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

3. A closed-loop management system

A company's culture is both the root of growth and the ultimate demonstration of its resilience. Baidu has built its rise from logical thinking and a committed belief in technology.

When talking about a company's culture, it's necessary to make abstract ideas concrete, said Cui. She went on to illustrate that by drawing an analogy with aerial reforestation, spraying seeds through the air by mechanical means. "You can't just spray the seeds and stop. You need to take care of the saplings and make sure they live and thrive, so this needs a closed-loop approach," said Cui.

Upholding the idea of "Simple and Reliable" needs more than a clear definition. It has to be included in the performance evaluation, just like Alibaba and Huawei have practiced. At Baidu, among performance evaluation indicators, compliance with the company culture has been given the veto power. The evaluation system has undergone several iterations since 2019. At first, colleagues and associates were automatically chosen to score a staff member with three possible grades – A, role model; B, majority; C, to be re-evaluated. After finding that over 10 percent were given grade A, an "abnormal" ratio in the view of Cui, the evaluation system was updated in 2020. Now for the question if the person being evaluated is in line with Simple and Reliable, the multiple-choice answers have been replaced by a yes-or-no response.

Incentives reflect priorities

Efforts to enliven the core value of "Simple and Reliable" are also supported through incentives that can drive behavior and spawn culture. In late September 2019, when shares of Baidu plummeted to the lowest in what proved to a U-shape recovery, the company launched its largest-scale share incentive plan called Zhiqingyun, which literally means a person with sky-high ambitions, to reward a large portion of key workers, the high achievers who are willing and capable of scaling new heights. The program benefited about 60 percent of those in the employee stock ownership plan, so it was not a way for everyone to get a trophy.

After Baidu bounced back from the bottom, the management took just an hour on December 31 last year to decide to give what it called a "U bonus," half a month's salary, to those who stayed with the company throughout the whole period of two years. The reward also reflected Baidu's recognition of employee loyalty, one of the seven dimensions of its core value, and a part of its closed-loop management.

Baidu's effort to underline its company culture has always been accompanied by turning ideas into specific moves. Cui said that Baidu really rewards people in upholding its core value rather than just talking the talk. "To make a simple summary of the essence of management, I would prefer to emphasize the concept of closed-loop. Fundamentally, a company's incentives should align with its code of ethics, and it should recognize merits that it considers in performance evaluation. "

Get everyone on the same page

It took Baidu six months to transit its management method from KPI to OKR (objectives & key results) in 2019. In the transition, Baidu still needed to evaluate performance but already shifted to align with the new goals and tracking methods.

Two years after the transition, a member of Baidu's IDG (Intelligent Driving Group) shared his ideas about how OKR helps facilitate the commercialization of self-driving technology. "OKR is really a tool. Through this tool, we can understand how to promote the commercialization of technology at the company level, how members of each department can get involved in actionable steps, and how each team can contribute to specific metrics. Through quantifying the objectives and breaking them down into smaller tasks, all are now able to know what they are doing, what the next step is, what value can the outcome bring and what is the sense of achievement I can get. Everyone becomes very clear."

In the closed-loop management, Baidu made compliance with the value of Simple and Reliable an essential. This hard-and-fast rule is in sharp contrast to practices in some companies where there are great variances in whether or not employees will read materials describing the company's strategy and organizational culture, and whether they accept that vision. But at Baidu, the requirement is unyielding, well-supported by performance evaluations and reviews.

The internal meeting to instill the importance of Baidu's core value hosted by Cui had two sessions each season, including one of the two that was livestreamed. In many of the 20 sessions held so far, Robin Li was the guest speaker. In one or two weeks after such sessions, Baidu usually sent coursework to frontline workers followed by a quiz on core points and ideas such as what is innovation and how important a business unit is. Over 80 percent of Baidu's staff members have undergone such training.

In addition to the assessments, the Organization Culture Department also regularly asks staff members how they feel about their work or a particular strategy. In this way, the management can get a picture of staff's sentiment in advance, foster a sense of community and then work out a more effective way to get everyone aware of the knowledge and ideas that need to be understood and applied. Such efforts help make a strategy more approachable and the workplace culture more transparent and supportive.