India’s largest e-commerce player Flipkart has begun looking for its next generation of leaders from within the company after failing to build a world class culture by hiring its top management from outside.
In January this year Flipkart underwent a massive top management restructuring that saw Binny Bansal take over as CEO from partner Sachin Bansal. Several executive roles were also changed, resulting in a slew of exits including that of Punit Soni, Mukesh Bansal and Sanjay Baweja.
“A bunch came together and then they really built the company, but it is fair that last year we were largely looking outside and I think it was too much. So my core philosophy has been to re-pivot from hiring to a lot more internal talent development,” said Nitin Seth, Chief Administrative Officer at Flipkart.
Since the start of the year, Flipkart has cut down the size of its management team from 18 members to eight today. The new management team, including Kalyan Krishnamurthy who was brought in from Tiger Global (one of Flipkart’s largest investors) is now believed to be a lot more confident and focused.
Flipkart’s game of musical chairs with its top management India Business News came at a time when rival Amazon was growing its business by investing heavily in the country. The US retailer has managed to close the gap between it an Flipkart and is within striking distance of taking over the leadership position in India.
Binny Bansal now has a hard task of growing the company while fending off Amazon, and in the nine months that he’s been at the helm of the company, there have been positive signs of change. In the recent festive sales, Flipkart is believed to have sold far more products than Amazon and remains clearly in the lead according to industry watchers.
Core to this change is a complete overhaul of Flipkart’s culture, says Seth. “If you always bring senior talent from outside you cannot hold the culture, so we have put the focus on internal talent development. Earlier we would have probably gone to the market, instead we have chose to promote young talent and they are doing exceptionally well.”
Flipkart is now looking at putting in place a system for internal talent development that will give people who’ve been in the company a chance to grow. It is also encouraging its employees to stay for longer stints by offering ESOPs. It claims that 40 per cent of all eligible people in the company have been offered stocks.
Even when it comes to hiring new talent, Flipkart is working on rationalising its costs. While the it has come to be known for exuberant spending on top talent, it says that that was a part of a strategy and has now set benchmark salaries for every role in the company.
“We erred too much to this side (hiring externally) in the past but very clearly it is encouraging our internal talent. That is also something we have to get better at. We are exceptional at attracting great talent and giving them impossible tasks to work on. But now we have to develop them so that they can do different things,” added Seth.