The Value of Honour – Jack Ma


Mr Jack Ma, Founder and Executive Chairman of Alibaba Group, specially recorded this video for the Honour International Symposium, which was held from 19-20 May 2016 in Singapore

English Transcript | 中文副本

Greetings everyone!

It is a special honour to be invited to the symposium. However, due to work conflicts, I regret that I cannot attend and partake in the insightful discussions. However, I have a special interest in today’s topic and have many thoughts to share and discuss as well as to learn from you all. In this regard I would like to pay special thanks to the symposium organizers for allowing me the opportunity to show my video.

At first, I questioned both my English and Chinese language abilities as I could not precisely translate “Honour” to Chinese. In the end, I was relieved when I learned many of you also had trouble translating the meaning of this word into Chinese. In fact, when you carefully consider the meaning of “Honour” and the principles it embodies it has been ingrained in Chinese people for thousands of years and has also been deeply embedded in the “bones” of Chinese people around the world.

Chinese have long understood that in order to do things completely you must complete certain tasks first. As a first step, China took to thoroughly considering and understanding the meaning of compassion, justice, courtesy and wisdom before realizing the past two thousand years of glory, politics, culture, art, and economics. Each of these areas have been great achievements for China.

Over the past 800 years the rise in China’s GDP ranked first in the world. “The Analects of Confucius” is only 11,000 characters long, only taking the space of one page of a newspaper today, but this important literary work has influenced and guided China for 2,000 years. Similarly, today’s symposium represents a topic of equal importance because the next 2,000 years of human development also needs our influence and guidance.

I believe that Singapore has set an example for the Chinese-speaking world and I fully agree with the beliefs of the Singapore government, the level of development that it has achieved today and its international status but the most important factor is its steadfast commitment to “Honour” and everything that it includes: respect, righteousness, integrity, responsibility, etc.

When I first started doing business, I asked my wife if she would rather have a husband that is rich or one that has values and is well respected. She replied, of course have values and be respected. Because at that time, most people did not believe I could make money.

In the past, I did not look highly on businessmen. Furthermore, I believed the societal value created by businessmen was very limited. However, after I had my own business, I realized that if you want to last long and be successful your daily considerations and analyses should have nothing to do with money. Decisions that are made related to money are not strategic. Instead, the decisions that aren’t made based on profit and instead made based on values are actually the truly strategic ones. Hence, I have always believed that a good finance director would not make a good chairman because a good finance director is always thinking about money. People that have money fully occupying their mind have difficulties in doing good things and have difficulty in being good friends.

I realized that if you want to last long and be successful your daily considerations and analyses should have nothing to do with money.

When Alibaba was founded, we were in a very difficult situation. We had nothing. Nobody believed in what we did. Everyone said we were crazy people or cheaters but what actually allowed us to survive? Was it money? In fact, we had no money. Was it resources? We had no resources. Was it human talent? In fact, our human talent all ran away when they saw our situation. In fact, what we had were our values. Our values included: customers first, team spirit, and integrity. And when you look at these areas they appear empty and worthless. When Alibaba first started, we were really poor. But we believed in the future development of the internet. We had a dream of creating a future. We had our own values for doing business.

We started out by helping Chinese foreign trade companies with their overseas orders, charging them annual fees. But after a year had passed, these companies’ transaction value did not even exceed their annual fees to us. Our staff felt heart broken and felt like they let their clients down. During the end of year’s visit, our staff spoke to them with honesty: Ecommerce will have a great future but results may not be instant. Perhaps you can get a refund and not sign up next year.’ What resulted instead was that our clients encouraged our young employees. “It takes time and training for foreign clients to migrate online. Your considerations of our business have earned our belief and trust.” There have been many similar companies and even from over ten years ago until now they remain Alibaba’s clients.

After ten plus years of building businesses, my most profound thought is that, as a businessman, the most important decision to determine a company’s destiny has nothing to do with money. Many people have asked me, “Jack why are you so capable Jack?” I said, in fact I’m not very capable, it’s just that we are lucky. Other people have said, “Jack, you are so lucky and succeed every time.” I don’t feel like this is the case. In fact, our success was due to right choices we made. Alibaba has grown to this point today because we made a few critical choices.

The first case was in 2002 when the internet bubble burst, Alibaba had to survive. During that time the company was in a difficult situation but we set a goal of making $1 profit. At that time if we didn’t make any profit we would die and the most painful issue was in order to win website design business we had to offer bribes. So we held an all-day meeting in Hangzhou. We understood that if we offered bribes we could survive but if we didn’t our company would likely die. I remember that day we met until 4pm and finally decided we would never offer bribes. We would rather close down the company. We would not operate without integrity. We would rather together find new jobs and continue to maintain integrity.

In 2002, because we maintained our integrity, we started to make a profit. After we started to make profit we discovered during our end of year review that two employees accounted for over 60% of the entire group’s sales. And we discovered these two employees were giving kickbacks, commissions, and bribes. So what should we do? If we fire them immediately, the company will not have profit. If we do not kick these two employees out then what does this say about us? It would imply that our words are empty so in the end we decided to let these two employees go. “Do not bribe”, this rule is written into Alibaba’s employee code of conduct. Employees that violate this rule are immediately expelled.

After Alibaba became a large company, bribes started to flow the other way around. We set new rules that forbid employees to take bribes. We have billions worth of procurement contracts every year. In our contracts we include this sentence: “Thank you for doing business with us. We hope that in our future business interactions our employees cannot ask for bribes and you will not offer us bribes. If we discover any such related problems, our group will never do business with you.” This is written in our contracts.

Today, Alibaba employees are well respected in the community. This isn’t because our business has grown large but rather the result of the many codes of conduct our employees follow. In many places, our employees are warmly welcomed. But our employees are not allowed to accept free car rides or meals. Small gifts, even a piece of candy is sent back. Otherwise the employee’s value score will be very low, and even be subject to penalties.

There was one time when I sat in a salesperson training session. The training instructor was speaking about how to sell hair combs to monks. After listening for five minutes, I got extremely angry and expelled the instructor. I thought the instructor was a cheater because monks do not need combs in the first place. So to sell a product to a client that doesn’t need it is deceptive and not skill-based sales. This practice was a significant challenge to our values.

The second choice we made at Alibaba was Alipay. As soon as we launched Taobao it quickly became very popular. However, many users communicated online without transactions actually occurring due to the lack of trust between strangers.

People were not willing to provide payment in advance and no one was willing to ship merchandise first. Our biggest problem was to solve this transaction problem.

That year I participated in the World Economic Forum meetings in Davos with the intent to find a solution to this problem. Instead, I discovered that all the businessmen were discussing corporate social responsibility. During my time at Davos, I suddenly realized that if we wanted to develop e-commerce in China, we needed to do something that had true value, something that would promote societal development. Without it we will never succeed. To do something like this requires tremendous responsibility. Without it, we will not be able to get anything done.

The lack of development in China’s ecommerce was due to one missing piece—a mechanism that could facilitate trust between people.

I believe that Alipay is the mechanism that can fulfil this gap. That same night at Davos, I called my friends and colleagues. I said, “Immediately, right now. Let’s create this product, let’s launch Alipay.” I understand the regulatory risks associated with creating Alipay in China, and if someone needs to go to jail for this product, I will go.

China is a country that has valued credibility and integrity. Confucius has said, “Every day, I self-reflect on three issues.” During ancient times people self-reflected on three issues a day, two of these three issues are related to sincerity and honesty: did I try my best in helping others and did I keep my word when engaging with friends. Chinese value credibility but lacks a system of trust. If Alipay wants to have value in China it must establish a trust system.

Today, Alibaba has built a trust system in China: users provide reviews, Alipay facilities transactions, and all the actions taken on our platform is data which helps inform credibility and credit ratings.

Only with this system, would it be possible for users to send strangers money and merchandise solely based on a picture and a few sentences posted online.

Today, we have millions of daily visitors on our site. Sometimes an order can represent a diamond worth several hundred thousands or a car worth millions. A few days ago, we sold 100 Mercedes-Benz in only 25 seconds. As a result, without this trust system, these transactions would be nearly impossible. What makes us most proud today is not how many products we sold but rather the trust system Alibaba has built. We proved to everyone in a commercial manner how much trust is worth. We built a system of trust. We are also a beneficiary of the system. This system provides the foundation for Alibaba to achieve $500 billion in sales during our fiscal year. The power of honour is tremendous.

If the past 30 years of China’s development relied on its advantage in population size and the relatively low price of labour. Then in the coming years China should not look to rely on having cheaper products but instead rely on the trust or honour between people. If there is a significant human potential that has not been realized I believe mutual trust and credibility is the biggest undiscovered fortune. Only when we pay attention and care about “Honour” will we “Honour” ourselves. I believe it is only then that we can earn other people’s “Honour.”

Many thanks to the symposium organizers for inviting me, and I am very sorry that I was not able to be here personally for the meetings. Congratulations to everyone here. Thank you all!

中文副本 | English Transcript

大家好!

很荣幸得到大会的邀请。非常遗憾因为工作的原因,我不能来到现场,加入大家的讨论。不过我对今天的话题特别感兴趣。有很多话想说,想和大家交流,也向大家学习。所以也要得别感谢大会给我这个视频的机会。

一开始我对自己的英文和中文都产生了怀疑。因为我发现在汉语里很难准确的找到一个词,这个“Honour”这个词的汉文。后来我知道你们中间,原来也有很多人其实跟我一样,也不是很能够找到这个词的真真确确的含义,我就很放心了。

其实仔细想想“Honour”的内涵,它包涵的道理,已经陪伴中国人几千年了,也深入到了世界上各个角落华人的骨髓。?

中国人很早就明白,要做成事,什么东西才是第一位的?

中国是先把仁、义、礼、智、信这些道理都想明白了,想彻底了,才有了后面两千年的辉煌。

政治、文化、艺术、经济,每一样都非常了不起。

中国曾经有八百年的GDP是在全世界排第一的,论语才11000多字,也就只有今天报纸的一个版面,但是一下子就影响并治理了中国两千多年,所以我知道今天的大会非常的重要,因为我们要管好接下来人类发展的两千年的文明。

新加坡给华人世界做了一个表率,我非常赞同新加坡政府所相信的,新加坡能够有今天的发展、今天的国际地位,最重要的是坚守了“Honour”所包含的东西,就是:尊重、正义、诚信、责任、担当等等。

我刚开始做生意的时候,问我太太,你希望你的丈夫将来是很有钱,还是很受人尊重?她回答说,当然是受人尊重。

因为很多人那个时候认为我不会赚钱,我以前也看不起商人,我也认为无商不奸,而且商人创造的社会价值非常有限,等我自己做了企业以后,我才明白,其实一个企业家要做得久,做得好,他每天考虑的大部分事情都应该跟钱没有关系,跟钱有关的都不是战略性的,不以利益为出发点的战略决策才是真正的庙堂之策。

所以我一直相信一个好的财务总监很难做好董事长,因为好的财务总监脑子里全部都是钱。脑子里全是钱的人,是很难做好事情,很难做好朋友。

阿里巴巴一开始那么难,什么都没有,没有人相信我们要做的事情,人人都说我们是疯子、是骗子,但究竟是什么让我们这个企业活下来?是钱吗?其实我们根本没有钱;是资源吗?我们也没有资源。 是人才吗?其实人才跑到我们公司看到这个状况都跑了。

我们其实有的是价值观,我们有的是客户第一、团队精神、诚信,而这些东西看起来都很虚,很不值钱。

阿里巴巴一开始,其实我们真的非常穷,但是我们有对互联网发展的信念,我们有对创建未来的梦想,我们有自己做事的价值观。

刚开始的时候,我们帮助外贸企业在网上接出口订单,每年收外贸企业的年费,但是一年下来,交易额还不如他们交的年费多。我们的员工,心里觉得很过意不去,觉得很对不起人家,年底客户走访的时候,就老老实实跟对方说,电子商务这个东西将来会很好,但是没有那么立竿见影,要不你们就退钱,明年别再签了。

结果我们的客户反过来会鼓励我们的年轻人,说外贸客户要从传统渠道到网上来,那是需要时间、需要培养,您既然这么为我们着想,我们相信你们。

所以很多这样的公司十多年了,到现在还是阿里巴巴的客户。这十多年创业走过来,最深的一个感触,就是一个企业家做的最重要的选择,决定公司命运的选择,基本上都是跟钱无关的选择。有很多人说,马云你为什么那么厉害?其实我说不是我们厉害,也是我们运气好。但也有人说,马云你怎么运气这么好,每次都能成功?我觉得也不是那样,其实是我们做的选择比较正确一点而已。

阿里巴巴发展到今天,确实有几次关键性的选择:

第一次是阿里巴巴要活下来,2002年互联网泡沫破灭,那时候公司非常艰难,但我们提出了必须要盈利1块钱,那时候不盈利我们就死掉了,那时最痛苦的一件事情就是帮人家做互联网的网页,你必须要给贿赂,不给贿赂,人家就不和你做生意,所以我们在杭州开会讨论了一天,如果给别人贿赂我们就有可能活着;如果我们不给别人贿赂,我们就可能死掉了。直到下午4点多,我记得那天,我们决定,我们永远不给别人贿赂,永远不行贿,宁可公司关了,我们不做这家公司,我们一起再去找工作,也必须要坚持诚信的底线。

到了2002年我们居然那年因为坚持了自己的诚信底线,开始赚钱了,赚钱以后呢,我们看了下年终,我们发现有两个员工,他们两个人的业绩就超过了我们整个集团销售团队的60%,而这两个人我们发现是给人佣金了,给人贿赂了,你说怎么办?如果把这两个人当即开除,那么公司就不赚钱了;如果不开除这两个员工,那么意味着什么,意味着我们所讲的一切都是虚话,所以我们最后的决定还是开除了这两个员工,不贿赂,直到现在都写在阿里巴巴的员工守则里,谁要是触犯了,我们就会立刻开除。

阿里巴巴做大以后,行贿这个事情倒过来了,我们规定不准员工拿贿赂,我们一年内有几个亿几十亿的采购,我们在合同里写了这一句话:感谢您跟我们做生意,我们希望跟您未来在做生意的过程中,我们的员工不能向您索要贿赂,您也绝对不允许给我们一分钱的贿赂,如果我们发现有任何这样的问题,我们公司集团内将永不跟您做生意。这是我们在合同上写好的。

现在阿里巴巴员工走出去,是很受人尊敬的。这个不是因为我们生意做大了,而是我们的员工有很多的规矩,现在很多地方接待我们是很热情的,但是我们的员工,不能让别人的车来接,不能吃人家请的饭,拿一颗糖都要送回去,不然他的价值观打分就会很低,甚至会受到处罚。后来有一次,我们销售人员在培训,我去看了下,发现培训老师在讲怎么样把梳子卖给和尚,我听了5分钟,我非常生气,就把这个培训老师给开除了,因为我觉得是骗子,因为和尚本来就不需要梳子。

把产品卖给那些不需要这个产品的客户,我认为这就是骗术而不是销售之术,这对我们的价值观是巨大的挑战。

阿里巴巴做的第二个选择,是支付宝。淘宝建立起来的时候很快就非常热闹、非常火。但是网上咨询的很多,没有交易,因为没有人相信陌生人,谁也不愿意先把钱付出去,谁也不愿意把货先付出去。如何解决交易的问题,是我们最大的问题。

那一年我刚好去了达沃斯,我想去找到如何完成这样一个交易的目的和方法。但是后来我发现,所有的企业家都在那里谈论着企业的社会责任。我在达沃斯的时候突然想明白了,如果我们要在中国发展电子商务,我们必须去做一件真正有价值的事情,去真正推动社会的进步,真正的去创造独特的价值,不然我们永远发展不起来。而要做到这一点,需要有巨大的担当,没有担当,任何事情都不可能做成,中国电子商务发展不起来,就是缺少一个让人和人之间建立信任的东西,而这个东西,我觉得就应该由支付宝来解决。

当天晚上我在达沃斯打电话给我的朋友和同事,我说立刻现在马上去做这个产品,启动支付宝这个产品,如果说因为这个产品要去坐牢那就是我去。其实中国一直是一个讲诚信的国家,吾日三省吾身,古人每天反省自己的三件事,有两件事关乎诚信:为人办事有没有尽力;与朋友相交是否守信用。中国讲诚信但是中国缺乏诚信体系,支付宝在中国要有价值,就必须建立这么一个诚信的体系。

现在阿里巴巴在中国建立了一个诚信体系,用户给你评价,支付宝帮助你交易,最后你的一切痕迹都是数据,而数据留下来,产生了强大的信用。有了这套体系,你才有可能在网上只凭一张图片和几句介绍,就可以向陌生人付钱,向陌生人寄出商品。

我们现在每天有上亿人次的点击,有时候一单生意就是几十万的钻石,上百万的汽车。前几天我们用了25秒钟卖出了100辆奔驰,所以没有诚信体系,这一切几乎全不可能。

今天我们最骄傲的不是阿里巴巴卖出了多少商品,而是阿里巴巴建设了一个诚信的体系,用商业的方法向所有人证明了诚信值多少钱,我们建造了一套诚信的体系,我们自己也是这个体系的受益者,这是阿里巴巴一个财年为什么能够实现5000亿美元销售的基石,诚信的力量是巨大的,如果说中国过去三十年的发展,依靠的是人口红利,是廉价劳动力,那么接下来,中国可以依靠不是货品与货品之间的差价,而是人与人之间的互信。如果说人类还有什么红利没有被发掘的话,那我相信,信任、互信是最大的未开发财富,我们也只有自己关注,care这个“Honour”,只有自己“Honour”自己,我相信才能赢得别人对你的“Honour”。

所以感谢大会的邀请,很遗憾没有机会来参与这个大会,在这儿向大家表示祝贺,谢谢大家!

See Related:
Advice from Jack Ma on Life and Entrepreneurship
Jack Ma advice on how to be successful in Life
Jack Ma’s vision for Alibaba

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