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Alibaba Shows Facebook How to Lean In With Female Leaders

August 20, 2014

Alibaba Chief People Officer Lucy Peng

Alibaba Group Holding Ltd. Chief People Officer Lucy Peng. Source: Imaginechina via AP Images

As Silicon Valley companies struggle to hire women into their senior ranks, China’s Alibaba Group Holding Ltd. (BABA:US) is setting an example of how to do it.

The Hangzhou-based e-commerce company, which plans to sell shares next month in what may be the largest initial public offering in U.S. history, counts nine females among the 27 partners who control management (BABA:US), including Chief Financial Officer Maggie Wu and Chief People Officer Lucy Peng. That’s triple the ratio of women in board seats and senior executive roles at the largest companies in California.

The image of Silicon Valley as a boys’ club has been reinforced by data showing only a fraction of leadership roles at companies such as Google Inc. (GOOG:US) and Twitter Inc. (TWTR:US) are filled by women, with men also making up the majority of the total workforce. Alibaba, founded 15 years ago in Jack Ma’s apartment, included women from the start and they’ve helped shape a corporate culture rare both in the U.S. and China.

Women Rare Sight on Boards

“From very early on, the founder has established a diverse team and that became part of the DNA of the organization,” said Caroline Simard, research director at Stanford University’s Clayman Institute for Gender Research. “Thirty percent would catch our eye. In any company in high-tech in the U.S., that would be a very high representation of women.”

At Facebook Inc. (FB:US), whose Chief Operating Officer Sheryl Sandberg wrote “Lean In” to encourage women to take on more responsibility in the workplace, 23 percent of senior managers are female.

Overcome Shyness

Alibaba’s partners, who nominate a majority of the board, include six women who joined the company at the founding or within its first two years. They include Peng, 40, who is also chief executive officer of its financial arm; Jiang Fang, vice president for human resources and corporate integrity; and Trudy Dai, chief customer officer.

The early presence of women in the senior ranks created role models for other female employees and contributed to practices that help them advance, say former workers including Yan Xiaoyun. One example is Alibaba’s system for filling jobs, which includes the company notifying employees of open positions through e-mail along with an explanation of how to apply.

That proactive approach helps women overcome their shyness in asking for better opportunities, according to Yan, who said she worked at Alibaba from 2004 until last year.

“There was an established system for us to nominate ourselves or our bosses to nominate us; it was very open and transparent,” said Yan, 32, who’s starting a Hangzhou company. “I felt like whatever the men did, women could also do.”

Advancing Careers

Yan capitalized on the system for promotions and ultimately became a sales manager supervising about 700 people. She had a son at the peak of her Alibaba career in 2011.

Florence Shih, a spokeswoman for Alibaba, declined to comment on the company’s gender policies or make executives available for interviews, citing restrictions ahead of its IPO.

Examples of women getting new opportunities abound. Judy Tong started as a receptionist in 2000 and worked her way up to partner and chief operating officer of China Smart Logistics, an Alibaba-affiliated transportation venture.

Wu, 46, joined Alibaba seven years ago as CFO for a subsidiary, Alibaba.com, and now will play a central role in the parent’s IPO. She was promoted after helping guide the business-to-business website through several rocky years as a public company.

Unconventional Arguments

Wu, who spent 15 years at accounting firm KPMG, was brought in to prepare Alibaba.com’s IPO in November 2007. She kept investors focused on the company’s potential, said Richard Ji, a former technology analyst at Morgan Stanley who worked on the listing.

“When you focused too much on the detail, she had the ability to direct you to the big picture,” Ji said. “She could show you where Alibaba.com was heading and how it interacted with the rest of the group.”

Alibaba.com’s stock soon tumbled after a decline in exports and more than 2,300 vendors were found to be using the website to defraud buyers. Both the CEO and COO resigned in 2011. The next year, Alibaba.com was taken private for the same price as it listed.

“She stayed composed when facing lots of nervous investors, and when things didn’t go so well, she played a very important role,” said Ji, now the managing partner at All-Stars Investment Ltd., a fund that focuses on Internet companies. “She not only thrived but evolved into a much bigger role.”

Women’s Gentleness

Wu became deputy chief financial officer at the parent company, reporting to Joe Tsai, a Ma confidant who was CFO at the time. She became CFO in May 2013 as Tsai became executive vice chairman.

Executive Chairman Ma, a former school teacher, has said that companies should acknowledge the differences between men and women, and let women develop their own approaches in the workplace.

“Women understand the thing that makes them better than men, the greatest weapon that God gives them, is gentleness,” Ma told a 2010 conference for female entrepreneurs. “They understand tolerance; the women who do the best in companies are also like this. My other feeling is that men and women are very different.”

In about two weeks, Alibaba executives including Ma and Wu will embark on a series of investor meetings in Asia, Europe and the U.S. to market an offering that could raise as much as $20 billion, people familiar with the matter have said. The deal may value Alibaba at $187 billion, according to a survey of 11 analysts by Bloomberg in July.

Tinder Lawsuit

The company has a range of benefits that help females in the workforce. Alibaba’s internal bulletin board system includes chat groups on maternal and parenting topics, Yan said. It also engages families through events like picnics and karaoke, which helps win support from husbands and children, she said.

The industry’s treatment of women has gained new attention recently through a lawsuit against Tinder Inc., the maker of a top-selling dating application, by a former vice president of marketing. Tinder has denied discriminating against the complainant. Among the largest public companies in California, women hold 10.9 percent of board seats and highest-paid executive positions, according to a study by UC Davis Graduate School of Management.

At Yahoo! Inc. (YHOO:US), 23 percent of leaders -- defined as vice presidents or higher -- are women, and that includes CEO Marissa Mayer. The Sunnyvale, California-based company owns about 23 percent of Alibaba.

Sarah Meron, a spokeswoman for Yahoo, and Genevieve Grdina, a spokeswoman for Menlo Park, California-based Facebook, declined to comment.

Frat House

Sandberg has said the technology industry needs to do better than 20 percent or even Alibaba’s 33 percent.

“I think we suffer from the tyranny of low expectations,” she said in an interview this month. “Our expectation needs to be half.”

Twitter Inc. has one woman, Marjorie Scardino, as a director and 21 percent of its leadership is female. Among Google’s leaders, 21 percent are also women.

The dominance of men in U.S. technology companies may reflect the culture of programming and startups, said Elizabeth Ames, vice president of strategic marketing and alliances at the Anita Borg Institute, which works with women in the industry.

“A lot of these startups feel like you’re part of a frat house, and that’s not very attractive to a lot of women,” Ames said. “They also do a lot of recruiting through referrals, so if you have four white guy programmers, and they’re referring their friends for jobs, they’re very apt to look like them.”

Programmer Dominance

Compounding the challenge is the slumping number of women studying computer science. Just 11.7 percent of graduates were female in 2010-11, according to the Computing Research Association. That compares with 37.1 percent in 1983-84, according to research by Tracy Camp, a professor of computer science at the Colorado School of Mines.

In China, the Communist Party has actively promoted gender equality in the workplace. In an acknowledgment of their importance, Mao Zedong famously proclaimed that women “hold up half the sky.”

Still, Alibaba is an exception in China, too. Tencent Holdings Ltd., the largest Internet company in Asia, has no women on its board and no female executives overlooking its seven largest business units, according to its website. Chen Limin, a spokeswoman for Tencent, declined to comment on policies the Shenzhen-based company has to promote opportunities for women.

There are two women on the 25-member Communist Party Politburo and none on its elite Standing Committee.

Alibaba’s IPO may focus attention on the lack of women leaders in the technology sector. Yet its approach will be challenging for others to imitate.

“The women who are in the Alibaba management team were there very early on,” Ames said. “They made a lot of sacrifices to get the company off the ground. In those situations, people rise to the occasion, and they rise as the company grows.”

To contact the reporters on this story: Lulu Yilun Chen in Hong Kong at ychen447@bloomberg.net; Jonathan Browning in Hong Kong at jbrowning9@bloomberg.net

To contact the editors responsible for this story: Michael Tighe at mtighe4@bloomberg.net Robert Fenner, Peter Elstrom


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Companies Mentioned

  • BABA
    (Alibaba Group Holding Ltd)
    • $105.95 USD
    • 0.43
    • 0.41%
  • GOOG
    (Google Inc)
    • $528.77 USD
    • -1.82
    • -0.34%
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