The power of culture: Insights into Baidu's AI revolution

4. Aim higher and don't just be an elite

A high-flyer is in a state of constantly moving forward, while an elite is more like a label to indicate past glory. If an elite is no longer self-driven or ambitious to accomplish new goals, then no matter how successful in the past she or he should leave a position. This also holds true for a company faced with fierce competition because without persistent efforts to make new progress, decline or failure can arrive very quickly.

MEG, for example, is a cornerstone business for Baidu. Over the past two years, Baidu has adopted changes to create opportunities for high achievers such as reshuffling the 17 director-level positions first and then setting aside ten positions. The core team finally took shape through internal promotion and external hiring. There's no easy answer to whether to promote internally or hire externally. In the X+Y strategy, promoting an internal employee works better for the X part, but external recruitment is better for the Y part as outsiders bring new ideas to an exhausted team working under stress.

At the director's meetings, Robin Li also repeatedly stressed the importance of developing new perspectives, thinking outside of the box, and following the example of the virtuous and wise.

"We need to be open-minded and communicate more with entrepreneurs. Many new directors have joined us, bringing with them fresh perspectives, fresh ways of thinking and working. We need to maintain sufficient communication with entrepreneurs and learn from them. Because most of the time they are in a 'precarious' position, the pressure they face is very different from what we feel at Baidu as a platform today. Communicating with these people will broaden our horizons, make us more sensitive to market dynamics, cherish this big platform more and adjust to the changing environment faster."

Inspire high achievers

Baidu's management and staff share the "achiever spirit" and the notion of an "achiever" that summarize well the company's culture and mindset.

In July 2019, Baidu made clear the management requirement to "reinvigorate achievers". It defined achievers as "people who have the will and ability to create sustainable value for the organization", and pledged to offer opportunities and rewards for their efforts. To put it another way, Baidu's business needs to quicken the pace to catch up and surpass rivals by upholding a growth mindset. Everyone in the company needs to unlearn and replace old habitual muscle memory, putting themselves on the path of being forward-looking, goal-orientated and self-motivated.

Climbing to new heights means people have to undertake new efforts, learn new things and outpace the competition. It means giving up the superiority about yourself on achievements in the past. You must avoid resting on your laurels, especially for managers.

How to enable and activate achievers? Baidu has chosen to underpin the effort with management methods and incentives. It requires everyone to stand up to the competition and have the guts to succeed in reaching new heights. It also has incentives and support ready to steer and energize achievers. In practice, when someone accomplishes something, Baidu needs to make a reasonable evaluation and then reward the achievement accordingly with short or long-term incentives or promotion opportunities. This approach is also true at the level of specific business units. Employees in IDG are encouraged to first deliver an outcome, and if it meets the objective they can get promotions and authorization, plus shares and cash bonuses, just like winning a meritorious military medal in a battle. A staff member at IDG said core members of the 5G-powered "Remote Driving Service" project featured by China Central Television in last September were soon rewarded at the end of the month as it was really a breakthrough in progress.

In comparison with KPI, OKR has also proved to be a greater tool for managers to ensure progress. In the KPI era, a manger's role was basically scoring according to predetermined indicators. But with the OKR approach when the objective needs to reflect market dynamics and key results, the specific measures used to track the achievement of that goal also become tricky. This has placed a higher requirement for management capabilities with the transformation like "a chemical reaction vs a physical change" in the view of Cui. She also underlined the importance of OKR's transparency. Consequently, it has driven the management to climb higher, improve and develop new skills.

Leading figures need to work to higher standards

The "achiever spirit" should be manifested not only in management capabilities but also in fostering a strong learning culture and steering progress across the organization's major members. Last March, Baidu demanded management complete 40-60 credits. Robin Li called for executives to also get familiar with mergers and acquisitions (M&A), financial statements and brand management, rather than just leaving these specific tasks to professionals, so they can improve decision-making with a wide breadth of knowledge.

In terms of innovation capability, Baidu now believes that innovation should be more top-down and leaders need to first enhance their own innovation capability and think about how to innovate their business rather than leaving the job to people under their leadership. There might be success stories to get everyone engaged in promoting innovation, but success has a low probability or is the result of luck. Baidu cannot bet on this approach so it chooses to motivate people in key positions to improve their own capabilities and let them identify new ideas and transform them into the business.

While the mobile Internet industry is fraught with new business forms and hefty subsidies to form consumer habits, Baidu focused its investment on AI, also in unconventional ways. When smart speakers became a hit worldwide, Baidu gave priority to the development of its Xiaodu smart display, a smart speaker with touch screen and made it No 1 in the world market. When driverless cars became the new trend, Baidu was determined to pour investment into the road-vehicle cooperative driving system. When cloud services providers competed in the CDN or IasS markets, Baidu concentrated on a deep learning platform and AI chips, providing an integrated service of AI algorithms and computing power.

In a recent meeting, Robin Li shared more of his thoughts on innovation. He said the amazing thing about the Internet is there are more and faster changes than in other sector. There are opportunities all the time, so people must respond proactively otherwise will fall behind. To be more innovative, the methodology can be expressed in the well-quoted saying "to emancipate the mind and seek truth from facts".

Baidu has stressed efforts to improve its internal management and organizational capacity. Robin Li said "the organizational capacity determines the strategic path, and since our launch of OKR, all directors and myself personally must include organizational capacity as one of the objectives".

The company first looks at the performance of a unit's leader, makes seasonal evaluations on his or her organizational capacity, and also reviews the performance in comparison with the market. Once tasked with a management requirement, the head needs to also ensure compliance with the requirement in sections under his or her leadership. Whatever role they play, they can't dodge the issue or evade responsibility. For a leading figure, it's no use saying "we did our best" because what's needed is winning the key victory on a battlefield.