What is the sound of three hands clapping? I found out at noon on a Thursday in September, while walking through the headquarters of the e-commerce titan Alibaba in Hangzhou, China. On the fourth floor, a massive work space is filled with hundreds of headset-equipped salespeople sitting under yard after yard of fluorescent lighting. This is Alibaba's army of cold callers. They telephone clients who have storefronts on the website, urging them to buy keyword advertising or to pay to boost their online rankings. Each salesperson inhabits a cubicle furnished with a desk, a plastic sunflower, and a mirror—the last a reminder to smile, because it's an article of faith at Alibaba that a customer can hear a smile over the phone.
"Liuqian!" yells one girl, popping up from her cubicle. "Six thousand!" She has just persuaded a client to buy 6,000 yuan of keyword advertising. On cue, each of her colleagues raises their assigned celebratory device: a long plastic stick with three plastic hands at the end of it. The sound of three hands clapping—which to you may seem like a misremembered koan—is clickclickclickclickclickclickclick, nonstop on a good day. It is also the odd noise of corporate culture in China slowly changing. As Alibaba founder and CEO Jack Ma told attendees of a company meeting, there is no place left that you can build a new country, but you can start a new business culture.
Since corporations began popping up here during the economic liberalization of the 1980s, workplace culture has been defined by what one might call the Great Wall of corporate China—a divide between the haves (the executives) and the have-nots (the workers). Consider the state-run drug company Harbin Pharmaceutical Group, whose particularly opulent Sixth Factory in Harbin, in China's far northeast, drew the attention of state broadcaster CCTV in September. The corridors boast walls inlaid with gold leaf. Crystal chandeliers descend from the ceilings. The furniture looks straight out of Versailles (though it would insult the dead to imply workmanship worthy of the name Louis XIV). From these luxe digs, the fat cats, Communist Party members all, supervise their charges—without seeing them, if possible.
Now the old ways are under attack. With the Communist authorities increasingly aware of the nation's social divisions and potential restiveness, news-media coverage of Sixth Factory-like excess has grown. And as China has opened up to the West, practices from abroad have crept into corporate life nowhere more quickly than in the Internet sector. Leaders such as Ma have been inspired by the examples of Silicon Valley tech titans. Another new cohort of Chinese executive—educated and professionally seasoned in the U.S.—is returning home with new thinking about management and work, including a more in-the-trenches ethos, a heightened appetite for risk, and a different understanding of innovation. Those execs have earned a well-known nickname: haigui, or sea turtle, which in Mandarin is homonymous with the word for a person who goes overseas and then returns home to China.
To understand how corporate culture is changing in China, I visited three companies: Alibaba, Baidu, and Youku. Alibaba is perhaps the closest thing China's tech sector has to a homegrown iconoclast. Baidu, China's Google, was cofounded by sea turtle Robin Li, who dropped out of a PhD program at the State University of New York at Buffalo and went to work in Silicon Valley. Youku, China's take on YouTube, was started by Hong Kong-born, Stanford-educated Victor Koo. Together, these companies, all inspired by American websites, show the benefits of, and limitations to, adapting Western ideas and techniques to China. The cultures they are creating are something you would find neither in Silicon Valley nor in most of the state-dominated Chinese economy. It's a third way. And it may be the future of society. Call it the tao of the sea turtle.
Alibaba: The Tao of Belonging
West Qin, a 40-year-old son of professors who is in charge of Alibaba's rewards-points system, finally got married in May. He and his bride, Song Xin, 24, a professional traditional Chinese dancer, met in the Nanjing train station. She was lugging vodka home to her parents after a trip to Moscow to perform for Russian President Dmitry Medvedev. "She asked for help," he says. "I was glad to help a beautiful girl, and I gave her my business card." They had their first date a month later, sharing a bacon pie at Pizza Hut, on the auspicious date of September 9 (the number nine foretells longevity).
It wasn't long before Qin and Song knew they'd marry—and that they'd have a white wedding. His parents had married in blue unisex Mao suits; they were mandatory during the Cultural Revolution, as were certificates of permission from their employers. His grandmother had married in red, according to Chinese tradition. But Song was not the only woman wearing white at her wedding. In fact, she wasn't even the only bride. There were 324 others, all participating in a marriage ceremony led by Alibaba CEO Jack Ma, who performs a mass wedding for his employees every May. Song particularly remembers one thing Ma told the brides and grooms: "Love is not something you say. It's something you do—starting tonight!"
Americans sometimes complain that their spouses are married to their jobs, but how many can say that they were actually married at their jobs? Some observers have wryly remarked that Ma puts the "cult" in Chinese corporate culture. He has sought to integrate Alibaba into his employees' lives in a way that blends the Chinese heavy-handedness of Qin's and Song's parents' era with imported ideas.
Ma attended teachers' college in Hangzhou and has never lived abroad, but he got the idea for Alibaba after a visit to the U.S. After starting the company, Ma and other executives went on a world tour, meeting the chiefs of long-lasting, successful corporations including General Electric and HSBC. Ma concluded that all of them not only had strong corporate values but also a unified sense of purpose, that what made the difference between short-term and long-term success was a distinct corporate culture. So he organized Alibaba around six core values: customers come first; the embrace of change; integrity; passion; commitment to your job; and teamwork and cooperation. What resulted was a Silicon Valley company refracted through his unique Chinese lens—much like the Chinese versions of Western goods that you might find for sale on Alibaba. Signs of Ma's slightly silly, slightly whimsical style are all over Alibaba's Hangzhou campus, from those ridiculous three-handed celebration devices to the enormous statue of a naked man in the central courtyard to the receptionists' daily costume changes during festivals and holiday seasons. (The women are like living, breathing Google home-page logos.) Employees even get cake on their birthday.
If the Chinese government is Big Brother, then Ma's Alibaba is Big Mother. "There was a vacuum of values and culture after the Cultural Revolution," says Brian A. Wong, a Wharton grad who works as a vice president of global sales at Alibaba. "There was no social compass." That rootlessness has been especially profound for twenty- and thirtysomethings who left their hometowns and strong family networks to seek work and prosperity in other parts of China.
So Ma has sought for Alibaba to act in loco parentis. There are interest-free loans of up to 300,000 yuan for qualified employees to buy their first homes—and build more loyalty to Alibaba. The cafeteria even features a special menu for pregnant women. Turtle, for instance, will never be offered because Chinese medicine believes it can induce miscarriage, the head chef tells me, sounding a little like a hectoring mother-in-law.
In hiring and in promotions, cultural fit is as much a priority as technological expertise. In quarterly evaluations, staff members are judged on Alibaba's six-point value system. The goal is to cultivate a team spirit that will drive profits and, according to Ma, "keep [the state-owned enterprises] up at night." But none of that can explain why some job candidates have been asked to do headstands in interviews. Really.
Youku: The Tao of Fun
Just as Youku is a rough Chinese facsimile of YouTube, Hip Hop Office Quartet, a web-only series filmed in the company's Beijing HQ, is a loose equivalent of The Office. The show focuses on three employees in a design department—the outspoken fat girl, the beautiful bimbo, and the man who sits behind the bimbo and pines for her—and their creepy boss. The boss emerges from his office either to scold his underlings or to hit on the bimbo, whom he has hired expressly for that purpose. (In China, the term "unwritten rules" has become slang for an employee forced to sleep with the boss.) However scheming this boss may be, his creepiness is overshadowed by that of his own higher-up, who floats on and off-screen like a ghost. The punishment the mercurial big boss metes out for an unauthorized cigarette break: The employee must chew and swallow a cigarette.
Hip Hop Office Quartet, which is produced by Youku, draws 4 million viewers per episode with its satire of the prevailing Chinese corporate culture, its hierarchy, discipline, paranoia, and incessant sexual harassment. And it spotlights everything that Youku CEO Victor Koo does not want his office to be.
Koo had an unusually long journey for a sea turtle. Born in Hong Kong, raised in Australia, and college-educated in California, he grew up speaking Cantonese and English. After he returned to China, he got comfortable in Mandarin before founding Youku in 2006. (He named the company after himself—in colloquial Mandarin, his surname means "cool.") After getting his bachelor's degree from UC Berkeley, he worked at Bain & Co. in San Francisco, and when he talks about strategy, he sounds like the management consultant that he once was, chattering about enabled devices and implementation strategies. He credits business school for giving him the skills, contacts, and inspiration to work in a startup environment. "If I hadn't gone to Stanford," he says, "I'd be working at P&G now."
Koo returned to Asia with a less hierarchical view of his workers than exists at a typical Chinese company, where every employee would address him honorifically—"Chief Koo!"—whether they were in a meeting, an elevator, or the restroom. Koo has none of that. He has dispensed with the titles and the offices that remind people of the traditional hierarchy. Youku employees work on "teams," not in "departments," and they refer to one another as "classmates" and to supervisors as "teachers." And unlike the stereotypical Chinese CEO, who sequesters himself away from his underlings in a C-suite, Koo sits in a spartan cubicle.
Even more radical: Koo emphasizes the idea that work should feel as much as possible like play. While Youku's corporate culture is among the most casual, open, and egalitarian in the Chinese corporate world, the emphasis on fun is probably its most American aspect—though it's manifested in utterly Asian ways. Take the Youku offices, which employees have turned into a toy zoo gone wild: giraffes arching over cubicle dividers, computer screens vying for space with larger-than-life stuffed chickens, bobbleheads (mostly human) lined up in tidy rows. Plants sprout everywhere, and motivational slogans (cooperation comes first; then everyone gets a share!) shout from the walls. In a society where people still seem to be in collective recovery from mandatory Mao-style attire, it's startling to see bleach-blond fauxhawks, purple shorts, stonewashed overalls, and T-shirts that read summer bikini contest at work.
According to Koo, the idea at Youku has always been "to get people I like to work on something I like to do. If you don't like what you do, you're probably dragging your feet. If you do like what you do, you're cooperating and sharing." That ethos has in turn been magnetic for other sea turtles. "There's not the strong hierarchy that normally appears in a Chinese company," says Zhou Sheng, who worked at Microsoft for more than a decade before joining Youku as a senior product director. "At Youku the work is driven by the people here, not by the boss."
Baidu: The Tao of Semi-Independent Thinking
Set in a tech district on the northern outskirts of Beijing, Baidu's long rectangular headquarters building is designed to look from above like a search box—which the company hopes will not soon be obsolete. The building was designed by CAG, the firm that collaborated with Herzog & de Meuron on the Olympic Bird's Nest stadium. Its supermod interior is done in what you might call "pawhaus" architecture: On the lobby's ceiling is a giant bear-paw print, the Chinese search giant's logo. More paw prints can be found on the floors and throughout the building, as you wend past nap lounges, studios for yoga and Pilates, Zen gardens, and light-filled atria.
If it all feels like a knockoff of something you might find in, say, Mountain View, California, that's because it is. This is a company that has borrowed not only a business model but also the cultural trappings of some other search company, including a management style that is mildly democratic and encourages some initiative.
Wang Mengqiu, who heads Baidu's search R&D, is the paragon of a sea turtle. A native of Sichuan Province in western China, she left the country for the first time to get her master's in computer science from UCLA. "My professors did a lot to make me think more independently, to think about things from more different angles," she says. After graduation, she got a job at a startup called Abaqos in San Jose, where she gained valuable experience that she could never have acquired in China. Primarily, she says, "I learned to be responsible for myself. When I make a choice, it's my choice."
At a recent meeting, Wang and 20 engineers and programmers, who are constantly instant-messaging on ThinkPads, discuss how to assimilate new employees. That's an important mission for Baidu, which took in 3,000 new hires in the first eight months of 2011. One staffer has prepared a detailed presentation with page upon page of specific steps for new hires and their mentors: what to do, which forms to fill out, how.
It is exhaustive and, to Wang, repugnantly bureaucratic. "We have to provide guidelines, but execution depends on each situation," she tells them. She often finds herself fighting her employees' habit of waiting for instructions at every turn, but she understands that independent thinking represents an enormous shift in China. Hiring and promotion at most state-owned companies is based largely, if not entirely, on Communist-party membership and connections, not merit. And the education system is built on memorization, obedience, and rote learning. "With a lot of bright kids in China, we have to tell them, 'Do this. Don't do that,'" she says. "They have spent all their time trying to remember everything that might be on the test."
Baidu doesn't throw its staff into the deep end of freedom; its staff-development system features quarterly personal-development plans to give structure to management. "In traditional Chinese culture, the leader is the leader. It's almost as if they own the employees," Wang says. "I think when we show respect to everyone, employees have more space to get things done."
And here's where it's important to encourage the right balance of corporate and independent thinking. According to another sea turtle, Fan Li, Baidu's executive director of infrastructure, the goal is not to be "too liberal" or "goofy" like Google, where she worked for eight years after getting her master's in computer science from the University of Wisconsin-Madison. The goal is not even wild innovation; Wang Mengqiu prefers the term "creative implementation." There's little point in taking costly chances on bold experimentation when there's so much low-hanging fruit to be adapted from abroad. Case in point: Baidu recently launched an annual innovation contest. The winner of the prize— $1 million in stock options—was a team that designed a VIP club for advertisers.
In September, Baidu held its Baidu World Day, an annual extravaganza designed to stoke external publicity and internal enthusiasm. The venue, Beijing's National Conference Center, had been hipified with a techno soundtrack and an enormous digital backdrop of billowing clouds, as if the 5,000-strong audience were in a giant airplane. The highlight of the event was the unveiling, by CEO Robin Li, China's second-richest man and sea-turtle-in-chief, of a personalized home page—basically, Baidu's version of iGoogle.
"Are they doing anything we would call innovative? No, they're just cheaper," says Steven White, an associate professor of economics and management at Tsinghua University, in Beijing. "I've walked around Baidu offices but it just seems to be a factory. When they talk about computer programming, they mean hiring massive numbers of programmers, getting more output by putting more input."
Tellingly, Robin Li's presentation was immediately preceded by a speech from Chen Changzhi, a vice chairman of the Standing Committee of the National People's Congress. These Internet corporations have thrived only with the blessing of the government, which requires them to maintain censors and comply with a raft of constantly changing content prohibitions and restrictions. Chen is well-schooled in the wooden rhetorical style that has been in vogue and in power since the founding of the People's Republic. "We. Must. Push. Forward. The. Healthy. Development. Of. The. Internet. Sector," he said, in that staccato way that is meant to Emphasize. The. Point.
While Chen and these Chinese business leaders may have different definitions of "healthy" than their Western counterparts, it's hard to argue with that point. The Internet has brought an unprecedented level of openness to China, both for its users and for the workers—the engineers, the salespeople, the designers—who keep the machine running. And as the sector becomes ever more pervasive and influential in China, one can only imagine what might happen if some of its leaders, perhaps even some of its sea turtles, manage to make their way into that most moribund Chinese industry of all: government
A version of this article appeared in the February 2012 issue of Fast Company magazine.