He Came Back, Played a Few Hands, Then Quit: How to Judge Liang Jianzhang's Four Years Back at Trip.com Group

Inside the company and outside it, he seems to come and go exactly as he pleases.

For Yang Bo, even if he gets to the office at seven or eight in the morning from now on, he will never again hear a Wang Feng hit — Life in Full Bloom (《怒放的生命》), say — drifting out of the CEO's office.

At about 10:21 p.m. on the 16th, Liang Jianzhang, CEO of Trip.com Group, sent an internal email titled "A New Management Framework," thanking employees for their hard work and congratulating Sun Jie on her promotion to chief executive officer of the company. Yang Bo thought it came out of nowhere, and the fact that Liang was no longer CEO left him deflated.

At a big company, employees love the small, funny details about the boss. At the company's open-house event in 2015, Liang dressed up as Santa Claus and handed out candy; people told that story for months.

That, of course, is not what Yang Bo was really feeling low about. When he agreed yesterday to talk to QDaily, he assumed it would be the kind of interview where he offered a few words of congratulation to James (Liang Jianzhang's English name). Once he understood what the interview was actually about, he turned serious and said he could not sum up his 47-year-old boss on the spot — "forcing myself to talk about it would go against what I actually feel."

He joined in early 2013, just as Liang was coming back. The company was stuck in a price war, and Qunar, freshly listed, looked unstoppable. This giant of China's online travel market had come to look like a tragic figure, in the capital markets and in the press alike.

As one of the co-founders, Liang was seen as taking command in a crisis when he returned to the CEO post. He said the company had to "start up a second time," and moved his office from the sixth floor down to the fourth. In his words: "Two floors up, three floors down — either way it's convenient, because I need to be running all over the company." Pressure and tension spread through the ranks fast.

Over four years, Liang carried the company from a "mouse-plus-cement" business into the mobile era; big investments and a buying spree have left it with almost no real rivals.

No one doubts the change Liang brought. But the two things sit together oddly — much as the labels "entrepreneur" and "scholar" coexist on Liang himself.

"China has plenty of bosses who run a business well — people like Jack Ma, who's full of passion. What I think is different about my boss (Liang Jianzhang) is that he has a freshness to him. He's kind of cool," Yang Bo said, after thinking about it for a while.

In his first year back, Liang sat with the R&D department and worked through technical problems himself. He holds a master's degree in computer science and once worked at Oracle; his problem-solving was probably no weaker than anyone's on the tech team.

What stuck with Yang Bo was Liang's hunger for efficiency. "His mind moves fast. If you haven't prepared thoroughly, a meeting with him is nerve-racking. There's a fashionable word for it now — dui, to snap back at someone — and he's the type who rolls his eyes and snaps at you, meaning: stop wasting everyone's time. Over time we started holding ourselves to that standard too; getting snapped at once is enough. The executives who see him every day must be even more worn out."

And the company really could not afford to waste time. Xue Beibei, who had just begun covering the travel industry, thought it was on the defensive online and offline alike, with little room to move. She is now chief strategy officer at Qyer, and interviewed Liang in person not long ago.

"When Liang came back in 2013, the company's position in the industry was actually quite precarious. On one hand, the market loved Qunar — people felt it had combined search with standardized products like flights and hotels very well, a genuine innovation in business model. On the other hand, Tongcheng, Tuniu and Lvmama were all active in the capital markets at the time, and there weren't many resources left in the market to draw on."

What drew the most criticism was how slow the company had been on mobile. Liang's first hand was a clear strategy: shift from Online Travel Agency to Mobile Travel Agency, and upgrade the old "mouse-plus-cement" model to "thumb-plus-cement." At the same time he broke the organization into more flexible business units, pushing power, incentives and risk down with them.

"Wireless" — mobile — became the thing Liang poured the most energy into. The most urgent job then was pulling scattered app resources back together: hoping to cover more vertical segments, the company had at one point run five separate official apps; once it turned out the channels were too fragmented and too expensive to maintain, they were folded back into one main app, where you can now find entry points to nearly all of its businesses.

The Wireless Business Unit, briefly spun out and ranked alongside big units like Accommodation and Flights, spent a full year at it. Jiang Hao, the unit's former CEO, said what he dreaded most back then was the boss traveling on a weekend. "He'd email you nonstop and want a solution immediately. He never had an assistant handle his trips — he booked everything himself on our own mobile app, and then came back with a pile of changes he wanted."

By 2014, its mission accomplished, the wireless unit was broken up again and put back inside the other business units. After a year of watching the restructuring and a year of queuing for their own needs to be met, those departments had sharpened their own sense of cost control and product planning, and could solve problems better on their own.

Liang's hunger for efficiency also pushed the whole company to execute faster. "The company really did have some inertia. I wanted everyone to feel the passion and the pressure of starting up a second time," he once said.

On the surface, at least, it worked. In 2014, active users on mobile passed 200 million, and about 40% of new users came from mobile; year-on-year growth in standardized businesses like flights, hotels and ticketing was back on the fast track.

You could read the market's expectations of Liang in the share price: in the eight months after his return, the stock rose 190% and net profit grew 76% year on year; the price-to-earnings ratio hit 49 at one point, above Baidu, Google and Apple.

By then Liang finally had room to think about everything at once. Yang Bo says Liang moved his office every so often, parking himself inside a different business unit. Meetings got more efficient, too — he could finally fit two business units into one day.

"On the surface he seems very nice, but he's actually a bold man. I think Liang is very forceful on strategy — the direction absolutely cannot be wrong." Speaking as an analyst, what impressed Xue Beibei more was the run of moves the company made in the capital markets after Liang returned; in her view, he "played a few hands beautifully."

She meant, of course, the way the company took control of its two big rivals, eLong and Qunar, one after the other in 2015. If buying eLong resembled its earlier investment in Home Inns — a smart financial bet during a slump for Chinese stocks listed abroad — then taking control of Qunar came from squeezing everything out of Qunar's major shareholder, Baidu, and out of the rules of the market.

The deal was an intricate three-way equity swap, and Qunar's proud founder, Zhuang Chenchao, learned the full story only at the very end. The biggest loss in the process was probably handing nearly 25% of the company's stock to Baidu — and remember that it carried out its fourth stock split soon after.

Add the earlier bold investments in Tongcheng, Tuniu and China Eastern Airlines, plus steady attention to riskier areas like airport car rental, travel-journal apps and homestays, and you can see that under Liang the company genuinely meant to use its own cash and every resource it had to pull the industry's upstream, downstream and competitors alike into its fold.

Its posture toward competitors was one of the biggest changes outsiders noticed after Liang came back. Qunar above all: the two had spent a stretch suing each other endlessly and trading public insults, so a fair number of people were stunned when the two announced they would work together.

Which brings up the price war raging at the time. "A price war is something you have to answer; we didn't start it," Liang said earlier. He did not think the model could last, but he was relatively optimistic about how it would end: "We'll fight back, and the result will be that they don't make money and we make less money."

Cash-back, the industry's standard weapon, took a different turn here — it was used as leverage to push the company's own mobile app, or to steer users into following its WeChat official account. And when it was time to spend at scale, the company was not stingy either: in a new round of spending at the end of 2014, it set aside a reserve of 1 billion yuan and prepared for its first loss in the 11 years since its IPO.

"Overseas markets are mostly institutional investors, who care more about how healthy a company's cash flow is, so you can tell that deciding to subsidize after he came back was a hard call for James. It mainly hurts short-term financial performance, and investors might not have understood the play, so before he decided, he had to be ready for the stock to stay under pressure," Xue Beibei said. "But in the end the stock rose, which shows the market accepted the approach."

"I finished my studies, so I came back." Half a year after his 2013 return, that was still how Liang answered questions from the press. The unbothered air he showed the world also took some of the edge off people's anxiety about how bad things were.

Starting in the fourth quarter of 2011, net profit and several other key numbers fell for five straight quarters, and market share dropped below 50% for the first time. Before that, net profit had grown for as many as 11 quarters in a row.

"When you saw the coverage from abroad back then, did it worry you?" a QDaily reporter once asked Liang. "Honestly, I think the population problem is more urgent."

Ten years ago Liang resigned as CEO and went to Stanford University in the United States for a PhD in economics. His recent enthusiasm for population economics shows up in almost everything he says at the company's public events: reporters can barely get him to say two more sentences about the travel industry, and when he does, it is usually as a footnote to other executives' remarks. Raise population or the economy, though, and his calendar opens up fast.

New things attached to that world interest him too — for a while he would grab colleagues from R&D to study the technology behind bitcoin with him.

But beyond its broad social significance, how exactly this academic work gets applied to running a company has always been one of the puzzles outsiders have about him.

"Not many people can do both, but if you have the chance, the two really do complement each other. My idea — population and innovation — only makes sense once you've worked inside a company; and some of the more rigorous methods from academic research really can be used in corporate decisions," Liang said.

"Studying economics helps a lot in building a macro perspective, strategic thinking, and even the nuts and bolts of capital markets — it's an upgrade in how you think. I was trained in economics myself, so interviewing him was really a chance to learn from him. You can tell he's an extremely smart man, quick to react, and his research is solid," Xue Beibei said.

The company's official line is that Liang is retiring without retiring: he will stay on as executive chairman of the board, focused on innovation, internationalization, technology, investment and strategic alliances. The CEO job goes to Sun Jie, who has worked here for more than ten years and held executive posts including chief financial officer, co-president and chief operating officer.

Investment will stay a focus for Liang — this year's new investment directions already include overseas markets like India and the United States. And according to what Liang told the media last night, expanding into international markets is "a more macro thing, and something I'm better at."

Looking back, the company may work for Liang more like a space he controls and runs experiments in:

Keeping a large company running properly, raising efficiency, balancing resources and interests across departments, and holding profit on a rising line to satisfy investors is an interesting business problem in itself;

using the company's resources, he gained room to maneuver in the capital markets that no individual investor could imagine, which let him put money into the parts of the travel industry he believed in most and finally fold them into the company's platform strategy;

and this company of more than 32,000 employees, along with every resource it links up and down the industry chain, also lets him watch some larger trends: online and offline commerce merging, mobile reshaping the traffic dividend, the demographic dividend and the travel industry's dividend both running out...

He can even run harmless, large-scale sociological experiments inside it — employees who wanted a second child, for instance, could take an interest-free company loan to pay the social maintenance fee. And the scrapping of the family-planning policy counts as one of his own long-running personal goals reached.

Between entrepreneur and scholar, Liang probably prefers scholar. But inside the company or outside it, he can fairly be called a man who comes and goes as he pleases.

As for him and the company, they made each other.

(Yang Bo is a pseudonym, at the interviewee's request.)

Graphics: Lingwei Wu

Cover image from Chuangyebang