Soon, however, Amazon would be forced to reconsider its appraisal. A few weeks after they returned from Bentonville, the Flipkart officials were in for a surprise.
TOWARDS THE END of 2017, Doug McMillon and the other Walmart board members convened for a routine board meeting. The most influential member of the board was Greg Penner. In his late forties, Greg wasn’t just the Walmart chairman, he was one of the heirs to the Walton family fortune. The Waltons are one of the richest families in America who own fifty per cent of Walmart. Greg had met Carrie Walton, granddaughter to Walmart founder Sam Walton, at university in Washington. They married a few years later, after which Greg joined Walmart at the end of the nineties. Greg also started a private equity firm and worked as a venture capitalist. In 2015, he became the chairman of the Walmart board, replacing his father-in-law, Rob Walton. Greg’s parents, Clifford and Joyce Penner, were famous in their own right, having authored many sex-advice books.6
Now, Greg turned out to be a strong advocate for a deal with Flipkart,7 so much so, that he put forth a new proposal: if Flipkart was an innovative, fast-growing retail company with an excellent brand, why not buy it out altogether, or certainly acquire a majority ownership? For years, Greg had been especially keen on expanding in Asia. Even though Walmart had been burnt earlier in India, the environment in the country had become more favourable for a fresh attempt. Now that the Indian market was up for grabs, Greg insisted that Walmart had to seize this chance. Like Greg, even the Walmart CEO Doug McMillon pushed for a majority ownership of Flipkart. This would give Walmart control of Flipkart’s management and enable it to bring about major improvements at the company by introducing its enduring retailing practices. By the end of 2017, a decision had been taken: Walmart would offer to buy more than fifty-one per cent of Flipkart.
The stunned mergers and acquisitions team at Walmart began making preparations for negotiating an entirely new deal. It was certainly an audacious idea. Flipkart had been valued at $10.2 billion in its recent funding round. Any buyout offer would have to be significantly higher. If realized, the deal would be Walmart’s biggest ever, exceeding its $10.8 billion purchase of British retail chain Asda in 1999.8
AT FLIPKART, SACHIN was getting increasingly restless about his proposal to become CEO again. He had been hankering for a return to power for months now. In anticipation of a comeback, Sachin had already increased his involvement at the company. Apart from the Billion brand, he had announced a new project in the area of artificial intelligence called AIforIndia. He had promised to invest hundreds of millions of dollars to apply AI across Flipkart. He had also started work on another initiative: designing a new smartphone. For years he had been inspired by Xiaomi. He now wanted to beat Xiaomi at its own game by creating an even cheaper phone that could compete with the Chinese company’s enduringly popular models. It was a wild idea, and it was right up Sachin’s alley. He hadn’t felt this confident, this alive, in a very long time.
Towards the end of 2017, Sachin pressed the board to act. After lingering over Sachin’s request for months, Lee was obligated to respond definitively. A ‘360-degree feedback’ was commissioned by Flipkart’s board to evaluate Sachin’s candidature. It was to be overseen by Jim Kochalka, the leadership coach who had been working with Sachin, Binny and Kalyan for months now. This process involved soliciting feedback about Sachin from his peers, subordinates, bosses and anyone else who may have worked with him. The objective was to determine his behavioural patterns and gauge his managerial abilities.
As soon as the process started, it became clear that Sachin’s mission was being blocked by two of Flipkart’s seniormost officials: Kalyan Krishnamurthy and Sameer Nigam, the head of PhonePe. They were steadfastly opposed to his return. Kalyan’s antipathy was well-known. He had been fine as long as Sachin was tucked away in the distant position of Executive Chairman. He had even cooperated with the board’s efforts to repair his relationship with Sachin. He had been meeting Sachin regularly, as Kochalka had recommended. But if Sachin became Group CEO, Kalyan would have to answer to him formally. That would be unacceptable.
Kalyan warned the Flipkart board that if Sachin returned, he would move on; he wasn’t going to work for Sachin again. Sameer Nigam’s opposition was more surprising given that he had once been close to Sachin. But in July 2015, he had quit Flipkart on a sour note, furious at the way Sachin had displaced him by hiring managers from Google. When Flipkart bought PhonePe in April 2016, Sameer had secured a guarantee that if the company changed its CEO, the stock payouts due to him would be accelerated. This was now about to come true. Like Kalyan, Sameer also stated that he had no desire to report to Sachin again. It took several weeks for Sachin’s evaluation to be completed.
Apart from Sachin’s colleagues, Kochalka played a decisive role in the evaluation process. Through his sessions, he had formed an opinion about Sachin’s interpersonal skills and managerial abilities, and it wasn’t a favourable one. The verdict was unambiguous: Sachin was found ‘unfit’ to be CEO of Flipkart. It was inevitable, and in the end, it was an easy decision for Lee and the other board members. Having lost confidence in Sachin’s leadership skills long ago, they felt ill-disposed to grant his request. The evaluation conducted by the leadership coach simply supplied the evidence to back up their stance.
Around the end of the year, Sachin was told that his candidature had been rejected. He was crushed. All his energy and enthusiasm of the past several months vanished. He began
