What makes Flipkart tick

Flipkart has many achievements under its belt, but one of the biggest may be its sheer ability to stay ahead of a very aggressive Amazon for over three years now. The standard-bearer of Indian e-commerce needed to get a lot of things right to do this. So what is it about Flipkart’s DNA and work culture that has helped it in its battle for supremacy even as it struggled with its internal battles?

Mekin Maheshwari, who joined Flipkart in 2009 as Head of Engineering and continued with the company in different positions until March 2016, says it is because Flipkart got the early team mix right. Especially in technology. Getting the fundamentals right early was important because that is what helped Flipkart win over sceptical customers right from the beginning. “The tech team at Flipkart was good not just from a capability point of view but also in ownership and leadership,” says Mekin, who now runs Udhyam, a non-profit education venture.

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Ankit Nagori, who was with Flipkart from 2010 until 2016, says Flipkart’s ability to take big bets and most importantly, to see the problems through a consumer’s lens, sets it apart. “The resilience, spirit of fighting back—these are part of the Flipkart culture,” says Ankit, who has since co-founded CureFit, a health and fitness startup.

Sameer Nigam and Rahul Chari have the distinction of having had two of their startups acquired by Flipkart. In 2012, Flipkart acquired their digital distribution platform Mime360, after which both worked at Flipkart until 2015. They then left to found mobile payments startup PhonePe, which too was acquired by Flipkart a year later.

Sameer says it was not the sheer size of the company that convinced them to rejoin Flipkart:

See, size is attractive when they are seeing it from the outside, but once you have been inside, you know a lot more, so you don’t come back the second time only for size. Familiarity, of course, helped. But the main thing is…I wouldn’t just use the word innovative. I think in the Indian context, it is a very bold company. We have done many things and we have failed on many things, but we have always come right back. I love that we don’t give up easily as a group. And the fact that we are open to the idea that we can’t do it all internally and are willing to look outside, like we did with Myntra.”

Rahul, who headed supply chain technology before he quit Flipkart to launch PhonePe, adds that if there is a sense that a consumer will benefit from an initiative, Flipkart is willing to give it a shot. “In that process, mistakes or poor execution have happened, and that is also taken in their stride. We either give it another shot or shut it down. But we invest in the team and give them time, give them the space to do what needs to be done—that has always been our strength,” says Rahul.

After Flipkart acquired Mime360, Sameer and he worked on its music streaming business, Flyte. But when they realised it wasn’t working, that business was shut down. However, it was not the end of the road for either Sameer or Rahul. Sameer went on to lead online and mobile marketing and then engineering. Rahul went on to build Flipkart’s tech for supply chain management. “You don’t get rewarded or penalised for outcome alone. It is very outcome-driven but more important is method. You could try really hard and if for whatever reason the market is not ready, that is ok. You don’t kill the innovation engines. You just redeploy the engines. That is very comforting,” Rahul explains.

This is not to say that Flipkart has got its people management entirely right. 2015 and 2016 saw massive churn. Flipkart hired senior executives like Peyush Ranjan and Punit Soni from the Valley. But these hires did not work out. “We saw groups, like an (ex-)Google clique, forming. It wasn’t good for the company,” says a former Flipkart employee. Mekin, who was Chief People Officer from 2013 to 2016, says candidly:

We were looking more outside than inside and that didn’t work well for the company. I wish we could have used the talent available internally much better.”

A Flipkart spokesperson admits that they could have built the organisation better. “In 2015, we grew rapidly and brought in a lot of new senior leaders. In hindsight, it was too much of a shock to the system. The deep-rooted entrepreneurial culture at Flipkart was affected because of the magnitude of these shifts,” he says, adding that the company carried out a series of corrective actions for a large part of 2016.

“We went through a lot of pain. But we did it, although we lost some time. In hindsight, we could have done it better. 2016 was an important year, because we faced challenges and we overcame it. To build a great company that can survive for 20-30 years, what you need the most is resilience. The business is so unpredictable that it is impossible to say what could be your mistakes. It will happen. Your ability to bounce back – for leaders individually and the organisation – is critical,” the spokesperson says.

However, a consultant who has worked with Flipkart for many years says more needs to be done to fix the company’s approach to human resources. “It has become a hire-and-fire culture. No one knows on a Monday who will get fired,” says the consultant. “But they are now attempting to repair it. That’s a start.”

Top leadership has also not been spared. Co-founder Sachin Bansal, who was CEO right from the start, was made Executive Chairman in January 2016. Co-founder Binny Bansal became CEO. That same year, former CFO and long-time Tiger Global executive Kalyan Krishnamurthy re-joined Flipkart to oversee business functions and was then made CEO in January this year. Binny became Group CEO. All these changes have resulted in shifts in focus and policy internally and a perception, in the external world, that Flipkart’s management is in flux.

Mrigank Gutgutia, Engagement Manager and e-commerce expert at advisory and research firm RedSeer Consulting, says Flipkart cannot afford too many changes at the top. “For Flipkart to achieve its targets, it should not have too many leadership changes. Such changes just confuse strategy internally.”

Flipkart’s management changes may simply be the growing pains that young companies go through when they scale up rapidly . But if Flipkart wants to maintain its slim lead over global behemoth Amazon, it needs to ensure that the revolving door at the management level remains firmly shut for now.