Flipkart IIM Fiasco – What B-Schools & Startups need to learn

All of a sudden flag bearer of Indian ecommerce story, Flipkart is into media limelight, not because of any fresh funding or exclusive launch but due to its decision that restricts its new hires to believe in its vision of  “अब हर विश होगी पूरी” (Ab Har Wish Hogi Poori – Flipkart tagline)

The fresh salvo occurs as a result of ecommerce biggie decision to defer joining of IIM Ahmedabad recruits for six months & the subsequent warning letter by IIM Placement committee to Flipkart HR & its top brass.

The episode is definitely chaotic for students waiting to kick off their corporate careers but the practice is not new. In the past also, recruiter’s majority of which are IT companies, just not have deferred joinings but even have dishonored their own offer letters issued during campus placements. Since, the present crisis is between a billion dollar startup & one of India’s top B-School; hence it is bound to catch the shutterbox. Some industry experts are considering this event as a “Bad PR” for the etailer while many think that this is the indication of the turbulence in the entire startup space. But, if we evaluate the big picture of this fiasco & analyze the outcomes at the B-School & Startup level, we can draw some interesting conclusion, as

At B- School level

1. Many times, placement cells consider all the terms laid down by the recruiters in order to place few students. This encourages exploitation of candidates in terms of salary package, work profile & even deferred joining dates.

2. Once the students are placed, B- Schools restrict them to participate in other company’s selection process, thus forcing students to obey recruiter’s terms.

3. Post placement, B-Schools never ask for student’s feedback for the recruiter like company work culture, learning environment, growth opportunities ; rather it try to rope the same recruiter for the next placement season

At Start-up level

1. Majority of funded startups, hire additional manpower to enter new geographies that causes pressure on revenue. Example – TinyOwl, Zomato, Foodpanda operations shut down in many cities few days after the roll out.

2. Investors force startups for aggressive expansion sometimes even at the beta product level that compel them to hire people without any strategic thought process. Example – Ex. Housing CEO Rahul Yadav alleged allegation on the company’s investor Sequoia Capital to force the startup to roll out multi city operations.

3. When expansion doesn’t work as per revenue targets, investors force startups to restructure company by cutting cost, layoffs and even shutting down the non-core business segments. Example – Jabong’s Founders quitting company after Investor Rocket Internet pressure & subsequently selling its third-party logistics service JaVAS (Jabong Value Added Services).

The above analysis clearly highlights the overhaul required at the B-School & Startups at the policy level. B-Schools should follow the example set up IIM – A placement committee to protect the interest of the students while startups should have a well thought plan before any hiring as any turbulence (in the name of restructure, pressure on revenue etc etc) directly hit careers, lives as well as the startup ecosystem itself.