Talent intelligence and business strategy- the Alibaba story

If you are just starting a business, your hiring decisions might very well be what makes or cripples your business. In this article we learn an important lesson from Alibaba; we see how the use of Talent Intelligence help set Alibaba on the right path after wrong hiring decisions were made, and how the use of Talent Intelligence indeed shaped its business strategy.

ToTalent on June 09, 2023 Average reading time: 5 min
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Talent intelligence and business strategy- the Alibaba story

 

Talent intelligence transcends the regular or traditional process of talent acquisition and talent management. Talent intelligence uses data analytics to provide unique solutions to human capital acquisition problems. These human capital acquisition problems may be related to international mobility, talent scarcity and other talent acquisition related elements.

 

Labour market complexities that necessitate talent intelligence

The rising complexities in the labour market suggests that talent acquisition can no longer be business as usual. The traditional processes of talent acquisition must evolve to ensure that businesses are not adversely affected by the changes around the labour market. Data-backed decisions must be made to facilitate the hiring process.

Some of these labour market complexities are:

  • There is a labour market shortage; 

Where do I source for talent? 

What media platforms would best help me reach these talents?

  • I have decided to source for talent locally/internationally; 

What regions/countries do I focus on? 

Which international mobility factors should I be concerned with?

  • Worker expectations and preferences change; 

How do I make my employment offer more attractive, to give me a competitive edge over other employers in the war for talent?

  • Work culture significantly impacts employee performance; 

What is the best culture fit for my existing and new hires?…

These important questions are definitely worth considering in talent acquisition and talent management.

Talent intelligence equips organisations with data obtained from in-depth analyses of labour market behaviours and trends, both within the organisation and externally. This helps to provide answers to the aforementioned questions.

Talent intelligence data provides HR practitioners with insights on how to best manage and acquire talent. Also some predictive analytics on obtained data assists in future-proof decision making.

 

The Alibaba story

“Talent Intelligence is a mindset which every HR practitioner should have, they should be able to use the data and tools at their disposal to advise their CEOs on the most impactful and cost-effective method of hiring, that may also impact business strategy” –Jerry Hu.

Jerry Hu at Alibaba on Talent Intelligence
Jerry Hu- Former Head of Knowledge Center and Sourcing Center at Alibaba Digital Media and Entertainment Group

When diversifying a business into areas different than what it is already used to, talent acquisition may be an entirely different ball game.

This was the case of Alibaba at the time of expanding into the digital media and entertainment space.

Former Head of Knowledge Center and Sourcing Center at Alibaba Digital Media and Entertainment Group, tells of his experience at Alibaba in this podcast on the importance of Talent Intelligence. He talks about how it influenced a change in business strategy at Alibaba.

Jerry states how his Talent intelligence journey first started at Alibaba. His first use of talent intelligence data became necessary when Alibaba needed talent that was not available in China and they had to cross borders in search of talent.

However, the highlight of his talent intelligence journey occurred during Alibaba’s exploration of the Digital Media & Entertainment space.

Alibaba is famous for being a leader in the e-commerce space, but Alibaba’s drive for growth and expansion saw the e-commerce giant dive into digital entertainment.

Culture Fit for New Hires

Jerry recalls a complaint from one of the new hires: “I don’t fit into this culture, I can’t be in the office all the time, I like to wake up at 3am and start writing, that’s when I’m most creative.”

To get this new business venture up and running, one of the first action points was to acquire talent. Not just any kind of talent, but creative talent like content writers, actors, scriptwriters, movie directors, etc.

Jerry noted that the CEO of this division gave a directive to hire new creative talent internally and on a full-time basis. These new talents would then be inducted into the organisation and would work and function under the existing work environment and culture—which was essentially an “engineering work culture”. Alibaba being a tech company had its workforce predominantly made up of Engineers. Hence the “engineering work culture”. This may have not been a work culture suitable for creative talents to thrive in.

Jerry recalls a complaint from one of the new hires: “I don’t fit into this culture, I can’t be in the office all the time, I like to wake up at 3am and start writing, that’s when I’m most creative.”

Eventually there was an inability to get talents to perform optimally and to also retain them. This ultimately led to poor business performance.

Jerry and his team at this point decided to take a qualitative and quantitative approach to assess the situation. What is the root cause of this problem? How may we solve this?

Learning from Netflix

The model company to study was Netflix. Everyone in the digital entertainment space aimed to have the kind of success that Netflix had at the time.

What was Netflix’s secret to retaining talent and keeping them so happy?

Jerry states that Netflix had a “radical” and rather unorthodox work culture; a culture of “people over process”, that allowed employees an unusual form of freedom; unlimited vacations, no work dress code and so on. While there was considerable latitude, accountability and delivery on the job was also expected. This seemed to be working and producing great results for Netflix; it allowed talents to express themselves creatively and innovatively.

Could this work culture at Netflix be replicated in an Asian work environment at Alibaba? The answer was No, Jerry said.

There had to be other ways to do this.

The core of Netflix, even though it was a tech company, was not exactly the tech but it was the creativity; focusing on its creative talents.

Jerry and his CEO flew out to meet with Netflix founder Reed Hastings. It was in this meeting that they made an important observation. This was that Netflix’s core, even though it was a tech company, was not exactly the tech but it was the creativity. They paid particular focus to their creative talents.

This was not the case with Alibaba, which was chiefly a tech company with an engineering work culture.

Netflix had put together the best creative minds and provided a favorable environment for them to work with one another and thrive.

Change in strategy

Following this meeting, the CEO of Jerry’s division made an important business decision to stop hiring creative talents internally and full-time. A new business strategy was designed. This strategy sought to create partnerships with independent businesses run by creative talents; movie studios, movie directors, scriptwriters, etc. The partnership would see Alibaba providing the funding they needed, while they worked for Alibaba externally, in a work culture that they best fit in and one that would enable them thrive.

Jerry states that this shows that Talent Intelligence does not only have an impact on HR functions or talent acquisition, but it also plays a role in changing business models and influencing business strategy.

Key takeaway

It is important to note that while Alibaba had the opportunity to correct and bounce back from the mistakes made in the initial talent acquisition process, due to the substantial financial resources it had, other smaller businesses/Startups might not be so lucky.

Decisions on talent acquisition may very well be what makes or mars a business at its infancy. A lot of Startups literally cannot afford a mistake as costly as that which we have just learnt about in the case of Alibaba. It is therefore important to get it right the first time.

Talent intelligence helps organisations to avoid making costly wrong decisions about talent acquisition, by providing them with relevant labour market data points such as; salary benchmarking, competitor hiring activity, talent job preferences, talent availability, international mobility data, employment statistics and so on.

If you found this article insightful and interesting, then you should also know that on September 27-28, Intelligence Group is organizing the Talent Intelligence Conference.  This conference is in collaboration with ToTalentStratigensWerf& and the Talent Intelligence Collective.  This is a conference you definitely don’t want to miss. The Talent Intelligence Conference spans two days and holds at Headfirst Group in Hoofddorp, Amsterdam.

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