{"id":5791,"date":"2018-06-11T14:35:00","date_gmt":"2018-06-11T14:35:00","guid":{"rendered":"https:\/\/www.thirdeyesight.in\/?p=5791"},"modified":"2022-11-14T14:59:15","modified_gmt":"2022-11-14T14:59:15","slug":"flipkart-walmart-how-will-work-culture-change-for-the-alliance","status":"publish","type":"post","link":"https:\/\/myechoproject.com\/TES\/flipkart-walmart-how-will-work-culture-change-for-the-alliance\/","title":{"rendered":"Flipkart-Walmart: how will work culture change for the alliance?"},"content":{"rendered":"\n<p>Written By Athira Nair<\/p>\n\n<div class=\"row\"><div class=\"col-sm-6\">\n<img decoding=\"async\" data-src=\"https:\/\/www.thirdeyesight.in\/wp-content\/uploads\/2022\/11\/Walmart-CEO-Doug-McMillon-with-Flipkart-Co-Founder-and-CEO-Binny-Bansal-2.jpg\" class=\"img-fluid lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\">\n<\/div>\n<div class=\"col-sm-6\">\n<p>Beyond tech and business, work culture is a matter of concern when it comes to integrating Flipkart with Walmart. How will this play out in the next couple of years? Walmart CEO Doug McMillon with Flipkart Co-Founder and Group CEO Binny Bansal On May 9, at the town hall to announce the acquisition of Flipkart by US retailer Walmart, Flipsters, as Flipkart employees call themselves, had one big question \u2013 <b>would there be firings?<\/b><br><br>\n\nThe concern was genuine as Walmart has a history of imposing policies on its acquisitions to results that are not always employee-friendly.<br><br> \n\nAt the town hall, Flipkart Group CEO Binny Bansal was firm in assuring his team that there would be no firing of employees. In fact, he said there would be more hiring for new initiatives that were being planned.<\/p>\n\n<\/div><\/div>\n\n<p><b>Attending to the unasked question of Walmart setting the rules now, he had added that no processes (from Walmart) would be imposed on the team; but if they wanted to adapt any process from Walmart to Flipkart, they would be given the chance to do so.<\/b><br><br>\nAfter all, now on, Flipkart would be run as a retail company, not an internet company.<br><br> \n\nIt is obvious that that beyond tech and business, work culture is a matter of concern when it comes to integrating Flipkart with Walmart. The former is India\u2019s ecommerce leader, and the latter is the world\u2019s biggest retailer. Flipkart\u2019s entrepreneurial culture has always been its hallmark, as opposed to the 56-year-old titan from Arkansas, which follows a more traditional culture with set practices.<br><br> \n\nAccording to Kartik Hosanagar, Professor of Internet Commerce at The Wharton School of the University of Pennsylvania, it will be a mistake for Walmart to impose its culture on Flipkart. He believes Walmart will be eager to share its know-how and processes with Flipkart. \u201cBut Walmart has tested the waters in India previously, and other Asian markets and it recognises that these markets are different in many ways. <b>If company culture is being dictated from the US, the Flipkart deal will fail,\u201d<\/b> he says.<br><br> \n\n \n<b>Tips for successful integration<\/b><br><br> \nAs the two giants join hands, choices made now will be critical in the long term. Of course, it will be a function of how, and how much, they integrate. Experts believe the impact will be visible only after a year or so.<br><br> \n\n\u201cOn the operations side, Walmart would not want to disturb anything immediately. It may cause Amazon to take a lead in business. Likewise, there may not be changes in the senior leadership immediately,\u201d says Anuj Roy, Head of Digital Practice at global executive recruiting firm Transearch.<br><br> \n\nKartik adds a significant example: When eBay acquired Chinese ecommerce company EachNet, it imposed its culture on the latter and also asked EachNet to drop its China product and switch to the eBay US product.<br><br> \n\n<b>\u201ceBay believed that they had a superior product in the US. eBay soon lost the China market to AliBaba. This has been a well-known lesson for US companies that believe that company culture or product design can be dictated from here. I think Walmart will let Flipkart\u2019s product and tech teams remain independent, at least for the next several years,\u201d he says.<\/b><br><br>\n\nHe adds that where Walmart might leverage Flipkart will be in introducing some of its private label brands to Indian consumers through Flipkart, and also in opening offline stores using the Flipkart brand.<br><br>\n\nAccording to HR expert Saurabh Deshpande, the three things that will be most important to make the integration successful are:<br><br> \n1) Vision and purpose: Why did the deal happen? What is the vision for Flipkart moving forward? These need to be articulated and communicated, to energise employees.<br><br> \n2) Clarity: Clearly communicate the integration roadmap, how it will impact people. Listen to what team members have to say, address their questions and concerns.<br><br> \n3) Change agents: Identify team members on both sides (Walmart should leverage people from WM Labs as well) who will help drive the transition and change. Involve this group in the planning and execution.<br><br> \n\nOf course, integration without the wheels coming off the acquisition will not be easy.<br><br> \n\nAccording to TN Hari, HR Head at BigBasket and Strategic Advisor at The Fundamentum Partnership, the foundation of any successful integration in an M&amp;A context is mutual respect for what the other brings to the table.<br><br> \n\n\u201cIn this context, Flipkart brings innovation and entrepreneurial zing while Walmart brings thoughtfulness and stability. Walmart could do with some entrepreneurial zing if it needs to adapt and stay relevant, while Flipkart could do with some deliberateness and process orientation,\u201d he says.<br><br> \n\nNeedless to say, efficient integration will bring benefits for both parties. \u201cIt is about making two sides leverage each other\u2019s tech, domain expertise, and supply chain. It needs a pragmatic approach &#8211; pick the best from both players, what worked for them in their success,\u201d says a former executive at Flipkart, on condition of anonymity.<br><br> \n\n<b>Interdependencies and attrition<\/b><br><br> \n\nAccording to Devangshu Dutta, CEO at Third Eyesight management consultants, Walmart has a good sense of product development, sourcing, and supply chain. \u201cFlipkart is big in commodities products like books, mobile, fashion etc and they operate well independently. But a sense of product management does not permeate Flipkart as they are a marketplace,\u201d he says.<br><br>\n\nWhen Walmart, which has been waiting for more than a decade to enter Indian retail, finally gets a chance to play its next big game, the integration would create some well-intentioned and much-needed interdependencies. <br><br>\n\nBut, according to Hari, not everyone at Flipkart (especially at the senior level) may like this, and may move on.<br><br> \n\n<b>\u201cThat\u2019s got nothing to do with Walmart, nor does it mean a failure in integration. It is just a reflection of such individuals not being able to adjust from being independent to becoming interdependent,\u201d he says.<\/b><br><br>\n\nAnuj, of Transearch, believes a lot of people may cash out their ESOPs because of this. \u201cAnyway, the incentives are limited. Some people at the VP level and above will cash out as there are no long-term incentives,\u201d he says. Co-founder Sachin Bansal leaving itself is proof that when founders are not majority stakeholders in VC-driven companies, it is better to cash out to avoid management clashes. (It was earlier reported that Sachin\u2019s exit was due to the limited control given to him under the new structure.)<br><br> \n\nHe adds that Flipkart will try to retain key people who would not mind sticking around with Walmart (unless they are entrepreneurial). Many ex-Flipsters have gone on to establish themselves as entrepreneurs, an example being Bengaluru-based startup Udaan, which was launched by Sujeet Kumar, Amod Malviya and Vaibhav Gupta, all three of whom worked with Flipkart until a few years ago.<br><br> \n\nHari Hari adds, \u201cOver a period of time, Walmart would certainly bring in elements of culture that they deeply value. After all, it is these elements of culture that have made them what they are today. Any M&amp;A always results in some attrition at mid to senior management levels. This attrition isn\u2019t really bad. It is natural selection. Those that fit in best and adapt would continue. The others would find new homes.\u201d<br><br> \n\nHe reiterates that while the Flipkart CEO will report to an executive at Walmart, the rest of the Flipkart management team should be insulated from the functions at Walmart for a period of 12 months.<br><br> \n\n\u201cAfter 12 months, some cross-reporting relationships could be introduced. Some FK leaders should be given leadership roles in the combined entity, or in the larger Walmart organisation,\u201d he says.<br><br> \n\n<b>Flipkart\u2019s extravagance, Walmart\u2019s austerity<\/b><br><br> \n\nConsistently efficient operation is Walmart\u2019s key to offering low prices to the customers. In fact, its Every-Day-Low-Pricing (EDLP) strategy is a result of efficient methods in sourcing, supply chain, and front-end operations. The company has the same motto internally as well.<br><br> \n\nWhile Flipkart likes its luxuries, be it swanky offices or huge pay packages to fresh graduates, Walmart executives still fly economy class. It has only been a few months since Walmart made its minimum wage $11 per hour, following protests about the meagre pay to its employees.<br><br> \n\nAnuj says there will be some tightening of the purse strings as Walmart wants to grow Flipkart for an IPO. \u201cWalmart will be more focused on where they invest in. It (their investments) will be more thought through,\u201d he says.<br><br> \n\nKartik Hosanagar For the new entity, Kartik is positive that compensation and payroll expense will be under supervision from Walmart. \u201cBut they will also be cognizant of the need for pay to be competitive with that of Amazon,\u201d he says. Sources inside Flipkart tell YourStory that new processes in finances are already on the way. According to one person aware of the developments, there is strong synergy with the US team in putting more processes in place, like revamping the appraisal system.<br><br> \n\nAn ex-employee at Walmart Labs, on condition of anonymity, says that although the retail side of the American company is known for its frugality, the tech employer is a paymaster at par with Amazon or ZoomCar.<br><br>\n\n\u201cSenior directors in the company, both tech and retail, are mostly those who have been with the company for 20-25 years. One of them was a trolley boy at Walmart retail, who learnt new skills and rose in the company.\u201d<br><br>\n\nSaurabh agrees that Walmart has already shown the willingness to adapt. \u201cWalmart Labs in Bengaluru has been able to attract and retain some great technical talent including people from successful Indian startups,\u201d he points out.<br><br> \n\n<b>Tradition meets startup culture<\/b><br><br>\n\nThe ex-employee from Walmart Labs says attrition rate was high at Walmart Labs as things were \u201cslow-moving.\u201d He says the pay is high at Walmart for the best talent, since it is a legacy company. \u201cBut it has defined processes, and any change will need permission from multiple levels. It is not intellectually satisfying. The company has a traditional mindset and low-risk appetite.\u201d<br><br> \n\nThese sentiments are echoed by another Walmart (retail) executive in the US, who says that since Walmart is a huge company, its pace of innovation is not as fast as smaller companies. \u201cWhile it cannot run as a startup, you can do 100 things in one month,\u201d says the ex-employee at Walmart Labs, adding that Walmart also offers a clear work-life balance. \u201cEveryone leaves the office at 6 pm. If you are staying late, especially women, you have to get the manager\u2019s approval,\u201d the former employee says.<br><br> \n\nOn the other hand, startups often tend to have a toxic work culture with crazy work hours as a result of poor planning, a total lack of work-life balance, the tendency to turn a blind eye to harassment of all kinds, and an unmitigated bro culture. Thus, according to Hari, some of the changes that Walmart would introduce would be welcomed by employees.<br><br> \n\nAfter Walmart\u2019s acquisition of US ecommerce portal Jet.com, reports had surfaced that the latter\u2019s startup culture took a hit, with Walmart banning alcohol consumption, and even cursing in office.<br><br> \n\nHari believes senior-level executives at Walmart would not embrace the startup culture of Flipkart. \u201cMy sense is Flipkart, in three to five years, would become indistinguishable from the rest of Walmart,\u201d he says, adding that cultures are what founders and companies create. \u201cIn terms of culture, companies founded by millennials are likely to be very different from companies founded by, say baby boomers,\u201d Hari opines.<br><br> \n\nHowever, Saurabh believes culture is never static. \u201cIt is like a living, evolving set of behaviours and actions. So, in that sense, these two cultures (traditional corporate vs millennial) that we perceive as opposite ends of the spectrum are actually evolving, at some converging point along the spectrum. At what side of the spectrum will the convergence point be is something that varies with company and industry,\u201d he says.<br><br>\n\nIf Walmart-Flipkart integration works out without too many headaches for the human resources team, a new story in work culture may begin now.<\/b><\/b><\/p><b><b>\n\n\n<p>Source: <a href=\"https:\/\/yourstory.com\/2018\/06\/flipkart-walmart-will-work-culture-change-alliance\" target=\"_blank\" rel=\"noopener\">yourstory<\/a><\/p><\/b><\/b>\n","protected":false},"excerpt":{"rendered":"<p>Written By Athira Nair Beyond tech and business, work culture is a matter of concern when it comes to integrating Flipkart with Walmart. How will this play out in the next couple of years? Walmart CEO Doug McMillon with Flipkart Co-Founder and Group CEO Binny Bansal On May 9, at the town hall to announce [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-5791","post","type-post","status-publish","format-standard","hentry","category-press-quotes"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Flipkart-Walmart: how will work culture change for the alliance? - Third Eyesight<\/title>\n<meta name=\"robots\" content=\"index,follow\" \/>\n<link rel=\"canonical\" href=\"https:\/\/myechoproject.com\/TES\/flipkart-walmart-how-will-work-culture-change-for-the-alliance\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Flipkart-Walmart: how will work culture change for the alliance? - Third Eyesight\" \/>\n<meta property=\"og:description\" content=\"Written By Athira Nair Beyond tech and business, work culture is a matter of concern when it comes to integrating Flipkart with Walmart. 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