Lateral Moves

Lateral Moves

Expected Learning Outcomes

• Trend of India Inc.’s seasoned and experienced executives leaving their cushiony jobs and joining risky and uncertain startups
• Advantages and disadvantages for experienced executives joining Indian startups
• Short-term and long-term effects on a startup’s talent pool in the light of droves of India Inc.’s experienced executives joining the rank and file

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I. Experienced Indian Executives Joining Startups: Trend Analysis

1. The base article highlights 11 experienced executives (Exhibit I) joining the startups. Analyze the old profiles and the new profiles of these executives.

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2. Ritu Khanna who joined policybazaar.com, said that, “You have to be flexible to change orientation and be prepared for the unknown. Else you are not startup material.”

a. What does startup material mean? What constitutes startup material?
b. Using a ‘skill-will’ matrix, how do you place the talent required for startups (Exhibit II)?

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II. Experienced Executives Joining Startups: Pros and Cons

1. One of the most-often stated reasons for experienced executives leaving their cushiony jobs to join startups is making quick bucks. The base article states that, “This trickle of lateral hires is turning into a flood with many like Khanna, Chauhan and Patankar leaving their well-paying jobs at global companies like Citibank and Unilever for startups like TinyOwl and UrbanLadder, transported into an uncertain future and stock options worth only on paper as companies are not listed.” Why would experienced executives leave established companies and opt for unchartered waters especially when the ESOPs (Employee Stock Option Plans) are worth only on paper, as the companies are not yet listed?

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III. Experienced Executives Joining Startups: What’s in it for Startups?

1. The base article states that “Startups launch their uncertain journey with just the founders and even friends filling in technology and product development roles. But as the startup grows there is need for an organization structure and people to run the company in all areas – HR, Finance, Marketing Technology, Business Development and so on.” “With no existing pool to tap in the e-commerce space, we have to scan the whole landscape for talent,” says Radhika Aggarwal (Cofounder,
ShopClues.com). Should startups hire people to fit into the organizational structure or should people be hired as per their ability to contribute and reorient the organizational structure accordingly?

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Exhibits

Exhibit I: Profiles of 11 Experienced Executives

Exhibit II: Skill-Will Matrix

Exhibit III: Startup Stages that Require Lateral Hires

Lateral Moves

Synopsis

This Case Flyer enables a discussion on the concept of lateral hiring, a prominent trend among Indian startups. Taking cue from the increasing trend of experienced executives leaving their stable and comfortable jobs with MNCs to join the startups, this Case Flyer debates on the reasons, advantages and disadvantages of this trend for the executives and the startups. It helps analyze two important aspects related to this trend – the qualities required in an individual to join the startup bandwagon as a lateral hire and the stage of the startup at which lateral hires are required.

Prerequisite Conceptual Understanding and Before the Case Flyer Discussion

• • Gary Dessler and Biju Varkkey, “Human Resource Planning and Recruiting”, Human Resource Management, 12^th Edition, Dorling Kindersley (India) Pvt. Ltd., 2011

Suggested Reading

• • Priyanka Pani and Adith Charlie, “B-schools too join the e-commerce bandwagon”, http://www.thehindubusinessline.com/news/education/bschools-too-join-the-ecommercebandwagon/article7109816.ece, April 16^th 2015 (accessed date: October 7th 2015) – To know about the e-commerce specific courses being offered or being planned to be offered by the Indian B-schools

Case Positioning and Setting

This Case Flyer can be used for:

• • MBA Programs in Entrepreneurship and Human Resource Management to explain the concept of lateral hiring

Preamble to this Case Flyer Analysis

This Case Flyer is primarily meant to debate on the efficacy of experienced Indian executives joining Indian startups i.e., who gets benefited out of this trend? How would the executives get benefited? How would the start-ups get benefited? What are the inherent risks for executives as well as for the startups? While startups may offer several benefits, the challenges and risks are equally daunting. What are these benefits and risks? The Case Flyer’s classroom orchestration was conducted accordingly [Exhibit (TN)-I]. The classroom analysis of the Case Flyer was carried out by discussing the questions of the Case Flyer sequentially. In each section, the participants had an elaborate discussion on one of the questions which formed the ‘anchor point of discussion’ for the given section...........

Case Analysis/Case Flyer Discussion

I. Experienced Indian Executives Joining Startups: Trend Analysis

The discussion in this section was focused on analyzing the trend of experienced Indian executives joining startups, as highlighted in the base article1. Accordingly, the discussion was carried out in the classroom using some matrices and examples. Most importantly, the purpose of this section was to let the participants appreciate the reasons and expectations of experienced executives at well-established companies leaving their cushiony jobs and opting to work with startups.

• Comparison of old and new profiles of experienced executives [Exhibit (TN)-II]

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a. Previous Employer – All of these executives worked with very big brands (like Unilever, GSK, Godrej, HCL, Coca-Cola, American Express, Airtel, Nestle, etc.)
b. New Role – Out of the 11 executives listed in the base article, barring 4, all others were brought into the startups as Business Heads. This indicates startups’ expectations from the lateral hires, which also indicates their potential not being fully utilized in their incumbent companies (the base article points out that one of the reasons for leaving is lack of growth opportunities)
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Exhibits

Exhibit (TN)-II: Profiles of 11 Experienced Executives

Exhibit (TN)-III: Startup Material

Exhibit (TN)-IV: The Skill-Will Matrix

Exhibit (TN)-V: Stage of the Start-Up for Hiring Lateral Hires

Exhibit (TN)-VI: Reasons behind Experienced Executives Leaving Established Companies to Join Startups

Exhibit (TN)-VII: Expectations of Experienced Employees

Exhibit (TN)-VIII: Maslow’s Hierarchy of Needs Theory

Exhibit (TN)-IX: Scaling-up of a Startup