Sachin Bansal, the Flipkart co-founder confessed that he was replaced as chief executive due to performance. He admitted this at the monthly meeting on Friday.
This dispersed the tensions immediately, nearly 200 employees cheered and applauded, which is rare in the corporate world.
This year Flipkart, India’s largest online marketplace has been affected by several high profile executive exits, staff reductions, mutual funds and competition with world’s largest online retailer Amazon.
Some experts saw Bansal’s candidness to confess his replacement as a strategy to win back employees’ trust and boost confidence at the same time when it is preparing for the festive season which starts from next month.
Binny Bansal replaced Sachin Bansal in January. Sachin Bansal told in the Friday meeting, “Look at the top level around you. Everyone has changed. In fact, even I am gone. Some of our targets have been missed and everyone, including the top management, has paid the price.”
Flipkart was set up in 2007 and sells everything from books to cellphones. Earlier this year the company’s valuation fell from $15 billion to $11 billion.
Binny Bansal and human resources head Nitin Seth were also present at the 19th August meeting. The meeting was held at Flipkart’s 2 million sq-ft campus, Cessna Business Park. In this monthly meeting employees are allowed to send questions anonymously and the management addressed the most voted questions.
This was the first meeting after Flipkart asked 700-1000 employees to either resign or be sent off with severance pay. An employee said that Sachin and Binny were a kind of people who acknowledged things when they screw up.
Binny Bansal was handling all business areas including commerce, in-house logistics unit E-kart and Myntra in January. Sachin Bansal focused on strategic direction, looking for new investment opportunities and mentoring the senior leadership.
Also, several top administratives left Flipkart this year including chief business officer Ankit Nagori, former chief product officer Punit Soni, Myntra founder Mukesh Bansal who was heading the company’s commerce platform and very recent the legal head Rajinder Sharma.
Kalyan Krishnamurthy, managing director at Flipkart’s largest shareholder Tiger Global Management joined the company in June to lead the commerce platform. He had worked at Flipkart between 2013 and 2014 and then he served as chief financial officer and head of category management.
Competition between the companies to win customers through wide discounting has led to increase losses for Flipkart, Amazon and Snapdeal.
Full Flipkart statement –
“At Flipkart, we have an open and transparent culture. The town hall that we conduct regularly, is one of the pillars of this culture of openness. Our performance metrics are freely shared to encourage a collaborative environment. Anybody is free to ask any question, challenge existing norms and hold the leadership accountable for business and organization metrics. We believe this leads to an environment of trust, openness and respect and is one of the building blocks for our organisation of the future. We are also probably the only large company in India to have this open and collaborative culture.
While the performance management philosophy was part of the last town hall discussion, an overwhelming majority of the time was spent on discussing the great strides that Flipkart had made in its business performance. Some of the key highlights of the town hall included Flipkart raising the game on execution, notably increasing speed of customer deliveries, upping the stakes on product quality resulting in significant growth in customer NPS score as well as maintaining a healthy lead over competition.”