Organisational structure to keep evolving, says Flipkart

Rejig likely every few years to make company flexible to the changing needs of business

Leading e-commerce player Flipkart has been aggressively hiring top-level talent for the past several months. With nine senior vice-presidents and 14 vice-presidents in place, the Bengaluru-based company appears to have built a strong foundation to tackle the rapid growth in the sector, but it wants to do more.

Flipkart will continue to modify and evolve its organisational structure in line with the changes in the domestic e-commerce industry, according to officials. With no established example to follow in the sector, Flipkart plans to depend on experimentation and learning.

“The organisational structure of Flipkart will continue to evolve, and you could see a new structure every few years, or possibly even sooner. The rate of change that technology is driving in our lives is very rapid,” Mekin Maheshwari, chief people officer at Flipkart, told Business Standard. “This change would mean that businesses and companies will need to remain agile and change rapidly in line with the need of the day. If an organisational structure is far from the reality of what the business is or what the world is, it will get outdated.”

In the past, Flipkart has made several organisational changes. For example, the firm moved from being a hierarchically-flat start-up to a company with around 2,000 employees. Through this process, it brought in layers of senior vice-presidents, vice-presidents, senior directors, directors, and managers. Maheshwari also said the company made a transition when it moved its focus from website to mobile.

Through this year, Flipkart has inorganically added to its senior leadership and also promoted several insiders to leadership roles. Among others, Sanjay Baweja joined Flipkart as its chief financial officer (CFO) after heading finance at Tata Communications for several years. The company also brought on board Rishi Vasudev, who was heading Calvin Klein India, as its head of fashion retail earlier this month. Internally, Flipkart promoted Ankit Nagori, Vaibhav Gupta, Sameer Nigam and Rajnish Bawejaas as senior vice-presidents.

While organisational restructuring at companies often brings in fallout of some top talent, Maheshwari said it is hiring people who have the capability to learn and unlearn, and are not averse to change. With Flipkart re-aligning its internal structure over the last year when it was bringing in talent from outside, the company saw some top-level exits, like that of the then CFO Karandeep Singh and HR head Aparna Ballukar. Both of these executives moved out of Flipkart within around a year of joining. Maheshwari refused to comment on the reasons for these exits.

Experts believe that Flipkart's decision to remain open to evolution in organisational structure is in the right direction as it is very important for an industry like e-commerce, which is in its early stages.

"During early stages, lack of resources and need for flexibility makes it important for employees to wear many hats. As companies grow, the organisation structure has to evolve to address changing needs. This is a natural consequence of growth," said Siddharth Shekhar Singh, associate professor of marketing at the Indian School of Business (ISB). "As far as organisational structure is concerned, it is important to understand that there is no standard model that one must adopt for success.''

A company's organisation structure is a consequence of its market objectives, according to Singh. A company's value proposition for its customers and how it plans to deliver that value play a key role in setting up the organisation's structure, he said. ''After all, the organisation has to support the value creation and delivery process."

While Flipkart has no role-model in India that it could take lessons from, Maheshwari, who has earlier headed technology at Flipkart, said the company learns from global examples and from players in allied sectors like supply-chain. "We seek out learning; we seek out where have these things played out, and how are these things structured. But then we look at what is relevant for us at our stage today and what is relevant for Indian customers today. That's how we arrive at the right solution," Maheshwari said.

ISB's Singh also believes that while there are global companies in the e-commerce space that are at more advanced stages of evolution, it would be "risky" for the Indian players to copy them without "experimenting and tailoring" their models to the "Indian context".

The need for agility at Flipkart is also triggered by the fact that technology adoption in India is evolving rapidly, Maheshwari said. "How long will it take for wearables to become part of our lives? I don't think you or I can put a number to it today. Will it be in five years or ten years? If everything could be planned, life would be very different."

Calling it a "venture capital-drive human resource model", B S Murthy of Human Capital Consulting says this need for flexibility and openness to changing organisational structure is driven to a great extent due to the venture capital (VC) investors, who have a liking for mergers and acquisitions and thus like agile structures.

"One of the primary drivers for agility is the venture capital investors. With their involvement, the M&A activity could remain high and so you need to keep your organisation agile and lean. For example, you may build capacities around one category, but what if tomorrow the VC prompts you to acquire a player in that sector? Then your team is redundant," Murthy said. "There will be a rapid growth in the e-commerce industry going forward, and I believe that at least 50 per cent of this will come from M&As. That will lead organisations to continue changing.