What Can Jack Ma’s Departure Teach Us About Succession Planning?

There are lessons that every leader can learn from his carefully planned departure, says Dr Simon Hayward, CEO of Cirrus and author of The Agile Leader.

Often the departure of a high-profile corporate leader makes the news because the departure is sudden and unexpected, or there is an unclear succession plan in place. Ma’s departure was not a surprise. In fact, he announced his retirement a year ago, and has given his succession a great deal of thought. In a video posted last week, Ma said: “I’m the person always looking forward.”

Ma has now officially handed over the reins to his handpicked successor, Group CEO Daniel Zhang. Over the past 12 months, he has worked closely with Zhang to ensure a smooth transition. Ma intends to remain on the board until 2020 but made it clear in his resignation letter that he has “complete confidence in our next generation of leaders.”

In that resignation letter, Ma also stated that Alibaba is no longer a company that relies on individuals. Rather he described how it has “stepped up to the next level of corporate governance” to become a business “built on systems of organisational excellence and a culture of talent development.”

So, what can other business leaders learn from Jack Ma’s careful leadership succession planning? I think there are a few valuable lessons we can highlight:

Learn to let go

In my experience, many CEOs and senior leaders find it difficult to let go so others can take responsibility. To secure sustainable, long-term success, leaders need to devolve decision-making across the organisation. This prevents an over-reliance on people at the top. Think about the decisions only you can make, delegate the rest, and then work with others so they are capable and confident to make those decisions brilliantly.

Although Jack Ma is a charismatic, high-profile leader, he has demonstrated the ability to devolve leadership responsibility across the organisation. He co-founded Alibaba in 1999 and handed over the CEO reins in 2013, taking on the role of executive chairman. Alibaba’s sprawling businesses are now managed by a network of senior leaders. The spirit of partnership, collaboration and taking responsibility has always been strong across the organisation, and Ma has long been renowned for his inclusive style of leadership.

Develop others

Some leaders cite colleagues’ lack of capability as a reason not to empower them. As a leader, it is your responsibility to develop the leadership capability of others – to nurture talent across the business and encourage others to step up and drive growth and performance improvement.

Although most organisations understand the importance of developing a rich leadership pipeline, many could do more to offer the sort of challenging experiences that take future leaders out of their comfort zones so that they develop new, more innovative ways of working. Speaking at the World Economic Forum in Davos last year, former teacher Ma talked about the importance of developing human creativity in a digital age. “Education is a big challenge now,” he said. “If we don’t change the way we teach, we will be in big trouble in 30 years from now.” He now plans to focus on philanthropy and improving education in rural areas.

Be transparent

Jack Ma was completely open about his succession plan. This proved reassuring for colleagues, customers and stakeholders. Transparency builds confidence. When it comes to succession planning, transparency can also help to avert dips in share price, lapses in loyalty, and bad press.

Be agile

Although Alibaba is primarily known as a leading e-commerce company, under Ma’s leadership it has expanded into financial services, mobile payments, cloud computing and artificial intelligence. Growth in China’s e-commerce industry has slowed, but Ma has created a culture of agility which has enabled the organisation to react to changes quickly. As consumers have changed their shopping habits, how they interact with brands, and how they access the internet, Alibaba has reacted swiftly and focused resources on areas of new opportunity – all in line with its overall mission of making business easy to do anywhere.

Alibaba faces increasing competition from other tech giants – but Ma leaves a lasting cultural legacy. Crucially, Ma has also encouraged others to experiment without fear of failure. In the video he posted last week, he suggested that some companies fail because they fail to dream. “It’s the dreams that keep us working hard,” he said. “Its dreams that keep us never afraid of mistakes, or of setbacks.”