When CXOs quit

Why start-ups need to create teams, focus on communication and ensure the business keeps evolving


Flipkart co-founder Sachin Bansal. Photo: Hemant Mishra/Mint
Flipkart co-founder Sachin Bansal. Photo: Hemant Mishra/Mint

On 15 August, Flipkart co-founder Sachin Bansal tweeted a quote by Mahatma Gandhi: “Strength does not come from winning. Your struggles develop your strengths. When you go through hardships and decide not to surrender, that is strength.”

Four days later, he disclosed in a monthly meeting that he had been removed as the chief executive officer of Flipkart in January owing to poor performance—an admission that admittedly requires immense courage (he continues to function as the e-commerce firm’s executive chairman).

Soon after the admission, though, there were media reports speculating that Bansal’s disclosure was a tactical move to pacify employees. Mint reported on 22 August that “Flipkart’s regular Friday (19 August) townhall grew tense after employees, incensed by hundreds of job cuts, openly accused management of betrayal. Taken aback...Bansal countered that the departures stemmed from poor performance and he lost his job as chief executive for the same reason.”

Over the past few months, Flipkart has seen multiple executive-level exits, including that of its chief people officer and its chief product officer, as well as staff reductions.

The deliver-or-go culture has become common in today’s workplace. “The volatility in the down cycle is a result of hyper funding (raising and burning large amounts of money in quick succession) in the up cycle,” says serial entrepreneur Kashyap Deorah, who has authored The Golden Tap: The Inside Story Of Hyper-Funded Indian Startups.

Through it all, it’s important to keep the communication lines open, and look beyond a single leader.

Be transparent

“Being transparent and open and frank with employees certainly helps build trust and team confidence,” says Mohinish Sinha, senior client partner at executive search company Korn Ferry Hay Group India.

It is, therefore, important for leaders to ensure that employees at all levels are fully aware of the company’s priorities and agenda, believes Deorah.

Delegate

“Most leaders have a hands-on approach of doing things. A CXO should realize that his/her job is to form teams, delegate responsibilities, and work towards what’s next for the company (partnerships, enabling the next team), providing resources (team and managerial leaders) and reviewing and learning from mistakes.

“They need to let go, which can be emotionally difficult, given that founders work 12-14 hours a day for years to build a company,” says Sinha.

The ‘hero’ fixation

A senior executive’s decision to leave an organization can be an effective move for a firm going through tough times if it involves someone who has compromised on ethics. “But if a company performed well for three years and missed the mark for the next two quarters, it doesn’t mean a person has to leave,” says Santhosh Babu, an executive coach and founder of the consulting firm Organization Development Alternatives Consultants Pvt. Ltd.

“We have a hero-worship attitude. When things go wrong, we wait for the hero to come and save us, and we blame the same hero when things go wrong in his/her presence.”

One of the biggest challenges in a start-up, believes Sinha, is to ensure the business keeps evolving.

It’s a team effort

Large organizations should not depend completely on a single leader to execute their agendas. “What we might need is a pool of leaders who collectively have the talent, strength and commitment to meet the demands of a dynamic workplace,” says Babu. “While senior leaders could use all these to drive change, the fact is that no one is in full control,” he adds. “What’s needed is collective-collaborate, organization-wide leadership, where everyone is part of the decision-making process.”

More From Livemint