of the enterprise, and it can also reduce losses when the founder encounters unexpected incidents.

It is worth mentioning that with the social development and the change of external situation, including the changes of industrial institutions, markets and the global competitive environment, the development of enterprises requires more and more steering, but also requires the founders to delegate power or transfer some of the powers to more appropriate people.

Of course, letting businesses no longer rely on Founders does not mean that founders are no longer important. According to a study by the University of Pennsylvania's Wharton School of Business, the best person to steer a business is the founder, not the professional manager. Statistics show that the founder is the CEO of the company performance, continue to beat professional managers as CEO of the company, beat performance in capital efficiency (the number of financing), exit time, exit valuation and investment returns on such indicators.

And in the history of science and technology, it is not uncommon for founders to return to the top of the enterprise, Apple, Dell, Google, Twitter and other well-known enterprises have founders from the second-line to the first-line experience. Most notably, Steve Jobs, Apple's founder, returned to bankruptcy with radical organizational reforms and reorientation to solve problems that helped bring Apple back to life, becoming the first company with a market capitalization of more than a trillion dollars. Undoubtedly, Ma Yun's role for Alibaba, even if formally retired next year, can not be ignored.

For large private enterprises facing succession problems, it is an urgent task to integrate the founder's style into corporate culture and organization and improve the professional manager system.


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