Baidu lost its top AI expert LU Qi before it could make a spectacular turnaround (Part 2/2)

He made Baidu leaner, then left.

Soon to be Ex-President and Chief Operating Officer of Baidu, LU Qi

After working at Baidu for 486 days, LU Qi is stepping down as the President and Chief Operating Officer of the company due to “personal and family reasons”, effective July 1, 2018. The news was announced by Robin LI, co-founder and CEO of Baidu, in an email to his employees on 18 May 2018.

This is the Part 2 of a 2-part series. Read Part 1 here.


2. LU Qi and Baidu’s corporate culture

The way LU Qi works had been shared among employees: He works like a machine, sleeping only 4 hours a day, with his life split between his office and the hotel he stays; he attends to everything himself and went so far as to redesign the company’s weekly report, specifying what should be included in each paragraph; he replies to emails from junior staff.

These made him a favored leader among employees.

But what really won him recognition company-wide were his efforts to reshape Baidu’s corporate culture and, in particular, to remove the blockage in the company’s system that had kept the messages of rank-and-file employees from reaching the top.

Bureaucracy, factionalism and the selfishness of some of its senior executives were previously seen as the main problems plaguing the giant’s corporate culture.

“In fact, Robin has a deep aversion to bureaucracy. He gives much power to the people under him, some of whom, with separate motivations, are just messing with him. They know what the company needs, but they don’t care. They only care about if the work they do would make them look good when they report to their superiors. This has prompted junior staff to pick their work accordingly,” an insider told 36Kr, a Chinese biztech media.

Such selfishness of the middle and upper management translated into an obsession with KPIs across the company, said the above insider. “Why else do you think has Baidu failed to get rid of those unprofitable junk ads in its products despite its technological strength? They know their existence. They just decided not to do anything about them.”

All these, as well as Baidu’s panic following the outbreak of the Wei Zexi advertising incident, had painted Robin LI as a CEO fooled by the people under him.

Others have attributed Baidu’s problematic corporate culture to Robin LI’s character. He is an affectionate person, a typical IT guy, but he does not stand out as a leader, especially one who has to manage a company with 50,000 employees.

Such was the state of the company when LU Qi joined: The management prioritized their own interests above everything else; factionalism was running high, and the messages from rank-and-file employees couldn’t get to the top.

To address these problems, LU Qi initiated the “New Direction” conference, a regular occasion where the head of one of Baidu’s business segments is invited to communicate with employees and answer the most asked questions on the company’s intranet.

Some questions were tough. An employee once asked LU Qi straightforwardly why Baidu’s products were all mediocre. Others were more practical: “Developing a new system and maintaining an old one mean completely different things to an employee wishing to get promoted. The result is that people flock to develop new systems and no one wants to maintain the existing systems. What can be done about this?”

“Sometimes no solutions were provided, but in a sense, it’s enough that those at the top are made aware of the problems,” a Baidu employee said. LU’s candidness has never before been seen in Baidu’s management.

Such openness would have been inconceivable a few years back.

Employees were left with the impression that if they had a message for the company’s management, they would have a better shot at delivering it by targeting COO LU Qi than any other executives at the director level. This is strange for a large company like Baidu.

It reminds people of the leader of another giant – Tencent’s Pony MA. The former director of Tencent’s microblog product who goes by the name of “Hecaitou” once wrote on Zhihu, the Chinese equivalent of Quora: “Tencent operates more than 1,700 products and he (Pony MA) keeps a close eye on a large number of them. It’s a pleasant experience discussing products with him via email. It’s basically the kind of discussion you would expect between two product managers. And if your ideas touch him, he would immediately rope in relevant general managers and vice presidents into the discussion to push the ideas forward.”

LU Qi would reply emails from junior staff in hopes of spotting problems in Baidu’s product system and operation. What’s more, in order to better understand the needs of young users, he made himself an active user of a wide array of apps, including Baidu Mobile. He would also initiate one-on-one chat sessions with employees who voiced their opinions on the company’s intranet.

At a recent “New Direction” conference, LU Qi said that the company’s overall strategies had been straightened out, but a lot remains to be done.

3. A high-speed train helmed by a new driver

Search advertising has proved lucrative for Baidu over the past few years, but it has also robbed the company of its sharpness. The future LU Qi envisioned for Baidu was one where the company would build an Android-like product in the sphere of AI and thus break its dependence on advertising. DuerOS and Apollo are thought to play a decisive role in helping Baidu achieve this vision.

In a speech at CES 2018, LU Qi declared, somewhat proudly, that Baidu’s AI business, Apollo in particular, was an example of “China Speed.” But the question now is: Will the high-speed train that Baidu keep on track after a new driver takes control?

There are precedents in Baidu’s history where a product or business failed after the person in charge left.

Now that the baton is back in the hands of Robin LI, who must balance the power of the company’s leadership and push ahead with the reform LU Qi has started.

IDG and SLG were Baidu’s two core AI businesses and were previously headed by LU Qi. According to the email Robin LI sent to employees after LU Qi’s resignation, LI Zhenyu, general manager of the IDG, will report to Zhang Yaqin, while JING Kun, who has taken the post of general manager of the SLG, will report directly to Robin Li for the time being. Going forward, Baidu may find it hard to find someone like LU Qi. And Robin LI, who has put most of his focus on the news feed product, will likely appoint a new leader for the SLG instead of heading it himself.

It’s worth noting that more than one third of the content of the above mentioned email is about WANG Haifeng, the AIG general manger who has been promoted to senior vice president in the latest reshuffle.

According to the information provided by Baidu, WANG joined the company in 2010 and has helped found a number of Baidu’s business departments, including the department of natural language processing, data R&D, recommendation engine and personalization, multimedia, image search and voice technology; he previously served as the vice general manager of Baidu’s search business.

In March 2017, WANG took over Andrew Ng as the director of Baidu Research after the latter left amid factional pressure. WANG thus became the general manager of the AIG and a member of Baidu’s E-STAFF, being seen as the winner of the latest wave of factional fighting at Baidu.

The AIG headed by WANG provides the necessary underlying technology and data for the development of DuerOS, which is overseen by JING Kun, but the two are also competing with each other. The former is secretly developing its own robot products, an insider revealed to 36Kr.

After LU Qi’s resignation, Baidu, which has gone all-in in AI, will need someone to fill his shoes, and this person must have the capacity to coordinate Baidu’s AI businesses and reduce internal friction. For now, it’s unknown whether Baidu can find such a person or even know where to start looking.

The share price of Nasdaq-listed Baidu dropped 7% before trading the day after the news of LU Qi’s resignation broke.

An employee approached by 36Kr was not optimistic about the future. “Even if a second ‘LU Qi’ emerged, he or she would eventually be forced to leave by factional conflicts.”

LU Qi’s 486 days at Baidu injected new vitality into the company, but apparently, Baidu has failed to provide the reformer with the sense of belong he’s looking for.

This is Part 2 of a 2-part series. Read Part 1 here.

Writers: SUN Ran and YANG Lin

Editors: YANG Xuan and FANG Ting